GEC has alienated both the general public and the City by giving its
managing director a potential pounds 10 million wage packet, says Fiona
Driscoll, chief executive of Ogilvy Adams and Rinehart
I don’t envy GEC’s PR team, having to make the best of last week’s
announcement that GEC’s new managing director, George Simpson of Lucas,
has been given a remuneration package potentially worth pounds 10
million over the next five years.
Not surprisingly, the headlines screamed about ‘the fattest cat of all’.
The PR team did manage to get critical key messages including one about
Simpson being the right man for the job and how dependent his package
will be on performance. But overall the impression is not of a PR
So, has this done real harm to GEC’s reputation and could it have been
handled better? What, if anything, could PR have done to mitigate the
It appears that GEC have learnt little from the row sparked by the
salary award to Cedric Brown of British Gas - the ‘original’ fat cat.
GEC has damaged its corporate reputation not only by making a salary
award that is open to criticism as socially unacceptable, but also by
appearing to flout corporate governance principles and Greenbury rules.
In the case of British Gas, the circle of critics focused on small
shareholders, unions and employees, the general public and the Labour
Party. This time, the City institutions are weighing in - the ABI,
institutional investors and analysts and even the Financial Times. This
is perhaps less emotive, but potentially more powerful group. Now that
the announcement is over, GEC has to be prepared to continue to defend
its position. It may have lost the first battle, but the real fight will
come if it continues to be pressured to further justify or change its
Companies should not be dissuaded from doing what they believe to be
right out of fear of media reaction. GEC was no doubt made fully aware
of the likely fallout from its actions, but itsstrategy seems to be to
ride it out and ignore criticism.
It is not the role of our industry to make company policy for our
clients, but it is our responsibility to advise them of the likely
effect of their actions on their corporate reputation. And then it is
our job, to the best of our ability, to communicate facts and
explanations - not obfuscation and puffery - to the media. But
sometimes, even we can’t fix it.
Personally, I doubt that the PR result for GEC could have been any
better under the circumstances. One of the best things about our
business is the opportunity to be involved in the hot issues of the day.
But we all have to be realistic about what we can achieve for our
clients and to manage their expectations carefully. Otherwise reality
has a nasty habit of biting back.