Leading Article: A bull market for used executives

THAT'S different. The first speculative reports said that John Cahill, 64, the executive chairman of British Aerospace, was resigning after only two years in the job with a pay-off of pounds 10m. There followed Questions in the House and general uproar. Now the company has rushed out an announcement to quell speculation about Mr Cahill's future: he is resigning but with only pounds 3m. That may still seem quite a lot for a failure, but we must be more judicious, less nave. Mr Cahill hasn't failed, we are told, he just hasn't succeeded. When he arrived top management was in disarray. Now he is leaving and it is still in disarray. He also seems, along the way, to have lost Rover, but we know that to lament this is also nave thinking.

In any case, there is the question of the market rate. This newspaper revealed last year that 90 executives sacked from British companies in the previous 18 months had received golden handshakes averaging almost pounds 500,000. Last week the travel company, Owners Abroad, paid pounds 1.5m compensation to three directors who quit after last summer's profit warning slashed its share price. So Mr Cahill has merely been paid six times the going rate.

The Prime Minister was asked in the House how Mr Cahill's pay-off could be justified. Mr Major replied: 'It is not a matter for me.' Of course not. This is just the market at work. Kipling enjoined us to treat those two imposters, triumph and disaster, just the same. We should rejoice that, in Britain today, we can do exactly that. Well, chairmen, chief executives and directors can, anyway. The average redundant worker would be lucky to get a few thousand. After Mr Major made his reply, somebody shouted 'You pillock]', but they were clearly being nave, too.

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