Tuesday, November 20, 2007
The bountiful rewards of destructive capitalism:Adam Applegarth,a modern executive's hero
Adam Applegarth:Who's the fool?
I'm bored of the whole Northern Saga.Why shouldn't the tax payers pick up the bill.Apparently it's costing each tax payer in the UK £900 per head.
The public should regard this cost as a kind of idiot tax for employing morons in high public office,for example Darling.Public sector posts,including regulators and the Bank of England will normally attract the poorest quality job applicants.It's just a given.All things being equal,why would you become a civil servant and not a hedge fund manager? These left over no-hopers man the regulators and other 'supervisory' bodies.If you spend long enough in 'public service' you can get knighted and a nice pension.It's actually not a bad life at the top of these organisations.No accountability and endless financing underwritten by the populous.
I saw Adam Applegarth being quizzed by the treasury select committee.He's got a lovely soft voice, and a ye olde bank manager's manner.In another life he would have made a nice vicar or provincial GP.Trust me l'm a Doctor.Dr Strangelove.
Here's why the man is a genius.He worked out long before everyone else that globalisation meant that when he was 21 and looking for a job,he could make his fortune by staying in a nice backward part of the country.Namely Northumberland.A strange hybrid county,neither England nor Scotland,but generally encompassing the worst aspects of both.In this eternally drab landscape,he takes a provincial building society,floats it,re-engineers the business model.
He effectively ran an intermediary operation for packaged mortgage debt remotely from Newcastle for some of the more aggressive US investment banks,including Lehman.Unlike his counterparts running trading desks in the London based investment banks,Mr Applegarth ran one product,mortgages.Nothing fancy,exotic or complex.He got to come into work about 9ish,leave by 5.He is by his own admission a sports fanatic,so he followed his favourite football team.He was also captain of Sunderland cricket club.All in all he has and had a very good quality of life and held down nice undemanding day job.
He became CEO of the Rock in 2001,aged 39.His base compensation in 2007 was 760K.Lets add pension rights,bonus,and equity etc.Make the assumption that he made approximately 1.5 million per year since 2001.Lets do some rough and ready calculations then,ignore time value of money etc:
2001-2007 = 1.5 x 6= 9 million total comp
1983- 2001 =assume 8 million total comp
By my very rough numbers,I think he has taken about about 17 million pounds over his 24 years at Northern Rock.He wasn't particularly well paid as a FTSE 100 CEO,still he wasn't starving either.He has had an excellent quality of life up north.I'm told a million half a year is a lot of money in Gosforth.Now at 45 can now retire very happily.
He has therefore been quietly collecting little and often over 24 years,and now the game's up.I doubt if he's particularly bothered.It was just a job.
If you're middle aged investment banker in London reading this at 2 am at your desk.Rubbing your eyes,wondering whether your total comp might even reach half a million pounds.Think about the genius of Applegarth's approach.He's collected 17 million pounds , been and gone.He didn't have to compete in the urban rat race,work late,have to engage in bitchy office politics or learn about anything more complex than a mortgage.Who's the fool ?
RB
I'm bored of the whole Northern Saga.Why shouldn't the tax payers pick up the bill.Apparently it's costing each tax payer in the UK £900 per head.
The public should regard this cost as a kind of idiot tax for employing morons in high public office,for example Darling.Public sector posts,including regulators and the Bank of England will normally attract the poorest quality job applicants.It's just a given.All things being equal,why would you become a civil servant and not a hedge fund manager? These left over no-hopers man the regulators and other 'supervisory' bodies.If you spend long enough in 'public service' you can get knighted and a nice pension.It's actually not a bad life at the top of these organisations.No accountability and endless financing underwritten by the populous.
I saw Adam Applegarth being quizzed by the treasury select committee.He's got a lovely soft voice, and a ye olde bank manager's manner.In another life he would have made a nice vicar or provincial GP.Trust me l'm a Doctor.Dr Strangelove.
Here's why the man is a genius.He worked out long before everyone else that globalisation meant that when he was 21 and looking for a job,he could make his fortune by staying in a nice backward part of the country.Namely Northumberland.A strange hybrid county,neither England nor Scotland,but generally encompassing the worst aspects of both.In this eternally drab landscape,he takes a provincial building society,floats it,re-engineers the business model.
He effectively ran an intermediary operation for packaged mortgage debt remotely from Newcastle for some of the more aggressive US investment banks,including Lehman.Unlike his counterparts running trading desks in the London based investment banks,Mr Applegarth ran one product,mortgages.Nothing fancy,exotic or complex.He got to come into work about 9ish,leave by 5.He is by his own admission a sports fanatic,so he followed his favourite football team.He was also captain of Sunderland cricket club.All in all he has and had a very good quality of life and held down nice undemanding day job.
He became CEO of the Rock in 2001,aged 39.His base compensation in 2007 was 760K.Lets add pension rights,bonus,and equity etc.Make the assumption that he made approximately 1.5 million per year since 2001.Lets do some rough and ready calculations then,ignore time value of money etc:
2001-2007 = 1.5 x 6= 9 million total comp
1983- 2001 =assume 8 million total comp
By my very rough numbers,I think he has taken about about 17 million pounds over his 24 years at Northern Rock.He wasn't particularly well paid as a FTSE 100 CEO,still he wasn't starving either.He has had an excellent quality of life up north.I'm told a million half a year is a lot of money in Gosforth.Now at 45 can now retire very happily.
He has therefore been quietly collecting little and often over 24 years,and now the game's up.I doubt if he's particularly bothered.It was just a job.
If you're middle aged investment banker in London reading this at 2 am at your desk.Rubbing your eyes,wondering whether your total comp might even reach half a million pounds.Think about the genius of Applegarth's approach.He's collected 17 million pounds , been and gone.He didn't have to compete in the urban rat race,work late,have to engage in bitchy office politics or learn about anything more complex than a mortgage.Who's the fool ?
RB
