They deserve every penny they receive: the case of Glencore and Tony Hayward

Spare a thought for that poor fellow, Tony Hayward.

I use the word “poor” in the moral sense, of course, rather than the financial. He’s reported to have made about £2.3 million in 2013, and rather more last year, so I don’t think he’s likely to fall victim any time soon to, say, any cuts in benefits support the UK government will be pushing through in the next few months.

However, £2.3 million is terrible cut from his maximum remuneration, o £3.2 million back in 2009, his last full year as Chief Executive of BP.

Ah, yes, it’s all falling into place now, isn’t it? You remember. Hayward was the man who revealed his diplomatic skills when, a few weeks after the Deepwater Horizon oil spill in the Gulf of Mexico, he announced to the press that “I would like my life back.” Since he was at the head of the company ultimately responsible for the drilling rig which caused the disaster, that was a sentiment that was received with less enthusiasm than he might have been hoping for.

It was like the acclaim that greeted Jeb Bush recently when he commented on the latest school shooting in the US, that left nine dead, that “stuff happens.”

The awkwardness at Deepwater Horizon
It caused some discomfort to that unfortunate Mr Hayward

Hayward quite soon got his life back, when BP decided that it might be better all round, taking everything into account and weighing one thing against another, if their ways parted.

He then faced all the problems that those of us who lose our jobs know and dread. He was forced eventually to settle for a much less well-paid job. You can no doubt imagine the feeling of despair: going from £3.2 million to £2.3 million represents a drastic pay cut, not far off 30%. It must have felt like virtual pauperisation.

In fact, things were so bad that poor Mr Hayward, like so many inhabitants of US trailer parks, say, was forced to take not just one job, but two. As well as the interim chairmanship of Glencore, he also took charge of energy company Genel. He had a number of other charitable appointments around the City of London to make sure he could keep the wolf from the door, but you can no doubt picture the stress he had to undergo, with all those jobs.

Fortunately, Genel was able to increase its remuneration package to him last year, by 41.5%, taking him to £2.5 million. And since he’s moved from interim chair of Glencore to take the post definitively, his salary went up to £685,000. With other payments – bonuses, etc. – there’s every chance that he’ll have moved beyond where he was with BP.

All this goes to prove that you can’t keep a good man down. You deliver the goods, and you’ll be paid a reasonable, proportionate return.

For instance, the generous increase in Hayward’s salary from Genel came in a year in which he presided over the company making a loss of £213 million.

Meanwhile, and this is why I’m talking about this at all, Glencore is back in the news these days. It’s the world’s tenth largest company, but what’s most important about it is that it’s massively dependent on the trade in metals – it controls 60% of the world's trade in zinc, apparently, and 50% of the world’s trade in copper. So it’s a barometer of the problems building up for the world right now. The economies, notably China’s, on which we’ve all been relying on for growth in recent years, are slowing; they want less metal; the prices fall; Glencore’s taking a hit. 

On a single day at the end of September, Glencore shares collapsed so badly that Chief Executive Ivan Glasenberg lost $500 million of his personal fortune. That left him in relative penury, with just $1.4 billion, down from $7.3 billion in July 2014. It seems Glencore has recovered most of its most recent share price fall, but taking a longer view, shares that were trading at £5 in 2011 are now down to £1.

At least Hayward managed a small increase in salary last year despite these problems.

Aditya Chakrabortty has given us a fine piece in The Guardian, predicting the difficulties George Osborne will face in 2017, as UK Chancellor of the Exchequer, in accounting for the economic crash that’s coming. Where copper goes, he points out, the world follows, and copper’s on the way down. So Glencore’s troubles are a warning of global troubles to come.

Isn’t it sad that Mr Hayward seems again to have got himself involved in a company that’s facing a degree of unpleasantness? Why, he may be called on to dazzle us once more with his fabled communication skills, perhaps a little honed since Deepwater Horizon. This time, the disaster he fails to avert will be far more far-reaching, affecting the globe and not just the Gulf of Mexico.

In any case, we must surely be left with a sense of the general rightness of things, in a world where top executives of the companies that determine our destinies, deserve and receive the remuneration their skills command.

Strange how the fascination with dynasties continues...

