Life Lessons from a Derbyshire Lass

By a FTSE 100 Group Reward Director

As a small child, my northern grandmother would often tell me that there was “nowt as queer as folk” to explain the seemingly odd behaviour of others.   I suspect now that this was a clever tactic to keep me from probing further, but she does have a point.   The other day, when I read about Centrica’s CEO, Sam Laidlaw, volunteering to hand back whatever bonus he receives for 2013, the curiousness of it all made me pause and think.

Not so long ago, bonuses genuinely earned were accepted without question, but in these times, it’s not so simple.  Hard-working, competent CEOs are now faced with a decision about whether their incentives are truly merited.  Not only must Remuneration Committees subject themselves to painstaking reflection before signing off awards, but the executives themselves are made to feel that there is a moral lens to be looked through before pocketing such payments. 

This corporate self flagellation is bizarre in successful companies where awards are legitimately earned.  By making this public statement, Mr Laidlaw has laid down the moral gauntlet, but to what effect?  Some customers and shareholders will take note…for a few minutes perhaps…but that’s all, while others will cynically say that he’s trying to absolve himself of whatever guilt he has over current and probable energy rate rises.  

Earlier this year, I recall a similar situation at Royal Bank of Scotland, where the Chairman, Sir Philip Hampton went on the front foot to explain how Stephen Hester had earned his bonus award and, no, it wasn’t going to be handed back just to satisfy a few shareholders or provocative journalists. 

I view the Centrica move as really just a PR stunt dressed up as well-intended empathy.   Only it makes it harder for Mr Laidlaw to receive a bonus for 2014’s financial year, assuming of course that one is proposed; plus the other utility company bosses appear rapacious for failing to donate theirs to charity.  Another northern phrase springs to mind at the moment: “where there’s muck, there’s brass”, only in these “mucky” times whatever “brass” there is, might not be so easy to keep.

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  • Anonymous
    Anonymous

    It all comes down to the word "legitimately." We all perceive what is legitimate differently. This is partly due to our positions in society and partly because of our ideologies. To me, it seems a straightforward and sensible move. Centrica is a firm which is in great danger of being viewed negatively. Many people would like the utility companies to be nationalised because of the perceptions they have. People working in care homes or whatever seldom get bonuses, but they need heating. If these times are "mucky" it is because of the legacy of the international financial crisis; individual greed is no longer thought of by many people as being for the good of all.

  • Anonymous
    Anonymous

    Maybe it’s something you have been struggling with for a long time, or maybe it was a piece of advice you learned from a friend or a person or someone else. Whatever the source of our insight, it’s these moments that bring us to a deeper understanding of our world. The better understanding we have of life, the more we live in the truth.


  • I sympathise with the point of view outlined in this blog. For those who follow senior executive remuneration on an international level, recent Belgian news is particularly salutory.

    The CEO of the Belgian postal service has spent the last few years turning round (both in cost and service terms) an organisation that was on its deathbed. His level of remuneration, including variable components, was by no means high and in no way excessive. Notwithstanding the excellent results obtained by Mr Thijs, the Belgian state (majority shareholder) had anounced that in the event of his mandate being renewed this January, the total package must be divided by two.

    As a consequence Johnny Thijs has announced that he will not seek renewal, and furthermore several key headhunt organisations have indicated that it will be more than difficult to find a competent and experienced successor, with remuneration offer which will be close to or lower than key members of the next managerial tier. The share price of the belgian postal service has subsequently entered meltdown since this announcement, and the main shareholder (the Belgian state) has seen the value of one of its key assets plumet.

    Political correctness has its limits!

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