Sue Morphet, Australian businesswoman of the year
IT was stirring stuff from ACTU president Sharan Burrow this week: ``How can the CEO of Pacific Brands take home her salary while she sends 1850 workers and their families to the poverty of unemployment? Shame.’‘
You’d need a heart of stone not to feel something for the hundreds of workers likely to lose their jobs. And you wouldn’t be alone if you reserved a special kind of anger for the actions of Pacific Brands.
But, really, does Sue Morphet, the reviled chief executive of the company behind Bonds and Berlei, deserve all the blame?
For years to come, when scholars rake over the global financial crisis, the name Morphet will appear as a symbol of the greed that will leave a generation or more paying off government debt. And that’s not entirely fair.
I’m not necessarily suggesting Morphet be crowned 2009 Businesswoman of the Year. (Professional director Elizabeth Nosworthy, who was on board for the sinking of three corporate ships, Babcock & Brown, Ventracor and Commander Communications, has probably got that stitched up.) But a highly commended - or perhaps a special jury prize - wouldn’t be out of the question.
Firstly, Morphet has endured the most personal, vicious media campaign against a company leader in recent memory - at least since Christopher Skase, and he skipped town rather than face the lynch mob. Even Rodney Adler and Ray Williams, who helped cause significantly more pain for ordinary Australians, probably got off lighter.
Perhaps this is because Morphet is a woman. It’s not that the media is more likely to target women; it’s just that they’re more memorable because there are simply fewer of them in business.
Fifty-year-old men with names like Robert, Michael and Andrew are dime a dozen in corporate Australia.
But ask somebody to name the head of one of the Big Four banks and, if they know anyone, I bet they’ll come up with Gail Kelly.
In any event, Morphet hasn’t run from the fight.
She has even gone on the front foot with a couple of ill-advised, woe-is-me media appearances (the 60 Minutes interview was particularly unhelpful).
Still, she was blindingly - if foolishly - honest on February 25 when she announced the 1850 job cuts as part of plans to close most Australian manufacturing and offload half of its 350-odd labels.
Can you imagine any other company running a slide headlined, ``1200 Australian manufacturing redundancies’‘?
No talk of ``downshifting’’ or ``rightsizing’’ there.
Sure, there were missteps that will be studied in PR school for decades to come.
Did Pacific Brands need to make such a headline-grabbing announcement? Perhaps it did to appease its nervy bankers and shareholders looking for a ``big bang’’ response to its troubles.
Certainly, too little was made of the 7000 jobs the drastic measures announced by Pacific Brands in February were designed to save. And at times, in the days that followed, Pacific Brands appeared flat-footed, almost surprised, by the venom of the media campaign against the job cuts and, particularly, Morphet’s pay.
For a company with some of the most recognisable and loved brands in Australia, what were they expecting?
Secondly, despite the screaming headlines, Morphet is not massively over-paid.
Her package did famously rise from $685,000 to $1.8 million last year but, critically, that was after a promotion from middle management - group general manager underwear and hosiery - to chief executive.
That promotion, and her new package, was set long before she made any decisions - decisions by the full board, not a lone CEO - on redundancies.
At first blush, it still looks like a lot.
And, compared to the workers on her factory floor, it is. But, rightly or wrongly (a debate for another day), it’s not out of whack for companies with 9000 staff and $2 billion in revenue. Brian McCarthy at Fairfax Media (9800 employees, $2.9 billion in revenue) took home $2.15 million last year before becoming CEO.
Lehman Brothers’ Richard Fuld _ somebody we really should blame for helping cause the financial crisis _ made nearly half a billion dollars in the past 15 years.
A good chunk of Morphet’s pay is also what the corporate governance sticklers like to call ``at risk’‘. That is, she must hit certain targets to get the full amount. This, appropriately, ties her pay to the company’s long-term performance.
Morphet also takes home about half of her predecessor, Paul Moore.
And that brings us to the final point: this isn’t her mess she’s cleaning up.
The bitter medicine of February 25 is designed to save a company labouring under too much debt _ about $740 million at the time _ operating in a highly competitive, global market. Without a significant makeover, Pacific Brands’ banks were expected to sweep it into receivership, threatening all 9000 jobs.
Morphet didn’t make the decision to list the debt-heavy company on the stock market in 2004. That was made by private equity investors CVC, which made a bundle buying, fixing and refloating parts of the old Pacific Dunlop business as Pacific Brands.
And she certainly isn’t responsible for the drift of manufacturing jobs to China and other countries where workers come considerably cheaper than Cessnock, Wentworthville, Nunawading and other Pacific Brands sites for the chop.
It’s not her fault the vast majority Australians don’t care where their clothes are made and certainly won’t pay more to support the national cause. ``We have persevered where others have long ceased manufacturing before us, but it is no longer competitive for us to manufacture clothing,’’ Morphet said in February.
``If people wanted to pay $200 for a pair of underpants it would be a vastly different story.’‘
It’s probably too late for 1850 Pacific Brands workers but if you really want to save Australian manufacturing jobs, don’t gripe about Sue Morphet’s pay, look for ``made in Australia’’ on clothing labels.
Keep buying Bonds singlets, Berlei bras, King Gee work pants and Dunlop Volleys _ even if they’re made offshore _ and you might just save thousands of other Pacific Brands jobs.
Was there ever a more short-sighted campaign than the call for a boycott of Bonds and other Pacific Brands labels? The loss of 1850 jobs not enough for you? Why not take down the whole company?
Okay, so maybe Morphet doesn’t deserve a gong. But at the very least, she should get a guernsey to the awards night.
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