Hungry dog brushes off fat cat treatment

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The Independent Online
PETER RODGERS

Business Editor

It must be an uncomfortable experience to be torn apart by the tabloids as a fat cat. The pounds 460,000 salary and pounds 1.2m profit on options made by Ed Wallis, chief executive of PowerGen, brought him the full media treatment, with reporters camped outside his home and a public grilling from MPs.

It was a tough time for his family, but inside the company he appeared to have been thick-skinned enough to have shrug-ged off the publicity, unlike his opposite numbers at some other privatised companies who went into near-shock.

A colleague said: "Anyone who knew him inside PowerGen felt he didn't have a case to answer. He certainly hasn't lost confidence." In public, Mr Wallis has said bluntly he thinks he is paid the rate for the job.

Mr Wallis is pithy and ebullient, and while not a charismatic leader, still stands out from the crowd of other former Central Electricity Generating Board executives who now run the power generation companies and the national grid.

"One of the dogs has fallen over so you rush in there and grab his bone", was the way he described snatching a piece of business from a competitor earlier this year. Now he plans to chew on a much bigger bone - Midlands Electricity.

Detractors say Mr Wallis finds it hard to delegate and hangs on to power, but defenders say that has not stopped his team being highly motivated and energetic.

An admirer in another industrial company claims it is quite untrue that he is running a monopolistic utility, because it faces competition across the board, unlike the electricity distributors. "Look at some of the softer measures of performance, for example the safety and pollution record, and you will find the company has improved immeasurably," says the admirer. PowerGen is rated more highly by the City than its closest rival, National Power.

Mr Wallis joined the CEGB as an apprentice in 1955, won a scholarship to Aston University and ran coal and nuclear power stations before moving to the CEGB, where he helped to plan the strategy to keep the lights burning in the 1984-85 miners' strike.

After impressing the former energy secretary, Cecil Parkinson, he was appointed chief executive of PowerGen ahead of privatisation, but nearly lost his prize in July 1990, when Lord Hanson stepped in with an offer to buy the company.

Mr Wallis heard of the proposal through a midnight phone call while on holiday in Provence, and returned to London the next morning to start a campaign by PowerGen management to beat off Hanson. The company was floated on the stock market instead.

Although privatised company chiefs have tended to be on the defensive on pay over the past year, Mr Wallis and his co-directors fought back against allegations by the Observer over the timing of the exercise of share options. They are funding a legal action against the newspaper out of their own pockets.

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