WEBVTT - Why Maximizing Revenue Isn’t a CEO’s Only Job 0:00:04.360 --> 0:00:07.440 Welcome to In the City, Bloomberg's podcast, connecting you to 0:00:07.480 --> 0:00:11.400 the conversations and the stories shaping the world of finance. 0:00:11.720 --> 0:00:14.080 I'm David Merritt, and this week we bring in the 0:00:14.120 --> 0:00:18.279 second part of our conversation with Paul Pullman. Paul was 0:00:18.320 --> 0:00:22.080 the chief executive officer of Unilever for a decade from 0:00:22.160 --> 0:00:24.759 twenty and nine to twenty nineteen. Before that, he worked 0:00:24.760 --> 0:00:28.040 for Procter and Gamble and Nesle. We asked Paul about 0:00:28.040 --> 0:00:30.720 his experience leading Unilever, one of the world's biggest consumer 0:00:30.840 --> 0:00:35.400 goods companies, and also his commitment to proving that putting 0:00:35.440 --> 0:00:39.640 a sense of moral purpose and sustainability front and center 0:00:40.040 --> 0:00:43.440 could actually be a more profitable way to run a business. 0:00:45.040 --> 0:00:47.480 Paul, you were in charge of Unilever for ten years. 0:00:47.800 --> 0:00:50.479 You've had to make decisions and the longer term. On 0:00:50.479 --> 0:00:53.360 a short term, how difficult just is it to be 0:00:53.400 --> 0:00:56.080 a chief executives? Like, how do you when you realize 0:00:56.280 --> 0:00:58.720 what you're worth? Is it in a crisis or in 0:00:58.760 --> 0:01:01.600 the long term kind of motivation of the troops? 0:01:02.160 --> 0:01:04.720 Well, it's probably both, And in fact it's a very 0:01:04.760 --> 0:01:07.560 difficult job in the sense that you have to be 0:01:07.640 --> 0:01:11.360 promoted into that job without really having ever done it, 0:01:11.800 --> 0:01:13.800 and yet the skill sets that are needed for that 0:01:13.959 --> 0:01:17.720 job are quite different. So when I became CEO, I 0:01:17.800 --> 0:01:22.400 wasn't feeling as comfortable and as confident as I would 0:01:22.480 --> 0:01:25.319 normally feel. And there are very few people you can 0:01:25.360 --> 0:01:27.880 reach out to and very few people that can help 0:01:27.920 --> 0:01:31.399 contextually in a situation like that, especially when you come 0:01:31.400 --> 0:01:34.000 into a company you've not worked before and you don't 0:01:34.000 --> 0:01:37.039 fully understand how it functions, and yet everybody expects you 0:01:37.120 --> 0:01:40.240 to immediately come with the oracle of Delphi and make 0:01:40.280 --> 0:01:43.119 the right decisions and the one hundred day plan. I've 0:01:43.120 --> 0:01:45.480 always personally objected to that, but it's difficult. 0:01:45.880 --> 0:01:47.280 So did you feel what you've felt a little bit 0:01:47.280 --> 0:01:49.320 of what imposter syndrome when you started? 0:01:50.160 --> 0:01:51.279 I definitely. 0:01:52.720 --> 0:01:55.560 Said to the board that there are better people than 0:01:55.600 --> 0:01:57.560 me to take that job, and I actually gave them 0:01:57.680 --> 0:02:00.160 names to interview. 0:02:00.040 --> 0:02:00.720 Two thousand and eight. 0:02:00.800 --> 0:02:03.160 So definitely I wasn't looking for a CEO job day 0:02:03.480 --> 0:02:07.280 because you know, it's all serendipity, and your predecessor needs 0:02:07.320 --> 0:02:09.880 to leave, the board needs to look it's always better 0:02:09.919 --> 0:02:12.240 to have an internal candidate that wasn't there. So this 0:02:12.360 --> 0:02:14.560 is a lot of serendipity, and my name was in 0:02:14.600 --> 0:02:16.960 the papers because I didn't get the job at at 0:02:17.000 --> 0:02:18.840 Nestley at that time. They gave it to a lifer 0:02:20.240 --> 0:02:22.919 Paul book at that time. So that's why I headhunters. 