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Friday, September 11, 2009

Snouts In The Trough

It would seem that it is not just bankers and politicians who can't resist putting their snouts into the trough, seemingly the ex directors of MG Rover could not resist taking a dip either.

A report into the collapse of MG Rover, which cost 6,500 people their jobs, stated that the four directors (aka "The Phoenix Four") and CEO (Kevin Howe) awarded themselves "unreasonably large" payouts.

Their self indulgent largess "earned" them pay and pensions worth £42M which, needless to say, was "out of all proportion".

The Phoenix Four and CEO have reacted by calling the report a "witchhunt" and a "whitewash for the government".

Quote:

"Our remuneration was not the reason for the collapse. The real reason is the government bungled the last chance to save MG Rover."

That may well be the case. However, the size of the remuneration (given that the company did collapse, and that it was beyond the norm in the industry and the mens' previous lives) is clearly beyond what was deserved.

Lord Mandelson criticised the men for not showing "an ounce of humility".

The 830-page report took four years to produce and cost about £16M. It does not contain much in the way of criticism directed at the government.

The directors would do well to remember that their excessive rewards may have been justified had the business succeeded, but were most certainly not justified in the face of failure.

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