Guess who's having a good recession? Brian Patterson, former Chairman of the Financial Regulator
Last Friday, the Kilkenny Chamber of Commerce held its annual President's lunch at the Newpark Hotel. In an audacious move, the theme of the meal was "A Time for Optimism". And who should address this unfashionable notion? Step forward, Brian Patterson, now CEO of Vodafone Ireland, but until April 2008, chairman of the Irish Financial Services Regulatory Authority. By Roddy Flynn
As reported by Thomas Molloy in Saturday's Irish Independent, Patterson's interpretation of the theme was novel – optimism apparently means lashing out at everyone else and ducking responsibility for one's own actions.
Hence Patterson (pictured) opined to the assembled diners that "everyone" was responsible for the economic mess: indeed he repeated the line "we were all responsible" several times throughout his speech. "We" is a bit problematic here though since it didn't appear to include Patterson himself.
Patterson targeted for blame anyone who bought a house or shares over the past decade but made no reference at all to the failure of Financial Regulator under his chairmanship (2002 – 2008) to ensure that the banks were adhering to the Regulator's own principles on prudent lending practices.
Strikingly, this unwillingness to get tough with the banks had been pointed out long before everything went pear-shaped in 2008. In 2006, the Financial Regulator came in for criticism from its own Consumer Consultative Panel which suggested that when it came to actually applying regulations to the banking industry the Regulator gave the "impression that, if it can find a reason not to act, this will be the preferred outcome."
Regardless of this, the same 2006 Independent article referred to Patterson's assertion that "the Irish model of combining a consumer agenda (the Regulator) with prudential supervision (the Central Bank) had proven so successful that a number of other countries were now considering adopting the model."
(Any comment on this assertion as to the success of this model from a 2010 perspective would seem redundant.)
As for how good a recession Patterson is having, it's open to question. He's clearly used to significant salaries: as far back as 2001, the Sunday Tribune estimated that he had earned £IR1.18m.
And whilst chairing the Financial Regulator he was also chair of the Irish Times (indeed both appointments were made within the same week) and in his final year as non-executive chairman of the Times his salary for that position alone was paid €101,000.
However, even though he has left both the Times and the now effectively defunct Regulator behind, the shift to Vodafone is unlikely to have seen him fall on hard times.
Although Vodafone Ireland does not appear to publish a standalone annual report, internationally the company as a whole has ridden out the recession pretty well. According to the most recent annual report Vodafone saw revenues increase 8.4% to £44.5bn in the year up to March 2010. True profits were down in the same period by 2.5% but the company still managed to clear £11.5bn.
This was reflected in the salary scales of the company's UK-based non-executive directors all of whom enjoyed an increase. Thus, the chair of Vodafone Sir John Bond saw his salary increase from £UK575,000 to £UK600,000 despite the recession. And given that based on the disaggregated figures that are available (though only up to 2007), Ireland is perhaps the most profitable region within Vodafone based on revenues per subscriber, there's no particular reason to think Brian Patterson has seen his salary decline.
The same is not true for other Vodafone Ireland employees, however. In 2002 the Sunday Tribune described Patterson as noted for "restructuring companies in the throes of change" . And since Patterson's arrival at Vodafone there has been some serious "restructuring".
Despite the remarkably high profits hitherto earned per subscriber, in December 2008 the company announced it was cutting 150 employees due to "the difficult economic climate" and in July of this year a further 130 cuts were sought based on a similar premise.
Despite all this, Patterson continues to look on the bright side, regardless of how difficult that will be. In another sterling example of the financial community's willingness to engage with reality, he informed the Kilkenny Chamber of Commerce that in future he intends "to avoid negativity, and no longer reads Morgan Kelly, no longer watches Vincent Browne, reads Shane Ross or listens to Joe Duffy." So there's a strategy going forward: take a deep breath, bury one's head in the sand and leave it there until the dust has settled.