Tuesday, 23 June 2009

Et tu Tom ?

Tom Peters is a legend in the business world. He's such a legend that this doesn't even have to be said.

But that doesn’t make him always right. Occasionally, he can be wrong, for he is after all, human. In this instance, I think he is dead wrong.

I refer to his blog post – “I do not wish you harm”. He rails and rants against Robert Diamond, the President of Barclays plc for his “earning” $36.5m consequent to the purchase of Barclays money management business by Blackrock. He objects to the grin on Diamond’s face calling it “appalling – insensitive – stupefying – outrageous – disgusting - sickening in June 2009”. He seems to be objecting to the public spectacle when “thousands are in the process of receiving pink slips”. Read the comments on this post which are even more vitriolic.

Blackrock , a US based money management firm is buying the fund management division (Barclays Global Investors) of Barclays for $ 13.5 bn. Barclays, an UK based bank has been badly hit by the financial crisis like every other bank. So far, it has shunned government help and this sale is a means of raising cash. Barclays staff who own shares in BGI will get a windfall. Diamond himself will get $ 36.5 m. This is what has got Tom’s goat.

Sorry Tom. I don’t grudge Diamond’s payday one bit. This transaction is completely legal and above board. Barclays stands to make a profit of $ 8.8 bn from this deal. Read that again - $ 8.8 bn. I don’t see why a CEO who realized a profit of $ 8.8 bn for his company, should not make $ 36.5 m as a consequence. And do it publicly , with a grin. Why should he be apologetic about it and do so under the table ??

Just like we don’t grudge you your speaking fees which reportedly go upto $ 100,000 per engagement. You are a guru. You have much wisdom. People are ready to pay that amount to listen to you speak. It may sound incredibly excessive for a Somali farmer on the brink of starvation. But that is absolutely irrelevant. I do not grudge your wealth one bit. For you have more than earned it.

The clamour over compensation for business people has gone completely uncontrolled. Where it is “unearned” or gotten by thievery, pelt stones for sure. But where it is earned, applaud it. The world won’t become a better place by pulling down the wealthy. It will become a better place by pulling up the poor. Deng Xiaoping, a great man, said “to be rich is glorious”. That’s what made China, what it is today.

Robert Diamond – I wish you well.


thethoughtfultrain said...

I am surprised to hear Tom Peters advocating to be double faced - you are really happy but for appearances sake, keep a sober face. Though everyone feels sorry for those who got laid off, that is no reason to feel apologetic about one's wealth. Good post Ramesh. :-)

thethoughtfultrain said...

"I would not spit on them—but I would be tempted. Sorely tempted." - this was very unbecoming of him.

A journey called Life said...

read the entire article that Tom Peters wrote... read it in isolation without having ur post as the background and felt myself leaning towards what he has to say (i was alarmed though at some of the harsh words he uses for Rob Diamond and Fink).. it was sort of like feeling the same way u felt about the morality of the stock market..(again i maintain they are not in the exact same vein)..
my take on this is that both the coverage the deal got and the reaction of Peters are extreme, may be both of it should have been done in moderation, the former for respecting today's difficult times and the latter for respecting an awesome deal..

Ramesh said...

@thoughtful train - Hadn't thought of it that way, but now that you say it, I do think its a bit double faced.

@AJCL - My argument is , there will always be misery in the world, but that shouldn't be a justification for preventing somebody earning something or enjoying something. In this case, these guys built a valuable business. They did not opt for a bailout - they have stood on their own two feet. So why begrudge them a bonanza ?

But understand your sentiments too. As always in life, there is no one right answer. Thanks for your thoughtful comments.

A journey called Life said...

absolutely.. go ahead earn in the right way, and flaunt it to but not in such a loud manner that it becomes eye sore.. its just not the flavor of the season

Ajay said...

Totally agree with Ajcl on this. I would have thought Diamond and Fink brought it upon themselves when they posed like that for the photograph - pompousness is not the mood of the day. Right or wrong, justified or not - a backlash should have been expected. Then again, they would have had no control over which photos the editors chose to publish. I agree with you Ramesh, that they need not feel apologetic. And Tom Peters, of all, over-reacted.
Ajcl also brought up the topic of the morality of the stock markets. And I see this argument of yours here being in support of the stock markets too :)

Ramesh said...

Well said AJCL. Its a mark of greatness to play success , or fortune, low key.

@ Ajay - Respect your view. This one's slightly different from the stock market case. In my warped sense of morality, these guys "earned" the money - its not easy to build a business that has such value. In the stock market case, the passive investor, in my book, didn't "earn" it. But that's old fashioned morality for you !!

rads said...

Hmm if not for your blog I wud never hv come across this info...a great post..thanks for sharing

Ramesh said...

@Rads - Hey thanks.

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