It’s amazing how difficult it is for us to rid ourselves of belief in the power of “blood” as the main determinant of anyone’s qualities. We all know it isn’t true, but we still somehow believe that mere birth will make someone better qualified than anyone else to lead, or to rule, or just to lord if over everyone around.

I mean, look at Prince Charles. You want proof that high birth doesn’t guarantee high qualities? Look no further.

The prejudice clings on even in a country where deliberate steps were taken to put an end to this preposterous notion. “No Title of Nobility shall be granted by the United States” claims the Constitution of that fine nation. And yet the sixth president, John Quincy Adams, was the son of the second, John Adams. Just as Benjamin Harrison, the 23rd, was the grandson of William Henry Harrison, the ninth. Even the two Roosevelts, though not closely related, were distant cousins.

The dynasty that never fulfilled its promise was the Kennedys. Bobby and Ted both held high office, under or in the wake of their brother JFK, but both were cheated of going further by death: in Bobby’s case his own, in Ted’s that of Mary Jo Kopechne, drowned when he drove off a bridge at Chappaquiddick.

These instances of keeping things in the family weren’t always bad. John Quincy Adams, for instance, strikes me as rather a fine fellow. He was defeated at the end of his second term by a cruel, bigoted and authoritarian successor, Andrew Jackson, the man who drove the Cherokees and other native Americans away down the “trail of tears” and had far less than enlightened views of the role of African Americans (he felt slavery was right for them). 

Undeterred, Adams got himself elected to Congress where he served 17 years, up to his death. And he appeared as a lawyer for the (successful) defence of the rebel slaves of the Spanish ship Amistad when their case went to the Supreme Court.

William Henry Harrison.
Distinguished only by the shortest presidency
And having a grandson who also achieved the office

Many of these blood relatives, however, were a pretty sorry bunch. William Henry Harrison’s presidency was distinguished only by being the shortest ever (32 days until his death from pneumonia); his grandson Benjamin’s presidency is undistinguished by anything at all.

But when it comes to sorry dynasties, we have to come forward to the present day for the sorriest. With Jeb Bush declaring his interest in the presidency, we have in prospect for the first time ever a candidate who is not merely the son of a President but the brother of another. And yet the father was unprepossessing in office, the brother lamentable.

Now this kind of thing can happen in a monarchy, as in Britain. George III lost his mind by the end of his reign; he was succeeded by his vainglorious, self-indulgent son George IV; and then by a younger son, William IV, who though slightly brighter, was never going to set the Thames alight.

Surprisingly like the Bush bunch.

Now, that this can happen in a monarchy is sad but understandable. But in a strongly established republic? With two or three hundred million people to choose from? It seems amazing.

What’s particularly striking is that every presidential election between 1980 and 2004 – seven of them – had at least one Bush or Clinton on one of the tickets, running either for President or for Vice President. And 1992 pitted one of each against each other: Bush the father against Clinton the (erring) husband.

Well, if Jeb Bush gets his way, and Hillary Clinton gets hers, 2016 could see a re-run of that battle of the dynasties. Proof if any were needed that, whatever the Constitution says about actual titles, notions of aristocracy run as deep in the US as they do anywhere else.

Hillary Clinton: a more inspiring representative of dynastic politics
Besides, she's not really a member of the dynasty

To be fair, one of the possible outcomes would again prove that this kind of dynastic politics doesn’t always have to be bad news. A Hlllary presidency could be a great result, and not just because she would be first woman president, after the first African American, but because Hillary is even brighter than the other half of the Clinton duo – and in any case, she wasn’t a Clinton by birth, only by marriage.

Which naturally brings to mind the old story about the couple. Skip it if you know it, but in case you don’t, it bears repeating here.

The Clintons were filling up with petrol – gas, I should say – at some miserable filling station in the wilds of Arkansas. Bill was struck by the strange looks passing between his wife and the station attendant.

Once they were back on the road, he asks what that was all about.

“Oh, we dated for a while back then when we were in High School,” she explains.

Bill laughs.

“Well, just think what a different life you’d have had if you’d married him! You wouldn’t have got to the White House.”

“Oh,” replies Hillary, “if I’d married him, he’d have been its occupant.”