If I were a shareholder in BT, I would be stocking up on rotten eggs ready for the annual meeting on 15 July. The first dozen would be to throw at Ian Livingston, the chief executive, who is to be given a £343,000 bonus for last year even though BT lost £1.3bn in the final quarter, cut the dividend, chopped 15,000 jobs and will cut another 15,000 this year.
The rest of the eggs would be for the chairman, Sir Michael Rake, and the eight non-executive directors on the board – including Eric Daniels, Lloyds' chief executive, and MP Patricia Hewitt – who sanctioned his bonus.
BT is defending Mr Livingston's payment with the argument that it's a reward for meeting certain non-financial targets such as "social, governance and environmental measures" rather than financial targets – those were missed. This is possibly one of the most disingenuous statements I've heard for a long time. I've asked BT to explain how it defines those measures but, so far, it has been unable to come up with any detail other than that customer services improved over the year – that is, according to their own internal surveys.
Forgive me, but isn't that what Mr Livingston and the executives are meant to do? Isn't that why he is paid a salary of £850,000? Or is improving the service an extra? I can't think of any other job where getting it right is seen to be worth a bonus. BT's other defence, that he is being paid in shares rather than cash, is equally flimsy.
The second travesty which the board has permitted is the £2.85m "pay-off" package to François Barrault, the head of the troubled global services division which lost so much money. This is a much trickier issue since the pay-out to Barrault is a contractual one. His £2.85m golden goodbye consists of £1.25m in last year's pay and a £1.6m so-called termination agreement, the calculation of which has not been explained. This is an issue which boards, and the institutions, need to look at more carefully since it is obviously wrong that executives who have not performed should be rewarded by being given so much money they need never work again.
What is so striking about many of these pay issues in corporate Britain is how they mirror the MPs' expenses scandal. Just like the MPs in Parliament with their allowances, so the executives at BT have designed a system for themselves which permits them to take bonuses despite missing financial targets. Ipso facto, they all seem to be saying, it's there so I can take it. I would argue that it's neither the political institution nor the companies which are bankrupt, but the people involved who have shown themselves incapable of either common sense or morality. Hiding behind the rules is spineless.
Just as it was wrong for MPs to take their full entitlements, so it is wrong for Mr Livingston to be rewarded when his company is losing money, people are being sacked and shareholders are losing money.
If he wants to avoid the rotten eggs in July and to stop shareholders voting against his pay package, he, and his other executives, should waive their bonuses. Anything other than that would be as good as celebrating the fact that workers are losing their jobs.
Vauxhall crisis shows how we should kickstart the UK's auto revolution
Lord Mandelson, the Business Secretary, is right to bust a gut in his efforts to help save Vauxhall, the UK arm of the troubled General Motors which files for bankruptcy in the US tomorrow. Although the situation is changing by the hour, Mandelson clearly believes that a deal can be reached with Magna International, the Canadian car parts company, to rescue GM's European operations. Magna has said it will protect as many of the 50,000 GM jobs in Europe, half of which are in Germany, as it can. However, there are fears that up to 10,000 jobs will have to go.
It's not just these jobs which would be lost if there's no deal. The motor industry in the UK is no longer about making cars – a far bigger industry is the auto components sector and distribution service around it. Vauxhall may employ 5,500 people making Astras in Ellesmere Port and vans in Luton but it is the 7,000 jobs at supplier companies and the 23,000 people who work in the service industry which the politicians are so worried about.
At the last count, the UK's auto sector employs 800,000 people but only 180,000 in manufacturing, with another 106,000 making components – 19 of the world's top 20 parts suppliers have UK factories. Another half a million people work in showrooms, service bays and elsewhere. The UK is building a reputation for a sophisticated advanced technology auto sector, one reason why the former Ford vice-president, Richard Parry-Jones, has called for a new industry-cum-government Auto Council. As he says, the UK's edge in engineering puts it in a great position to lead the world in auto technology.
Cars and lorries still account for half the country's manufacturing exports. This crisis has shown again how vulnerable we are when our companies are foreign-owned. After Vauxhall is resolved Mandelson should make it a top priority to support Parry-Jones in his efforts.
Fantasy model Christian Lacroix files for bankruptcy
Are we watching the beginning of the end of the high-end luxury brands? The news that the French haute couture house Christian Lacroix filed for bankruptcy in Paris last week will bring tears to the eyes of those who have followed him since he was spotted by Bernard Arnault of LVMH more than 20 years ago. Lacroix, who has the most exquisite eye for colour, was always one who designed more for fantasy than for the street. Clearly the mega-rich are now beginning to feel the bite in this recession. I doubt that even our national heroine, Joanna Lumley, who as Patsy in 'Absolutely Fabulous' adored his clothes, can save him.
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