Newspaper article The Evening Standard (London, England)

'Failure Payment' to Marconi Chief Cannot Be Tolerated

Newspaper article The Evening Standard (London, England)

'Failure Payment' to Marconi Chief Cannot Be Tolerated

Article excerpt

Byline: ANTHONY HILTON

LORD Simpson, the now-ousted chief executive of Marconi, is among the more pleasant and amiable of British businessmen, so what follows is in no way meant to be personal. It would, however, be little short of disastrous for the image of British industry and an insult to all those who do a normal day's work for a normal day's pay if he were to receive any payoff at all following his departure from the company this week, let alone the [pound]1 million he would allegedly get if his contract were honoured in full.

Marconi is the biggest corporate disaster to hit this country in years, and it happened on Simpson's watch. It has cost investors tens of billions of pounds. To give the man [pound]1 million after such a spectacular and unmitigated failure would surely be so offensive and indefensible that even the most diehard neofascist apologist for business - like your columnist, perhaps - would find it impossible to argue for it.

Someone who invested [pound]1250 in Marconi at its peak under Simpson's stewardship now, less than two years later, has an investment worth [pound]41, and even that price may not be held, given the grave doubts in some circles about the company's ability to survive at all. A great British business has been all-but destroyed. This was presumably not what Simpson was contracted to achieve. Given that he has not met his half of the contract, why should his shareholder employers honour the other half ?

This is a watershed in the executive pay debate. Throughout the 1990s, British executives have lined their pockets with impressive zeal.

The justification was that executives were expected to perform.

But it has to work both ways. If they fail to perform, they have to suffer.

If the debacle at Marconi does not provide justification for firing someone without compensation, what on earth does? …

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