Sacking The CEO

Chief executives in charge of failing and poorly performing businesses are rarely sacked and are treated like a protected species. Over a 10-year period the casualty rate has averaged only 2.1% a year and specifically in 2007, just over 4% of chief executives lost their jobs for poor performance. Only 5.7% faced any chance of redundancy, even those presiding over businesses showing a 25% slump in shareholder returns in absolute terms over a two-year period, and 45% relative to the competition. This is based on findings of a 10-year analysis of the world's 2,500 biggest companies.

The affair of Northern Rock continues well into 2008, yet the Adam Applegarth leaving arrangements were settled in advance of any signs of real closure. Gagging orders are likely to be attached to these deals so the real arrangements will never be known. A very cosy arrangement for Applegarth and government, but very unsatisfactory for everyone else: following the bank's nationalisation, Northern Rock shareholders are still due compensation and have launched a judicial review into the way any compensation must be determined.

The Treasury has instructed that:

"Northern Rock is unable to continue as a

going concern and is in administration" 

A lengthy and complex trial could ensue should the shareholder case ever reach court. Before Northern Rock was nationalised, it was supported by £25bn of taxpayer loans and £35bn of state guarantees.

Rather typical and appalling haste.