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Smith & Nephew's culture clash over cash
The board of the British medical devices company Smith & Nephew has parted ways with CEO Namal Nawana after only 18 months.
The board of the British medical devices company Smith & Nephew (S&N) has parted ways with CEO Namal Nawana (pictured) after only 18 months, say Sarah Neville and Sarah Provan in the Financial Times. The problem was pay.
Despite receiving a $1.5m base salary and a total package of up to $6m, Nawana had complained a few months ago that in a previous job he had been paid "multiples more than what I'm paid here in the UK". The firm has said it was unable to match his "expectations on pay and reward" while staying "within corporate boundaries".
There's "no doubt" about who instigated the quarrel that led to Nawana's departure, says Nils Pratley in The Guardian. Having talked about his job as a "great honour" when he was first appointed, it now turns out that Nawana's "warm feelings" were "dependent on the willingness of his new employer to whack up his pay at the first opportunity". So when Smith & Nephew refused, making it clear to him that it is a UK company that pays according to UK notions of "acceptable avarice", it was inevitable that he would leave.
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Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.
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Nawana is not being completely unreasonable, says Ed Cropley on Breakingviews. "While generous," his pay package "lagged peers in the US." He has also added value, with shareholders £3.3bn better off since his appointment. Still, he knew what he was signing up for, so "he should have bargained harder before accepting the job". By refusing to cough up, S&N has shown that "principles and employment contracts matter".
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