Friday, June 25, 2010

El Presidente of CIPD replies with absurd fat cat defence

Well, my last blog post on the CIPD fat cat salary scandal caused quite a stir, with the CIPD quickly deleting the erroneous claim that their CEO was a Director of Shelter from their website. Garry Platt then kicked off a good debate on TrainingZone and a blistering thread opened up on the CIPD members group on LinkedIn. It was clear that the vast majority of commentators think her salary is obscene and that the CIPD has lost touch with its membership and the real world. I’ve even had several promises of resignations. Then something odd happened; the current President of the CIPD, Vicky Wright, weighed in with a defence of her salary that was weak as a kitten.

‘Two wrongs make a right’ argument

Anna is mistaken in saying that Jackie has earned significantly more than Geoff in total remuneration. Jackie's base salary is lower than Geoff's final salary and her pension is significantly lower than Geoff's (which included 'above the cap' pension contributions which were agreed some time before I came on the scene).”

Just to be clear, Jackie Orme earned £405,000 in 2009, the year before Geoff Armstrong earned £428,000 in 2008. There is a small difference in the basis salary (10k), but Geoff received nearly £100,000 in pension contributions that year (presumably a sort of pay-off). What is morally reprehensible is the President, Vicky Wright (who chairs the Remuneration committee) using one fat cat salary as a major defence for another. Let’s be clear about the Geoff Armstrong/Jackie Orme comparison. I blogged about this over two years ago, in March 2008, pointing out the obscene salary paid to Geoff Armstrong. In 2006 he was taking out a cool £500,000, a truly astronomical and ill-deserved sum. The fact that he was more rapacious doesn’t make her obscene remuneration any better.

‘She’s a big shot’ argument

El Presidente's second defence is that, “Jackie has a larger variable pay opportunity than Geoff, which is still some way behind the remuneration opportunity of HR Directors in large private sector organisations, where Jackie and Geoff both came from.

This defence claims that you would expect to pay a large salary for the HR Director of a large multinational company, but Jackie Orme was never anywhere near this level. In any case, since when were Charity CEO salaries and bonuses benchmarked against HR Directors in huge private sector organisations? In fact, Jackie Orme has never been the HR Director of a large international private sector organisation. She was NOT the HR Director for Pepsico, merely a national HR Director and I’d bet a lot of money on her salary having been a good deal lower than 405k. If it was at this level, let her reveal it. Remember that she was described by a real Head of HR as “an unknown player…’ve got to questions her credentials”.

Deafening silence

No mention from El Presidente on the drop in revenues, rise in costs, redundancies and bonus freeze for others in the organisation. And no mention of the fact that she lied about being a Director of Shelter for over a year on the CIPD website (it was removed only after I pointed it out on my blog post). She hasn’t written, hasn’t phoned….(I still have the screen shot, as I suspected they’d pull it quickly).

New El Presedente

I believe that Gill Rider is to be the next El Presidente. Interesting choice as she is the Head of HR across Whitehall. To put it another way, Head of Civil Service Capability Group (widely seen as inefficient and incapable) and Head of Profession for Civil Service HR, widely criticised as being responsible for the excessive salaries and bonuses for top Civil Servants.

You may not know much about Gill Rider, but she was subject to a severe mauling from the press after the government awarded a £400 million contract to De La Rue Printers for passports. Turns out she’s a Director of de La Rue,and although resigned briefly, returned as a Director the very day the contract was awarded. She was also accused of nepotism by appointing colleagues of hers to top Government posts. The whole murky story is here. The CIPD is turning into a second-rate dictatorship lurching from one incompetent leader to another.

Out of touch

The refusal of the current President to address the real issues and concerns of the members in the debate is symptomatic of the problem. The self-serving leadership of the organisations is way out of touch with its membership and clearly out of touch with the current political and economic context. People are right to protest at this egomaniac behaviour, where people get rewarded for failure. The CIPD should be taking a leadership role here, not being seen as greedy and out of touch. They have lost all right to moral authority on the issues of pay and rewards.

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Blogger Martin M-B said...

A whole week and no comments - a record for a Donald Clark blog? Especially one as iconoclastic as this! What can this mean?

12:15 PM  
Blogger Donald Clark said...

Even iconoclasts need to rest! Actually had nothing to say - sun is out, life is good - out on my bike, playing tennis and reading.

9:24 PM  

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