During a recent visit to the Philippines, I was told a government minister's salary there was set at $700/month.
Current energy secretary Francisco Viray is said to have taken time out from his normal business to help get the country's energy program up and running. But he intends to return next year to making a living.
On my return from the Philippines, the accumulated newspapers on my desk were full of stories of one skyrocketing salary. These made an interesting contrast with the energy minister's position.
British Gas plc Chief Executive Cedric Brown reportedly received a 75% pay rise, taking his salary from 270,000/year ($405,000/year) to 475,000/year ($712,500/year).
The newspapers gleefully asked how a 75% pay rise could be justified, after British Gas had recently announced plans to lay off 25,000 staff and domestic tariffs are to be raised 2.9%.
DEFENSE
Richard Giordano, chairman of British Gas, responded to press criticisms by justifying Brown's pay rise in a letter to the editor of London's Financial Times newspaper.
Published Dec. 1, the letter explained that Brown did not determine his pay package. This was done by the remuneration committee of the board, composed of nonexecutive directors, which increased the pay of other directors as well.
"Cedric Brown's increase was the most dramatic," wrote Giordano. "However, as chief executive he was the most underpaid Brown's current salary still places him well below the cash compensation earned by the executives holding comparable jobs in British industry."
Giordano said Brown's task in leading British Gas was hardly clear sailing, and that it was hard to understand how continuing to pay him badly would benefit anyone.
As newspaper letter columns are a popular way for the British public to put forth their views about perceived injustices, Giordano's letter brought a response on Dec. 2. Letters to the editor seem to inspire writers to high levels of invective, so Giordano's explanation drew heavy flak.
RESPONSE
"Clive of India defended himself from charges of greed by comparing himself with other, greedier nabobs," wrote Derek H. Broome of Northampton. "Giordano mounts the same defense for the directors of British Gas."
"As Mr. Giordano refutes that British Gas is an arrogant, out of touch privatized monopoly with overpaid executives," thundered Lesley Ellis of Alton, "he will no doubt be able to advise me where I can buy my gas elsewhere."
"I thought Mr. Giordano's letter a bit rich," fumed Philip M. Hall of Albury. "After all, what is lie paid as a part time, nonexecutive chairman, and who appoints the nonexecutive directors, anyway?"
Whatever the rights an(f wrongs of the matter, though, I'm sure most people would take Brown's pay rise and face hostile comment, rather than make do with a warm glow and the Philippine energy minister's pay check.
Copyright 1994 Oil & Gas Journal. All Rights Reserved.
Issue date: 12/12/94
