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Truly the corporate world is different… June 24, 2013

Posted by WorldbyStorm in Culture, Economy, Excess.
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…from an illuminating profile of Charles Saatchi in the Sunday Business Post this weekend…

In the true spirit of the 1980s, Saatchi & Saatchi grew at a rapid rate with a voracious appetite for takeovers. By 1986, it was the biggest agency in the world, having taken over 80 other agencies, among them firms based on Madison Avenue in New York.

Tales of excess were legendary. The company was earning so much money that they paid themselves and staff 13 months’ salary.

When one employee announced that she was leaving, she was asked what it would take to make her stay. “A Ferrari,” she said. And she got one.

In one party in London’s Docklands, a full-sized model of Charlotte Street, where the firm was based, was built, and restaurants from the real street were paid to open for one night only.

WTF?

It reminds me of the stories a friend of mine formerly in an Irish company in another ‘creative’ field told me. At the height of the ‘boom’ the entire staff, running into the hundreds would be taken on office ‘parties’ to say – some European city, or such like, top of the range hotels, all expenses paid for a couple of days and nights.

Sadly all this – ahem – activity came to nothing and by the time the recession hit the company went through three or so drastic downsizes ultimately reducing to the partners and an administrator.

There’s no pleasure in retelling that anecdote. Whatever about the excesses of owners those were workers who lost their jobs and one has the feeling that it didn’t have to be that way, that a fair bit more foresight, a lot less extravagance, and something more might have been salvaged from the wreckage.

Ironically, or not, the Saatchi story is not entirely dissimilar…

However, by the mid-1990s reality hit, and the company was saddled with debt. Some of the companies which had been bought were worth a fraction of what they had been paid for.

What’s most striking is how corporate interests (and of course Thatcher and the Tories were famously clients of Saatchi) are not behind the door in preaching austerity for others while…

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Comments»

1. Phil - June 24, 2013

The company was earning so much money that they paid themselves and staff 13 months’ salary.

That’s standard practice in Italy – everyone gets the tredicesima, a thirteenth month’s pay, as a Christmas bonus. This was instituted under Fascism, extended to all employees in 1960 and as far as I know is still in place – not so much because Italy’s swimming in money, more because the unions are that much stronger than the Atlantic-seaboard norm.

It’s an old story & a sad one – perhaps it’s as true of money as of power, that the people who want it badly enough to get it are just the people who can’t be trusted with it. I once had a boss who specialised in descending on trade shows & taking the entire team to West End shows and exclusive restaurants. I remembered that front-row seat at Starlight Express when the firm went bust.

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Michael Carley - June 24, 2013

The tredicesima is not a thirteen months pay for twelve months work system, but a method of saving for Christmas. You get a thirteenth of your annualized salary per month, and double in December. There is also a quatordicesima which pays out in August as well as in December.

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ejh - June 24, 2013

A similar system operates in Spain, and also in Portugal. It is easily mischaracterised as money for nothing, but it isn’t: it’s just, as Michael says, a different way of organising salary payments.

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Phil - June 24, 2013

I stand corrected (and slightly disappointed!). I think I was misled by attacks from the Right which presented it as a perk.

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Dr. X - June 24, 2013

A good rule in life: until and unless credible evidence to the contrary emerges, asssume that when the Right (spit) are attacking something, they are talking out of their collective (ha) backside, and that this latest attack on this or that thing is merely the latest episode in their Career of Crime.

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