The Price of Failure
What is the price of failure? For former BP CEO Tony Hayward it’s a one-off payment of over £1million, and £600k a year from the age of 55 for the rest of his life. By the way – that’s not what he has to pay, but what he is being paid by BP following what was obviously a very successful “negotiation” of his contract termination.HAS THE WORLD GONE UTTERLY MENTAL!?This is the man who stood at the head of the company responsible for arguably the biggest man-made environmental disaster in history – and they’re rewarding him for it! No wonder so many CEOs of large companies screw up – it’s easy money for them. I bet they’re sitting in their office one day, thinking, “Hmm, I’m getting tired of all this work stuff; I want to retire and spend more time with my yachts, my three young mistresses and the young lad who handcuffs me to the hotel bed on every first Saturday of the month.But I have a contract – I can’t just walk out on that. So, what’s the best way to get out of it?I know! I’ll activate the moron clause, where I make a huge cock-up and they give me a bonus and a pension for it! Genius!”BP made a loss of $17bllion in the last three months – a record loss for the company, and the highest quarterly loss ever recorded for a British company. There’s also a possibility that they could be found guilty of gross negligence under the US Clean Water Act which, according to BP’s Chairman, Carl-Henric Svanberg, will be covered by selling assets to the total of $30billion. So, worst case scenario, this whole fiasco could cost BP at least $47billion. And Hayward’s going to continue working for them! He’s being nominated as a non-executive director of TNK-BP, a joint venture with Russia. Svanberg actually praised Hayward’s record with BP, but said he wasn’t the right man to rebuild the company. Of course not – that would be like asking Osama bin-Laden to oversee the reconstruction of the World Trade Centre.I don’t understand it. If a bus driver crashes his bus because he’s watching a woman in a mini-skirt walking down the street instead of concentrating on the road, they don’t give him a bonus and a pension, they give him the sack. They might even bring criminal charges of negligence against him. They certainly wouldn’t allow him to negotiate his termination.“Erm…yes,” he would say. “I’m a reasonable man, so I’ll just have a £50k one-off payment and then a £30k a year pension for the rest of my life. I’ll await your acceptance of this offer while sitting on the toilet in the bus garage, reading Nuts magazine.”When his bosses had finally stopped laughing, and picked themselves up from the floor, he’d be off the premises before you could say oil spill. He wouldn’t even get a bag of chips and a can of Tizer as severance.So, why do businesses keep paying executives bonuses for such monumental failures? Why do people like Tony Hayward and Sir Fred Goodwin, former head of RBS, get minted for life for running a company into the ground?How do the people who make the decisions to put such rewards for failure into contracts even get their jobs in the first place? They obviously know nothing about business. If they did, they’d know that I would run their businesses into the ground for them for a fraction of that. In fact, I know someone who’d do it for a couple of cans of Stella and a pork pie.Okay, this is my official job application to all huge conglomerate companies in the world: For the bargain price of a one-off payment of £20k and a pension of just £10k a year, I will personally, and with great vigilance and determination, bring your company to its knees. I feel I am perfectly qualified for this job because there’s so much red on my bank statements that you’d think the paper was bleeding, I can’t even put up a set of shelves without knocking the electricity out, and I’m always so late paying my bills that companies don’t even send me them any more – they save themselves postage by just waiting and then sending me the final reminder.Any response should be sent to my editor at the Seoul Times. He in turn will then forward them to me, and we will then “negotiate” the terms of my termination. But not before I dump a vat of chemicals into a river and tell everyone it was done on behalf of the Seoul Times – I’ll get more money that way.
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Shane Clarke serves as London Correspondent for The Seoul Times. He has been involved in humanitarian work for numerous years. He’s also a freelance management consultant. Having completed an honors degree in Law at Wolverhampton University, he then moved on to an MBA at Warwick Business School. He’s heavily involved in the fight against international parental child abduction to Japan.
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