Outlook: Nicoli/EMI

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Outlook: Nicoli/EMI

ERIC NICOLI has been given an extraordinarily rude welcome by the City for his new job as executive chairman of EMI. The share price of his present employer, United Biscuits, rose on the news, while that of EMI fell. Analysts were virtually queuing up to say what an unexciting appointment it was, and there was a general booing and hissing in the aisles.

In the circumstances, it is just as well that Mr Nicoli is a thick skinned bruiser with resilience to criticism honed over many years of public censure. His reign as chief executive of United Biscuits has been marked by repeated calls for his head as the shares first fell out of the FTSE 100 and then continued their downward slide relative to the index. He survived them all.

And to be fair on Mr Nicoli, the persistent underperformance of the share price under his watch cannot really be described as entirely his fault. He inherited some big problems from his predecessor, Sir Hector Laing, and he's been up against some of the fiercest competition in the world. Even so, Mr Nicoli's experience as a biscuit seller doesn't obviously best suit him to the hard living, social whirl of the music industry.

Which is, EMI claims, precisely why he was selected. Does the City really want a big noise from the entertainment industry, EMI asks. If so it could certainly have had one, but he would have come at a big price. Take what Mike O'Neill demanded for quitting the US for Barclays Bank, quadruple it, add in an American style package of executive perks, and you might be talking about the right ballpark.

Furthermore, any such big hitter would have come with his own mergers and acquisitions agenda. EMI would rapidly have been led into other areas of the international entertainments industry, which may or may not be the thing to do. Nor, EMI insists, does it need another music industry expert for big signings, new acts and everything else that comes with the business.

To have appointed such a person would merely have been to have put noses out of joint with the existing couple of head ponchos, Ken Berry and Martin Bandier. They would have marched out in a big huff, and with an ever bigger payoff.

All this seems reasonable enough, as does the contention that the music industry, notorious for late nights, late starts, lax cost control and poor management, needs a healthy injection of professionalism at the top. Less clear is whether Mr Nicoli is really that person. There is a smell of compromise and second best about this appointment. Mr Nicoli could prove the sceptics wrong, but he's also there because he's there - because he's a non executive director of EMI and for whatever reasons, he wants a break from biscuits.