An update from the CEO of UK PLC

Dear Shareholders,

I am writing to explain the remuneration practises of UK PLC towards its Board and senior executives. It has been designed not just to give them incentives to meet our goals of increasing spending and borrowing, but to make a direct contribution to those objectives by increasing the costs of our senior employees. I am quite frankly dismayed that we should now be criticised for undertaking so much investment in public services. I am surprised that shareholders should begrudge people who have successfully led so much investing, their own small share of it. These people have thought out how to increase costs by massive computerisation schemes, how to fill the jobs pages every week with unheard of new roles, have taken on many a consultant to help them spend the money and have set up a large number of new activities in our ever more popular “quango” subsidiary.They have excelled themselves at finding new ways to regulate us, and have been most productive at creating new laws.

I would expect you to thank both me and the Board for how successful this has proved. I am pleased to report that it is not just the senior people we read about that have been able to increase their expenses. They have by their leadership encouraged a spend more claim more culture throughout our organisation. At a time when we are all fighting recession, surely it is good news that there are spenders of last resort throughout the public sector that can provide some purchases to keep the economy going?

I am proud to remind you that never have state employees been as well paid as they are today. Never have they been able to undertake so many foreign trips, or go on so many seminars and courses, never have they been able before to claim so much to help them carry out their jobs. We have encouraged a great culture throughout the senior levels of our local subsidairies and our specialist “quangos” division. It was the leadership of the Board which made this possible. Where would be today if we had not undertaken so much investment in our future? Some of these people are now paid several times what Board members receive, showing how flexible we are in our approach to remuneration.

I did recently suggest a better way of getting the money into the pockets of our Directors and senior staff without the need to fill in so many forms and provide receipts. Unfortunately, and to my amazement, people were not impressed by these proposals. I thought if we gave them an Allowance for just turning up, it would increase the total spend and speed the process up, at a time when we need to spend more. Sometimes you cannot help people to help themselves. I suppose they are now so into the complex systems of form filling and box ticking which have successsfully raised costs throughout the UK that it was asking a lot to get them to exempt themselves from such a system.

We will return to reform of the kind we have pioneered elsewhere in our large organisation. We will have to propose more auditors, more box ticking, more form filling. Rest assured we will come out of this situation with spending higher and borrowing higher, as you would expect. Nothing will deflect us from our long term goal of giving UK PLC the fastest growth rate in both spending and borrowing.

Some have suggested our main competitor company has also been able to increase the expenses paid to its employees. I can assure you we are better at it than they are. Their CEO made a big mistake when he sacked his most talented expense claimer for what he did. That is no way to behave if you wish to be the best at this.

I am sure you will be delighted to learn that two bank subsidiaries expect further losses this year.I do think RBS has done us proud, being able to lose more in the first quarter of 2009, after such great figures in 2008 when they lost £24 billion. Their CEO’s salary of £1.2 million is rightly well above mine. We are working on getting the rest of our trading subsidiaries into such fine form.

Yours exhausted

Chief Executive

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16 Comments

  1. Posted May 10, 2009 at 6:47 am | Permalink

    Priceless.

  2. Kevin Lohse
    Posted May 10, 2009 at 7:04 am | Permalink

    Very good draft, John. May I suggest that you substitute, “spend”, with ,”invest”? So much more in keeping with company policy.

    As I have followed the Great Expenses Row, I have been forcibly struck by the overwhelming sense of entitlement displayed by those fingered in the expose. The arguments they use, and the expressions of outraged dignity, are very similar to those of the dockers’ unions when they were striking over the introduction of containerisation into the transport system.

  3. Ian Jones
    Posted May 10, 2009 at 7:12 am | Permalink

    John,

    When you do this type of blog it fills me with dread that the system is now beyond saving. How does one cut when so many people are so reliant on the state? They all seem to be waiting for the “recovery” so life goes on as before! It cannot, but how do you change it without being thrown out after 5 years!?

    Just removing the pension rights from the public sector is likely to lead to endless strikes, how will you add on job cuts to the useless jobs as well as the pay cuts and thats before you get to the welfare state!!!

    Its going to be tougher than Thatcher’s time simply because people have had it so good they are not ready to take the medicine required.

  4. alan jutson
    Posted May 10, 2009 at 7:26 am | Permalink

    Just a thought:
    But if we also took control of:
    Some of the Car Companies
    Steel producers.
    Air Transport Businesses
    Train Services
    And Communication Companies.

    We would then be able to control and invest even larger sums of money.

    In fact if we took control of all of the Banks with even more regulation, we could advise them on where to invest.

