The UK General Election - 4th July 2024


Jessie J was wrong. It is about the money, money, money

How much should senior executives be paid and what constitutes a fair redundancy package? Only a few years ago, many would have baulked at even asking the question, thinking it’s ‘not the done thing’.

The answer from most institutions, public or otherwise, would have been a more or less polite version of ‘that’s none of your business’. Discussing salaries, whether yours, your peers’ or your boss’s, was considered out of bounds, even within the public sector. Now, in a time of austerity and increasing scrutiny of salaries, expenses and pay-offs, the thirst for information is unquenchable. And the opprobrium for those deemed greedy, dodgy or simply overpaid is enormous.

Yesterday afternoon, Mark Thompson, former Director General of the BBC, gave evidence to the Public Accounts Committee (PAC) in the Palace of Westminster. He is one of several former and serving senior executives at the corporation being quizzed about the size of redundancy payments made to outgoing executives in recent years. Sitting beside Thompson was Marcus Agius. No, not the Commander of the Armies of the North and General of the Felix Legions, but a former senior independent director at the Beeb, better known as the man who resigned as Chairman of Barclays after the Libor ‘rate-rigging’ scandal just over a year ago.

The PAC has become a consistently reliable forum for anyone looking to get righteously angry about big business or big businessmen and women. Whether its BBC execs’ pay-offs, or big companies ‘dodging’ their ‘fair share’ of taxes, the PAC regularly delivers the headlines. It’s like a bloodless 21st century version of the bread and circuses that kept the people of Rome entertained in Marcus Agius’s near-namesake’s day. And to be honest, many of the victims, sorry, witnesses who go before the Committee seem remarkably good at contributing to their own downfall.

When PLMR prepares clients for select committee appearances one of the key points we focus on is tailoring the message for the audience – not just the committee members, but the wider audience – the media and the general public. If what you say goes down badly with this second, larger audience, the reputational impact can be enormous.

Yet, this is a trap that so many witnesses fall into. They prepare for the committee itself and of course they ensure they have the correct information to respond to robust questioning. But the language they use in answering questions does not take into account the wider audience, and as such, they risk appearing arrogant, uncaring or simply ‘disconnected’ from the common perception of reality. When Mr Agius said this afternoon that a redundancy payment of nearly £1 million was the “right decision to take on value for money grounds”, I’m sure he had a very clear business case for saying so, but you could hear the headlines writing themselves.

That’s not to say executives should simply cower in fear every time the question of remuneration comes up. When the Chairman of the Charity Commission recently criticised third sector chief executives who earned six figure salaries, many charities responded robustly to defend their position. Oxfam was one of several household names to push back, pointing out that their chief executive may earn £120,000, but is responsible for a £360million organisation with 5,000 staff and tens of thousands of volunteers.

Charities know the public mood appears to be swinging against even them in respect of salaries. A third of respondents to a poll earlier in the year said that charity chief executives should work for free. But most charities rely on public goodwill for their very existence and, as such, are much more finely attuned to getting their messaging right. Given this background one might expect a senior charity representative to perform better than their private sector equivalent in Margaret Hodge’s coliseum. Perhaps charity top executives are worth more than some of their corporate peers?

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