Fat cat Knapp: It's time to wake up

Over the past few years we have regularly written two types of very conflicting story.

On one hand there are those stories which recount the worst aspects of the high-tech downturn - struggling firms laying off staff and reporting poor results. On the other hand we have reported the 'fat cat' stories about the bosses at these self-same companies awarding themselves massive pay rises and bonuses in spite of the results and the falling share price.

Witness Barclay Knapp's proposed $2m remuneration package announced this morning. Knapp is the boss of cable operator NTL. During his time in charge of the company he has managed to run NTL close to extinction, accumulating massive debts and axing staff by the thousand. His biggest achievement - if achievement is the right word - is to ensure the company survived. He managed that by filing for bankruptcy and then hammering out a deal with bondholders that should ensure NTL is around long enough at least to merge with its rival, Telewest.

And Knapp is not alone in this kind of behaviour - far from it. Vodafone boss Chris Gent's constant pay-hikes during the darkest days of the telecoms downturn raised a good few eyebrows. Then there are those at companies such as BT, Marconi and WorldCom who raked it in despite prolonged periods of recession and mounting debts.

Conversely there are those who opt to draw a salary of just $1 until their company turns a corner, as witnessed with Cisco chief John Chambers earlier this year. Chambers and a number of others realise the PR brownie points to be gained from such a stunt. Of course they have enough money to live on in the style to which they've become accustomed, but that's not really the issue. If they got rich in more profligate times then that's one thing - if they have now repressed the greed which sees others chasing ever-larger budgets, despite the mounting pile of P45s in HR's outbox, then full credit to them.

The solution to all this is as simple to express as it is difficult to implement. Put bluntly, 'No profits, no bonuses'. Knapp claimed twice his basic salary in bonuses last year and many other high-tech bosses did likewise.

This wouldn't happen in other parts of the company. You can be sure if you work in an NTL call centre, and fail to meet any of the targets of your job, you would not be welcome in the manager's office asking for a 400 per cent pay rise.

It is time to stop the fat cat behaviour. We cannot rely upon the Barclay Knapps of this world to decline the opportunity to get richer when it presents itself, but shareholders for one should have the sense to veto exec pay hikes if the company is under-performing.

Remember, no profits, no bonuses. No argument.