    Roll on the AGM, the shareholders would vote for this I am sure.

  5. Jim Pearson
    Posted May 10, 2009 at 7:32 am | Permalink

    John, sorry to read that James Gray MP has been caught out claiming for a rememberance wreath, it tars you all. I sure he isn’t the only Tory MP to drag politics down. Nice blog today though, loved the last line.

  6. David H
    Posted May 10, 2009 at 7:42 am | Permalink

    Dear C.E. You are, as ever, a true guide and inspiration to your humble staff.

    I wish to plead guilty to some recent failings in my duty to the company and beg your indulgence for time off (on full pay, please), to attend a course of social reprogramming. Can you advise as to the most suitable quango or other dept. to maximise the benefit from this event, please.

    In the meantime, and as a token of my sincerity, I have written to my accountants; requesting them to submit a Capital Gains Tax refund demand, together with a retrospective nomination of main residence to the property sold and, upon which I foolishly (and I now recognise, selfishly) paid tax.

  7. Stuart Fairney
    Posted May 10, 2009 at 8:12 am | Permalink

    I suspect you may modestly delope at this suggestion, but if Mr Cameron doesn’t give you a Cabinet job in a years time, then he may not be making best use of his bountiful resources.

    • Posted May 10, 2009 at 5:31 pm | Permalink

      Did anyone else read Janet Daley’s suggested Cabinet in this morning’s Telegraph?

  8. Posted May 10, 2009 at 9:37 am | Permalink

    From the evidence of the “Oberver” today, our government is much too busy with more pressing matters. In the case of the Minister for Europe it is which red frock to wear, whether her constituents will like her pink high heels, and will this get the votes of the young first time electors. All this economic stuff is no go and confuses people.

  9. StevenL
    Posted May 10, 2009 at 2:23 pm | Permalink

    A cynic would say they wanted to reform the allowances to cover investments other than property, which let’s face it, has been having a bit of a bad time recently.

    I think you should all keep the second homes allowance personally, though luck if they market is stagnated.

  10. Posted May 10, 2009 at 5:32 pm | Permalink

    I love thee CEO thinggies.
    The only trouble is that I do not think that most of the Labour front bench even knows what a CEO actually does.

  11. Posted May 10, 2009 at 6:16 pm | Permalink

    What’s missing is the bit about the share price standing at half that of their main competitor as reported in today’s Mail on Sunday.

  12. Brian Tomkinson
    Posted May 10, 2009 at 7:24 pm | Permalink

    Dear CEO,

    I refer to your correspondence dated 10 May.

    It is clear from this that your remuneration committee has been derelict in their fiduciary duties and must be replaced without delay. There has evidently been a total lack of monitoring and control of directors and staff expenses and allowances, including your own.
    This action alone, however, will not be adequate. It is equally clear that there is an urgent requirement to replace the whole Board and senior executives. In particular, your own performance as CEO of UK PLC can only be described as deplorable.
    This decision has been reached after several years of poor performance which has culminated in the organisation being driven to the verge of bankruptcy whilst you and your colleagues have happily taken advantage of long-suffering shareholders’ funds.

    Consequently, you are on notice to convene an emergency general meeting at which I confidently expect that you and your colleagues will be dismissed and replaced.

    You will not receive any severance payment, nor any pension enhancement. In fact advice will be taken to see if your existing over-generous pension arrangements can be reduced to reflect your abysmal performance. I would expect you to concur with this approach as you have repeatedly stated that there should be no reward for failure.

    Yours disgustedly,

    An exasperated shareholder

  13. A. Sedgwick
    Posted May 10, 2009 at 7:27 pm | Permalink

    I think the vast majority of the nation is exhausted with New Labour in particular and politics in general and we deserve to be put out of our misery with a general election. This is unlikely to happen before 2010. The Conservatives under Cameron have to be more up front and dynamic and seen to be for democracy rather than party. One of the numerous changes that is needed is four year fixed terms to prevent this disaster that is Gordon Brown repeating itself. I very much doubt if this will be a manifesto commitment.

  14. Colin Sigley
    Posted May 10, 2009 at 9:29 pm | Permalink

    Is it too much to ask that those who govern us:

    a. Keep their hands out of our pockets.

    b. Keep their nose out of our business.

    c. Keep their snouts out of the trough.

  15. TomTom
    Posted May 11, 2009 at 4:59 am | Permalink

    Looking at a list it would appear British MPs are remunerated more in line with Italians than Germans or Swedes. Might that explain their attitudes to the public and accountability for public funds ?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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