Ruminations on the electronics industry from David Manners, Senior Components Editor on Electronics Weekly.
Ed Sacks The CMO
‘It’s time for another execution,’ Ed confides to his diary, ‘The Brats want the C-Execs out as an exercise in fear and regeneration and I have to pick the guys off one by one and sack them. It’s been a month since I sacked the CIO – cleanly and rather efficiently IMHO.”
The Brats is what Ed calls the 20-something year-old super-sharpies who monitor Ed’s company for its private equity owners. The Brats have told Ed it’s the practice of private equity companies to routinely sack top execs without compensation, even if they are performing well, to create an atmosphere of uncertainty and dispel complacency.
‘I’ve decided that the next C-exec for the chop will be the CMO,’ writes Ed, ‘he’s going to be aggressive, but I can break him.’
Two days later the diary entry reads: ‘Had the CMO in this morning.”‘
‘”I’m replacing you,” I told him bluntly, ‘it’s not about performance, it’s just that we have someone else in mind for the role”.’
‘”You bastard,” he shouted, “I’ll blacken your name in this industry. I know all the dirt on you. I’ll sue you, and the company”.’
‘”Look at your contract,” I tell him, “you can be terminated at any time, without cause and without compensation. By signing that contract you have specifically debarred yourself from bringing any action against this company for wrongful dismissal or any other cause connected with your employment. You have signed a secrecy agreement which means that any disclosures about the company allow us to sue you. And we will. We’ll take everything you’ve got”.’
‘Collapse of stout party,’ writes Ed, ‘the CMO went white and slumped like a deflating balloon. He completely changed his tune.’
“Ed please don’t do this,” pleaded the CMO, “we’ve just moved into a house we can’t really afford and Amanda’s insisting on spending a fortune doing it up and on furniture. If she knows I’ve lost my job she’ll probably leave me.”
Two weeks later the diary entry reads: ‘I heard today that the ex-CMO’s wife has kicked him out – one of the few forecasts which the CMO got right.’
‘Attractive girl Amanda, might be lonely, I’ll pop round and supply TLC,’ Ed confides to his diary, ‘roll on my $25 mill.’Tags: diary entry, ed sacks, equity owners, private equity companies, wrongful dismissal