The danger of leaving Bill to drive the car solo

Price to pay; Nothing ventured; Ineos question
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Any chief executive you want as long as his surname is Ford and any colour you like as long as it is green. The new head of the world's second biggest car maker spent most of yesterday trying to live down his illustrious ancestry and his equally famous passion for the environment. Which, if you are called Bill Ford, is probably a smart move.

Having a last name like that in the automotive industry can just as easily prove a burden as an opportunity. As for Mr Ford's well-known green credentials, there are those who think the more pressing task is to return the blue oval to profitability before worrying about how to drive the production lines in Detroit using wind power.

The Ford dynasty still owns 40 per cent of the voting shares and it has a history of dealing ruthlessly with hired hands who are deemed to have passed their sell-by date. Lee Iacocca was despatched by another of Bill's forebears although Ford's loss turned out to be Chrysler's salvation.

Jac "The Knife" Nasser, the latest manager to fall foul of the family, took his removal with dignity and professionalism, by all accounts. To make sure that he does not turn around and stab his successor in the back, Ford is still working on his stock option entitlements.

At 54, Mr Nasser is still young and talented enough for one more big corporate job in America. But for the last nine months, it was apparent that the one in Dearborn was not going to last. The Firestone tyre fiasco was painful enough for shareholders but that was followed by a halving of the dividend, which is never a wise move when it costs the family who employ you $40m.

In an attempt to rein in its chief executive and get him to concentrate on the basics of producing and selling cars and trucks, Ford opted for a power-sharing arrangement between Jac and Bill. But far from resulting in clarity it induced paralysis and Ford's stonking third quarter losses were the final nail.

Now that he is alone in the driving seat, Mr Ford promises that his environmental ethnic will be channelled into promoting the company's core strategy and not used as an excuse to send Ford off on tangents. But a chairman and chief executive who thinks that the biggest single challenge facing his company is "sustainable mobility" cries out for a safe pair of hands alongside. In time it will make sense to split the roles and give the chief executive's job to Sir Nick Scheele. Like Ford's last but one boss, Alex Trotman, he is a Brit and a very good one at that.

Price to pay

Well, here's a thing. Boardroom pay has risen by four times the rate of average earnings in the past year. That puts the chief executive of your averager FTSE100 company on a package of £962,145, which is not a bad screw considering the state of the economy and the way the stock market has tanked. Of course these new figures, complied by Income Data Services, are for the financial year to 30 June so do not reflect the deteriorating economic prospects since the terrorist attacks on the twin towers. Pay rises in the current year will hopefully be more restrained.

In recent weeks companies like BA and yesterday Baltimore Technologies have cut executive pay. Others are freezing it until prospects look brighter. In Baltimore Technologies's case the cuts, are permanent and show a business facing up to the harsh truth that it is now considerably smaller than its halcyon days during the boom. We ought to see more examples like this.

Inevitably business leaders and their remuneration consultants will mouth the usual mantras about needing to pay the market rate for top talent and competing in an increasingly global market. But the winds of change are blowing. The Government has already announced plans to give shareholders to vote on boardroom pay. And institutional investors are becoming increasingly active on pay as companies like Vodafone and Marconi can testify.

It would also be heartening, particularly for staff on the shopfloor, to see more executives sharing the pain in the hard times or when their companies are shrinking. Step forward Sir Geoff Mulcahy chief executive of the diminishing Kingfisher retail group. He earned £1m last year but now finds himself running a much smaller business following the demerger of Woolworths and the sale of Superdrug. But will he take a pay cut? Does Comet open on a Sunday?

Nothing ventured

Over the last 56 years, 3i has become the acceptable face of venture capital, a household name associated with nurturing young companies, while offering an altogether safer investment itself. The company is now making its first cutbacks since the last recession, shutting seven offices in a move that starts to undo five years of aggressive global expansion.

Venture capitalists need nothing if not optimism, but 3i appears to have been especially slow to accept the reality of the technology market downturn. A matter of months ago, it brimmed with confidence about its ability to ride out the market slump, so the City was quick to mark down its shares yesterday amid shock at 3i's more downbeat tone and the sharp slide in its net asset value.

The company's results are usually among the most boring in the calendar, but not so the latest interim numbers, which disclosed hefty provisioning against duff deals struck in the heady days of the boom, and write-downs in the value of its quote and unquoted stocks. The bind is made worse by the severe difficulty of exiting start-ups through the traditional flotation route.

Having got its fingers so badly burned, the worry is that 3i goes to the other extreme. Many of its babies are still gobbling cash and the temptation will be to pull the plug on firms that have the potential to help it out of this mess. Unlike investment trusts, 3i shares trade at a premium to net asset value to reflect the expertise of its management. The premium remains – but only just.

Ineos question

A mysterious silence has descended on Jim Ratliffe, the man from Runcorn who is demanding £300m in state aid to keep his chlorine plant open. Having negotiated in public through the Sunday papers, his privately owned company Ineos Chlor hurried away from talks with Patricia Hewitt yesterday, mumbling only that discussions were still ongoing.

In the course of those discussions, her officials at the Department of Trade and Industry might like to dig a little deeper into the precise terms of Ineos Chlor's original deal with ICI, which sold it the Runcorn plant. For the suggestion now is that Ineos picked up two other chemicals businesses at the same time from ICI at a knock-down price as compensation for taking on the chlorine plant, which was valued at just £25m. Ordinarily, this would be a commercial matter between two private companies. But not when one of them is asking for £300m of taxpayer's money.