C&W plans to pay off senior staff
Tuesday 14 January 1997
Executives are believed to have been promised compensation amounting to up to 60 per cent of salary, on top of any contractual severance payments. The unusual catch is that the bonuses are at the personal discretion of Dick Brown, C&W's American chief executive who joined the group last summer with a mandate to shake up the bureaucratic internal management culture.
Mr Brown is thought to have outlined his scheme to executives who were called together for a "morale-boosting" meeting before Christmas. As he detailed the plan, it became clear that only staff who left C&W would be eligible. He also said the final say on who received the cash would be up to him.
Thousands of job cuts are likely in the merger between Mercury, C&W's UK phone subsidiary and three cable companies: Nynex CableComms, Bell Cablemedia, and the UK operations of Videotron. Many senior management jobs could go as the four organisations involved merge executive posts. Mr Brown is known to be keen to bring in talent from outside, including senior figures from the US telecommunications sector.
Last night a C&W spokesman declined to confirm the existence of the bonus scheme. "Everything we do with our employees is confidential," he said.
Details of the arrangement come as the original April deadline for the merger looks increasingly optimistic. "There's just no way they can put this together by April and get the company quoted on the stock market," said a source yesterday.
Concern over the merger timetable knocked 4p off Cable & Wireless shares, which closed at 465.5p
The announcement of who will run the new business is not thought likely to happen this week. The C&W spokesman yesterday disputed that the announcement had been originally planned for a week ago. He commented: "We are not far off but as usual you have to get it absolutely right. It isn't a hold up in the sense that things are moving along very satisfactorily."
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