0:02:23.280 --> 0:02:23.680 How long? 0:02:23.760 --> 0:02:26.080 How long did it take you to sale? Like on 0:02:26.200 --> 0:02:28.960 top of the job, But you know, I. 0:02:28.919 --> 0:02:31.160 Don't think you'll ever be because you always have to 0:02:31.200 --> 0:02:32.960 be sharp. The moment you feel you're on top of 0:02:33.000 --> 0:02:35.239 the job, where you become relaxed, I think it's time 0:02:35.280 --> 0:02:39.120 to move on, and some CEOs and my signal for 0:02:39.200 --> 0:02:42.120 that with other CEOs is when they start talking about 0:02:42.160 --> 0:02:45.919 all the wonderful things they've done, then it's really it's. 0:02:45.840 --> 0:02:48.200 Really time to go. So you have to be no. 0:02:48.320 --> 0:02:50.280 I think the most important skill sets that you have, 0:02:50.360 --> 0:02:52.200 that you always need to have and also in terms 0:02:52.240 --> 0:02:56.160 of crisis, is to have a high moral compass. And 0:02:56.200 --> 0:02:58.400 it's not surprising that the first thing I did was 0:02:58.400 --> 0:03:01.560 reads out to Bill George, who was the chairman of 0:03:01.639 --> 0:03:04.560 Metronics but now teachers at Harvard had written a book 0:03:04.600 --> 0:03:07.799 what was called two Norse find your own purpose, Find 0:03:07.800 --> 0:03:10.280 your own you know what makes you tick. I don't 0:03:10.320 --> 0:03:12.600 believe you can be a purpose driven company or a 0:03:12.600 --> 0:03:16.120 sustainable company if you're not purposeful or sustainable yourself. 0:03:16.160 --> 0:03:17.880 EAD So I worked with him to. 0:03:19.240 --> 0:03:21.400 Work with the five hundred top leaders at un for 0:03:21.480 --> 0:03:24.840 at that time, I had an other hidden agenda. I 0:03:24.919 --> 0:03:28.200 needed to understand these five hundred people because they were 0:03:28.200 --> 0:03:30.400 going to be the key people I needed to rely 0:03:30.480 --> 0:03:32.880 on in terms of building our new strategy. So it 0:03:32.919 --> 0:03:35.800 gave me a year actually to think about the strategy, 0:03:36.040 --> 0:03:38.520 but also to collectively work on what the purpose of 0:03:38.560 --> 0:03:40.840 this company should be, because we clearly had lost it 0:03:41.160 --> 0:03:45.920 and that was a very powerful thing. But the leadership skills, 0:03:46.000 --> 0:03:49.680 I think are evolving, but the basic leadership skills that 0:03:49.720 --> 0:03:52.000 you need to run these companies will always say the same. 0:03:52.080 --> 0:03:54.240 But Paul, when you talk about purpose, I mean, does 0:03:54.280 --> 0:03:56.560 it have to be good purpose or can the purpose. 0:03:56.400 --> 0:04:00.680 Also just be making money keeping shareholders having making money, 0:04:00.800 --> 0:04:01.640 which is true. 0:04:01.400 --> 0:04:03.360 For many that operate under that way. But let me 0:04:03.400 --> 0:04:05.720 remind you that the average tenure of a CEO has 0:04:05.720 --> 0:04:07.760 now dropped to four and a half years. Let me 0:04:07.800 --> 0:04:09.760 remind you that when I was born, the average length 0:04:09.800 --> 0:04:13.240 of a publicly traded company's existence for sixty seven years. 0:04:13.720 --> 0:04:16.919 Now it's seventeen years. I think we've shown that the 0:04:16.960 --> 0:04:20.279 Milton treatment period, which was disguised by many other things, 0:04:21.040 --> 0:04:25.200 is more destructive for society now than we thought. That 0:04:25.200 --> 0:04:29.200 the single minded pursuit of shareholder primacy doesn't really work. 0:04:29.200 --> 0:04:33.120 The graveyard of companies that pursue that strategy is absolutely 0:04:33.160 --> 0:04:37.239 full of that. So increasingly we can show that companies 0:04:37.279 --> 0:04:40.440 that work multi stakeholder longer term, who purpose at the core, 0:04:40.680 --> 0:04:44.360 have at least a better opportunity to get a better return, 0:04:44.680 --> 0:04:48.920 And I think that's increasingly the model the financial market now. Interestingly, 0:04:48.960 --> 0:04:51.520 there are more people now in the financial market trying 0:04:51.520 --> 0:04:54.800 to encourage companies to be more longer term than the 0:04:54.839 --> 0:04:58.599 companies