DO NOT MAKE MANAGEMENT THE SCAPEGOATS

Dec 15, 2009 Features / Columnists, Peeping Tom

Just after President Barack Obama was shown into office in January of this year, it was revealed that some executives of the banks which were in problems had paid themselves huge bonuses. This revelation triggered outrage and forced the government of the United States to insist that the bailout funds that it would provide to the bankrupt financial institutions would not be used to fund perks for the top executives of the banks.
It was an important lesson. First, it signaled the concern that if an institution was in problems, then the top executives cannot expect to be untouched by the crisis and in fact had a moral obligation to take a cut in their salaries and benefits.
Secondly, there was the recognition that government funds should not be used to fund these super benefits which were enjoyed by the top executives.
Guyana ought to learn from this experience. When Booker Tate ran the local sugar industry, one of the criticisms was the extremely generous management fees that were paid to that entity for a handful of executives. Hundreds of millions of dollars were said to be involved.
With the departure of Booker Tate, it was expected that significant savings would have accrued by the retention of the high management fees that would have prior gone to the foreign managers. Thus, while the corporation did lose significant sums last year, it was felt that the corporation could reduce these losses through savings in management costs as a result of the termination of the long- standing contract with Booker Tate.
The Kaieteur News has however reported that one top official of the local sugar company enjoys a monthly salary of $2.5M in addition to housing, travel and other benefits. It is quite a package and not one that one would expect to the paid in a corporation that is in deep crisis.
However, if the corporation hopes to attract the sort of skills necessary to turn around the industry, it needs to be able to pay wages that are competitive but affordable. The payment of US$12, 500 a month to a top executive would seem to be high for a country like Guyana, but a better gauge of whether the corporation is over- extending itself would be to look at similar salaries that are paid in other parts of the region, as well as to look at the overall management costs of the corporation as compared with what prevailed during the governance of Booker Tate.
It would be unfortunate if it discovered that the new managers of the corporation are simply enjoying the same level of benefits paid to Booker Tate. This would be terribly unfortunate because if this is the case then all would have happened was that we would have replaced high paying foreign management with high-paying local management.
The media needs therefore to do a comparative assessment between the individual wages paid to Booker Tate managers and those paid to the locals who replaced them. I urge Kaieteur News to explore these aspects of GUYSUCO’s total wage bill.
While there are legitimate concerns about the benefits paid to top officials, one of the things to be avoided is to blame these super salaries for the state of the sugar corporation. There are persons who no doubt have an interest in deflecting blame for the state of the industry to the management. This was done last year when the corporation lost money and Booker Tate was sent packing.
The question needs to be asked as to what is responsible for the likely production of only 235,000 tons of sugar this year? The weather cannot be blamed for the corporation had good weather this year? So where exactly does the problem lie?
The union, no doubt, has its views on the decline in production and the management.
What is necessary is for a comprehensive review of the corporation to be undertaken to identify not only what were the causes of the decline but also whether the much- touted turnaround plan is a viable option. It also needs to be asked about the failure of the private farms which were expected to come on stream as well as the total sugar cane lost as a result of the initial problems experienced by the Skeldon Factory.
The workers of GUYSUCO have a right to be displeased about the award. And when they learnt about the salary of a top executive this will only heighten their concerns. But they must be careful not to fall into the trap of making management the scapegoat without an indebt assessment about what went wrong.

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DO NOT MAKE MANAGEMENT THE SCAPEGOATS

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DO NOT MAKE MANAGEMENT THE SCAPEGOATS

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