May 04, 2003
By Raffique Shah
I WONDER what people who appear to be outraged over Malcolm Jones's compensation package as executive chairman of Petrotrin would say if I told them that most senior executives in the banking and finance sectors receive compensations of $500,000 a month or more? Or that CEOs at some of the relatively smaller energy sector plants are paid higher salaries than Jones's?
In fact, in most conglomerates outside of the banking sector, CEOs and senior management personnel are paid upwards of $100,000 a month. In the private sector there are additional incentives like bonuses, retirement funds and stock options that make Jones's package look like the proverbial "peanuts".
So why is there a big fuss over Jones's salary and perks? No one knows or cares about the calibre of the man whose private business is now in the public domain, not even those who are complaining about such exposures making the victims targets for that new breed of criminals, kidnappers.
All that matters to them is that Jones is an Afro-Trini, that maybe he supports the PNM, and that he happens to be a close friend of Prime Minister Patrick Manning. In other words, like most other matters in which taxpayers' money is involved, the quarrel is about race and politics and discrimination.
The issue of compensation packages for senior executives, especially those in the public sector, has been contentious for many years. We must face the reality that Trinidad and Tobago is an oil-rich nation and while it is true that successive governments not risen to the challenge of closing the rich-poor gap, the upper echelon of the society has made big strides in terms of their remuneration. So from the first oil boom in the mid-1970s we found executive packages rising to levels that seemed to be inordinately high when compared with the average worker.
In fact, it was oil that fuelled the economy from that period as agriculture and manufacturing lagged way behind. So George Weekes, as leader of the powerful OWTU, saw it fit to seek a 100 per cent increase for oil workers in 1975. I don't recall exactly what he got for them, but I know Basdeo Panday, too, sought a similar increase for sugar workers. They were both justified in their demands, given the disparity between the top and bottom of the earnings ladder, and the fact that the revenue from oil could and should have been used to lift the standard of living of the ordinary worker. Bear in mind that I have not even mentioned the unemployed and the under-employed.
Over the years executive compensation packages rose. In particular, expatriates who worked mainly in the energy sector, and who had similar or less qualifications than our locals, were paid much higher salaries than locals. As time went on and the ‘expats' were phased out, the locals took their places, but at much lower levels of compensation than the foreigners. But as the locals moved up the ladder in skills, experience and qualifications, and opportunities arose abroad for them to earn much more, local companies had to make them generous offers to retain them.
If one were to measure levels of compensation based on qualifications, experience, track record and commitment to country, Malcolm Jones would be one of the highest paid executives in the country. He was among a group of young engineers who oversaw the expansion of the energy sector at a time when it was felt that crude oil was our best source of revenue. He oversaw the construction in the early 1970s of Tringen I, the second downstream energy plant in the country. The first was W.R. Grace's ammonia plant in Savonetta.
Later, Jones would work with other pioneers like Kerston Coombs to oversee the expansion of the Point Lisas Estate, and in particular to establish the country's first methanol plant.
He stayed with the State sector to steer the industrialisation process and became head of the NGC, the co-ordinating-giant that effectively prepared the country for the massive growth that bore bountiful fruit from the 1990s. He could have gone across to the private sector where the grass was much greener, but he didn't. It was only after the Panday government abruptly fired him from the NGC in 1996 that he was forced to turn to the private sector.
Within weeks of that firing, the US company that had planned to establish Titan, the biggest methanol company when it came on stream, snapped up Jones. And there he was, being paid much more handsomely than his current $70,000 a month salary, overseeing its expansion with the construction of the Atlas plant, when Manning plucked him and persuaded him to take over chairmanship of Petrotrin.
He was subsequently made executive chairman, which meant he had to resign from Titan. Bearing in mind Petrotrin had lost its status as a prime contributor to the State coffers, it was clear what Jones's mandate was. It's a tall order-to restore the State-owned oil company to a level of profitability commensurate with its size.
One does not pay such an executive "peanuts". I dare say that none of those who preceded him as head of that company had either the qualifications or experience close to Malcolm's. In the national scheme of things, with some 70 per cent of the work force earning less than $4,000 a month, paying someone a $100,000-a-month package might appear to be criminal.
But bear in mind it's the oil and gas sectors that are driving this economy, and should he succeed in turning around the fortunes of Petrotrin, the country would benefit to the tune of billions of dollars in additional revenue.
I need note, too, that under the UNC government, several executives who were said to be close with Panday were rewarded with very handsome packages. I do not know they are more highly qualified than Jones is. Moreover, it's a fact that Panday's closest allies benefited to the tune of hundreds of millions of dollars from the State coffers. So those who lived in gilded-glass-houses under the UNC ought not to throw stones at patriots like Jones. They know he is one of this country's most valuable human assets.
It is imperative that the Government moves to ensure that the wealth of the nation is distributed as equitably as is possible. I add to that that Government also has a responsibility to eradicate poverty and unemployment. But in pursuing that goal, one does not kill the Jones goose that could lay a golden egg that will benefit us all for many years to come.