themselves are. So it's this notion that it's the 0:04:58.640 --> 0:05:01.200 financial market that puts that pressure on you. I would 0:05:01.240 --> 0:05:04.080 actually even challenge right now. There are some elements of 0:05:04.120 --> 0:05:06.800 the financial market that put pressure on you, but you 0:05:06.839 --> 0:05:09.160 don't always have to give in to those. You know, 0:05:09.800 --> 0:05:12.119 if you let your unile eve at over one hundred 0:05:12.120 --> 0:05:15.120 thousand decent shareholders, if you want to call it that way, 0:05:15.720 --> 0:05:17.560 if you would listen to all the shareholders and do 0:05:17.600 --> 0:05:19.599 what they were asking you to do, your company would 0:05:19.600 --> 0:05:20.800 be bankrupt before you knew it. 0:05:21.240 --> 0:05:24.000 I mean you've spoken about the need for that sort 0:05:24.000 --> 0:05:26.720 of moral compass as a kind of imperative increasingly now 0:05:26.760 --> 0:05:31.120 to attract staff as well, because otherwise people increasingly will 0:05:31.160 --> 0:05:34.279 make decisions about who they want to work for depending 0:05:34.320 --> 0:05:37.920 on that north star, that moral compass. And that's a shift, 0:05:37.960 --> 0:05:39.600 isn't it. Now, that's a generational show. 0:05:39.600 --> 0:05:41.920 Well, we've seen a big shift, David, and it's actually 0:05:41.920 --> 0:05:45.159 a generational shift, but not as big as the shift itself, 0:05:45.279 --> 0:05:47.640 if I may say. In one of my foundations, we 0:05:47.720 --> 0:05:50.640 ran a study amongst four thousand people in the US 0:05:50.680 --> 0:05:53.400 and Europe, and what we found was that two thouirds 0:05:53.440 --> 0:05:55.760 of the people now select companies. Of course they want 0:05:55.760 --> 0:05:58.599 good pay and be competitive and take care of their families. 0:05:58.640 --> 0:06:01.360 That goes by itself. Two thirds of the people that 0:06:01.400 --> 0:06:05.279 were looking for jobs wanted to work for companies with 0:06:05.320 --> 0:06:07.400 a bigger purpose. People want more. They wanted to make 0:06:07.720 --> 0:06:11.160 a bigger difference in life they than just getting a salary, 0:06:11.440 --> 0:06:12.839 and that's a key driver. 0:06:12.960 --> 0:06:13.200 Now. 0:06:14.000 --> 0:06:17.120 Now, interestingly, thirty percent of the people we interviewed had 0:06:17.160 --> 0:06:20.760 deliberately left a company because they couldn't find that purpose. 0:06:21.360 --> 0:06:25.440 And sixty percent of the people we interviewed were actually 0:06:25.480 --> 0:06:28.840 considering leaving the company. Half of them didn't have confidence 0:06:28.880 --> 0:06:31.599 in the CEO. They said the talk and the walk 0:06:31.680 --> 0:06:34.360 were not the same. So in this survey, we call 0:06:34.480 --> 0:06:38.400 for higher ambitions of companies. We call for better communication 0:06:38.480 --> 0:06:41.960 than transparency, but we also for giving higher agency to 0:06:42.000 --> 0:06:44.040 the people in the companies to be part of that transition. 0:06:44.720 --> 0:06:46.840 So we call it conscious quitting. And that's probably a 0:06:46.839 --> 0:06:49.400 new trend. You are right that you see it go 0:06:49.560 --> 0:06:52.400 up when you get from the baby boomers to the millennials, 0:06:52.400 --> 0:06:55.080 to the Gen zs and the Gen Vice. You see 0:06:55.080 --> 0:06:58.760 the numbers going up, and generations now is ten years. 0:06:58.760 --> 0:07:02.240 By the way, it's not a generation the way we 0:07:02.240 --> 0:07:06.240 thought about it. Their loyalty to companies has also shortened. 0:07:06.600 --> 0:07:09.760 For each of those generations, it's now less than two 0:07:09.800 --> 0:07:12.800 years because they clearly can't find what they're looking for 0:07:12.840 --> 0:07:13.720 in these companies. 