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  • Writer's picturePeter Smith

MONDAY 6th MARCH 2000 (part 1); Ron's Rewards

I open my Times on the 6.54 am train from Sunningdale as usual to see the headline in the Business section, "Sandler's £700,000 payout for five months".

A not very flattering picture of Ron, not looking nearly as ecstatic as I would be in his situation, accompanies this. This is not pleasant reading first thing on a Monday morning. The amount includes his salary and pay-off, which The Times in a stroke of journalistic free-thinking, says is equivalent to over £40,000 a week- "Well above the £25,000 a week paid to David Beckham, the high-profile Manchester United footballer." Isn't it interesting that they feel they have to tell their business readership who Beckham is?

Of course, this is not a very sensible comparison to make. I mean, Ron is much sexier than Beckham for a start. But on a more serious note, unlike Beckham and his footballing peers, it is unlikely that Ron will receive millions of pounds worth of sponsorship from Reebok, Rayban or Rolex, or be asked to appear in adverts plugging L'Oreal, Nike or Walkers Crisps.

Although when you come to think about it, why not? With the revolution, business is the new show-business....there's the germ of an idea in here. This could be my new career! I can just see it -

"Sir Brian Bloggs, Chairman of The Bloggs Corporation, wears Armani," across a double page spread in the Sunday magazines, with a picture of Sir Brian (with a carefully chosen toupee) looking cool and commanding in a Board meeting, surrounded by cowed-looking men (not wearing Armani of course) and pouting female directors who appear to be on the verge of launching themselves physically at his sleek form....

Sir Brian would contract to wear Armani for all public engagements, and would have a small and very discreet logo tattooed across the back of his hand for maximum visibility in hand-shaking scenarios. His company limousine would be available to sponsors in 28 separate 1000 square centimetre blocks, similar to Formula One cars, but restricted to tasteful products and services which Sir Brian would be prepared to personally endorse; a decent port, fine cigars, airlines, Pfizer pharmaceuticals...

I don’t think Ron will go for this somehow. But anyway, forgetting the strange logic of this Sandler/Beckham comparison, I find that the last few months have brought me close to changing some fundamental political views. You have to question capitalism at least a little when you look at some of these numbers - and of course The Times article concludes with the fact that 15,000 jobs are expected to go.

I don’t know how you can justify some of these pay-offs, or indeed the salaries themselves, or the discrepancy between the treatment of the basic employee and the top guys at times likethese. And actually, to be fair to our directors, NatWest top salaries were lower than the "average" for very large companies. Our top handful were earning around £400 - £500K, which is an awful lot of money, but a lot less than many directors in much smaller and less profitable companies; or, for example, the new MD of Barclays. Unfortunately, I don’t have any suggestions for "curing" these problems. I suspect naked capitalism does actually work better for the vast majority of people than any of the alternatives.

Most of us are also hypocrites in that we all define a ridiculously high salary as one that is about twice what we personally earn. I don't think I'm overpaid, and what I see in the jobs market confirms that, but I suspect at least half the population would disagree strongly and feel I was paid far too much.

It would also be wrong to blame Ron (or anyone else) personally for accepting these packages. In his case, everyone knew he was taking on a risky assignment, and that to some extent his reputation was on the line. Many would not have accepted the role or wouldn't have had a clue how to approach it. He has worked very hard in pretty stressful situations, being shot at by staff, press and analysts, and did his very best to increase shareholder value and keep us independent. I don't suppose he would have joined for £30,000 a year and a company Mondeo.

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