The press are enjoying the fallout at United Utilities. ’Fat cat
executive ousted in bedroom coup’ headlines the Daily Telegraph after
United Utilities chief executive Brian Staples was dismissed by chairman
Sir Desmond Pitcher.
And then comes the money. City editors are speculating on the pounds
600,000 departure package for Brian Staples coupled with share options
worth pounds 1 million. United Utilities denies that Staples’ departure
is due to anything except ’boardroom tension’. But whatever the reasons,
this is all looking like fat cat indulgence of the worst kind.
Sir Desmond can expect to face pressure from shareholders as well as the
media for the manner of Staples’ exit. His methods are portrayed as
autocratic and, after all, Staples is the second chief executive to go
within five years.
At the recent AGM in Manchester an irate ’small’ shareholder called for
Sir Desmond to resign. This is unlikely to be the last of such
Sir Desmond has created a major multi-utility group from a
middle-ranking water company. United should be well placed to benefit
from further deregulation in both water and electricity. But instead of
opportunity we see dissent and uncertainty. Sir Desmond risks drawing
public criticism not just of his company’s performance but for ’fat cat’
utility bosses in general.
There is no doubt that Staples’ departure comes at an awkward time for
the company. The Government has announced a windfall tax on the
privatised utilities which will cost United over pounds 400 million. The
water and electricity businesses also face regulatory change and
competition in their domestic markets. Additionally there is the debate
on the company’s involvement in international projects.
There is plenty to do. United Utilities will need to clarify and explain
its position on a range of major issues.So it doesn’t need to give the
headline writers an easy target. This is not the time to return to fat
cattery. This is the time for clear communication on serious core
business matters. United Utilities needs the confidence and support of
key audiences - its millions of customers, a dedicated workforce - and
of course the vital institutional and small shareholders.
United Utilities is a successful company with a track record of
Let’s put the dirty linen away and get back to the real story.