0:07:13.880 --> 0:07:15.840 Are they just being unrealistic? I mean the idea that 0:07:15.840 --> 0:07:16.200 they're not. 0:07:16.160 --> 0:07:18.360 At all know Liver we put purpose right in the 0:07:18.360 --> 0:07:21.200 middle and created the Unilever Sustainable Living Plan. We saw 0:07:21.240 --> 0:07:23.640 our engagement scores go up from the bottom tursile when 0:07:23.640 --> 0:07:25.720 the company was not doing so well, to the top 0:07:25.760 --> 0:07:28.600 of the top tursile of eight thousand companies. We became 0:07:28.640 --> 0:07:32.280 the third most loucted company in LinkedIn, after Google and Apple. 0:07:32.480 --> 0:07:35.560 And we are not a company named. Unilever is an 0:07:35.640 --> 0:07:40.040 abstract name. The products are much better known, so no, 0:07:40.080 --> 0:07:42.800 we we really see that as a driver. In fact, 0:07:43.000 --> 0:07:44.680 I want to make a point there because it comes 0:07:44.680 --> 0:07:50.040 to mind. In twenty fifteen, sixteen or so, I was 0:07:50.080 --> 0:07:52.840 in a meeting here in London somewhere and the financial 0:07:53.880 --> 0:07:56.679 people from the city were saying, we cannot attract talent. 0:07:56.880 --> 0:07:59.240 So I thought it was strange because in Lever we 0:07:59.280 --> 0:08:01.440 had an attraction into more talent than we could deal 0:08:01.480 --> 0:08:05.280 with and was another problem. We didn't have any turnover 0:08:05.320 --> 0:08:07.720 in the company either, because nobody wanted to leave the company. 0:08:07.720 --> 0:08:08.640 This is another problem. 0:08:08.840 --> 0:08:10.800 But the people in the financial market were saying, oh, 0:08:10.800 --> 0:08:13.480 we have such a hard time attracting talent because all 0:08:13.520 --> 0:08:16.040 of a sudden there's pay restrains. Are you know my 0:08:16.120 --> 0:08:18.520 bonuses are being looked at? So I asked our people, 0:08:18.560 --> 0:08:21.560 I said, in my office, literally I was at Blackfriars 0:08:21.560 --> 0:08:24.680 where Unilever's officers are. I literally look out over the city. 0:08:24.880 --> 0:08:28.000 I said, just give me the numbers of the bonuses 0:08:28.120 --> 0:08:30.880 that these people were getting that year in the city. 0:08:31.160 --> 0:08:33.880 And what did we find That the bonuses of the 0:08:33.920 --> 0:08:38.120 city alone were bigger than the total salary bill of Unilever. 0:08:38.880 --> 0:08:41.360 And that's one hundred seventy five thousand employees trying to 0:08:41.440 --> 0:08:44.680 change the world. That's the power of purpose. If you 0:08:44.720 --> 0:08:47.640 say I can't attract people, you have to wonder why 0:08:48.000 --> 0:08:50.600 it's not because of salary. You can't solve everything by 0:08:50.600 --> 0:08:53.160 throwing money at it. I think that's proven to be 0:08:53.200 --> 0:08:54.559 the case in many things. 0:08:54.760 --> 0:08:55.920 But how do you motivate people? 0:08:55.960 --> 0:08:57.160 Then you do. 0:08:57.200 --> 0:09:00.559 Motivate people by making them part of something bigger than 0:09:00.600 --> 0:09:03.880 they can be themselves. Obviously, you want to invest in people, 0:09:03.920 --> 0:09:06.680 you want to recognize people, but above all, people. 0:09:06.480 --> 0:09:08.000 Want to be long. They want to be part of. 0:09:08.120 --> 0:09:11.080 So that's high. That's more important than Hey. 0:09:11.040 --> 0:09:14.040 No, there are always minimum conditions. It's like it's like 0:09:14.080 --> 0:09:17.199 your products you sell. Your products you sell need to perform, 0:09:17.320 --> 0:09:20.400 they need to taste good, otherwise why buy them. But 0:09:20.520 --> 0:09:24.440 then once you've done this minimal hurdle, people will put 0:09:24.480 --> 0:09:27.679 the will make a choice for the companies that they respect, 0:09:27.920 --> 0:09:30.720 for the products that are more sustainable. So most of 0:09:30.760 --> 0:09:33.000 these discussions are always people don't want to pay for 0:09:33.360 --> 0:09:37.640 sustainable products. It's just the wrong discussion. So we need 0:09:37.679 --> 0:09:41.160 to be able to provide the minimum competitiveness. But it's 0:09:41.240 --> 0:09:44.840 not just throwing money at it. At Unaliver, we certainly 0:09:45.840 --> 0:09:48.400 didn't see anybody leave during my ten year ten yure 0:09:48.520 --> 0:09:52.120 few exceptions, but not anybody leave. But yet everybody could 0:09:52.160 --> 0:09:54.439 have worked for another company and earn more, but they 0:09:54.440 --> 0:09:55.000 were part. 0:09:54.800 --> 0:09:55.439 Of a mission. 0:09:55.880 --> 0:09:59.920 Collectively, they were able to do things that they wouldn't 0:09:59.920 --> 0:10:02.720 be able to do by themselves. That was important enough 0:10:02.760 --> 0:10:05.880 to them, you know, reaching one point three billion people 0:10:06.240 --> 0:10:08.960 improving their health and well being, even with simple things 0:10:09.040 --> 0:10:12.079 like bar soaps where we did hand washing campaigns that 0:10:12.160 --> 0:10:15.840 literally saved millions of live a year. That's what motivated people. 0:10:16.200 --> 0:10:20.920 Trying to address the poverty that is under the farmer community. 0:10:21.400 --> 0:10:24.400 Usually the farmers are the ones that actually go to 0:10:24.440 --> 0:10:25.000 bed hungry. 0:10:25.000 --> 0:10:26.959 Believe it or not, Well, how do you communicate that? 0:10:27.160 --> 0:10:29.080 So did you spend a lot in internal communications? 0:10:29.080 --> 0:10:30.199 Because a lot of the times you can have a 0:10:30.240 --> 0:10:33.400 chief executives that has great ideas, you know a lot 0:10:33.440 --> 0:10:35.680 of kind of fire and the ability to change things, 0:10:36.120 --> 0:10:38.760 but the person way at the bottom of the chain 0:10:38.800 --> 0:10:39.640 may not know that. 0:10:39.679 --> 0:10:41.840 So you have to make sure that a good message 0:10:41.880 --> 0:10:42.959 goes across the board. 0:10:43.120 --> 0:10:47.920 Oh absolutely, So obviously you have your fission that you communicate, 0:10:48.440 --> 0:10:50.600 but that many companies do. The challenge is how do 0:10:50.640 --> 0:10:53.000 you make it come alive. So you have to work 0:10:53.040 --> 0:10:55.600 on many things. You have to work on your leadership teams, 0:10:55.920 --> 0:10:58.280 you have to work on your own behaviors. You have 0:10:58.360 --> 0:11:01.200 to work on the incentive system or measurements that you 0:11:01.240 --> 0:11:04.120 put around that you have to put capabilities in place. 0:11:04.400 --> 0:11:08.880 It's very hard work. It's very hard work. But in 0:11:09.000 --> 0:11:11.680 unally the penny dropped. I would say, when we could 0:11:11.720 --> 0:11:14.520 show that these brands that had this higher purpose Dove 0:11:14.640 --> 0:11:20.160 standing for women's self esteem, or domestos building more toilets 0:11:20.160 --> 0:11:23.160 to attack the issues of open devocation, or life by 0:11:23.160 --> 0:11:26.040 a bar soap, helping a child read the eights of five, 0:11:26.360 --> 0:11:29.520 when those brands were starting to grow faster and be 0:11:29.640 --> 0:11:35.840 more profitable, the penny dropped. The other thing that people 0:11:35.880 --> 0:11:38.400 want is they don't want to be part of creating problems. 0:11:38.480 --> 0:11:40.920 Nobody wants to be part of a problem. They don't 0:11:40.960 --> 0:11:43.959 want to be accused at dinner conversations that they put 0:11:44.000 --> 0:11:46.199 the plastics in the oceans, or that they cut the 0:11:46.280 --> 0:11:51.240 forests in of this world, or that they kill the 0:11:51.280 --> 0:11:54.679 biodiversity that we all need to live. They don't want 0:11:54.720 --> 0:11:57.720 to be accused of being part of the eight million 0:11:57.720 --> 0:12:00.560 people that die of air pollution because they've factories are 0:12:00.559 --> 0:12:02.680 still running on call. So they want to work for 0:12:02.760 --> 0:12:06.520 companies that might not be perfect but are certainly becoming 0:12:06.559 --> 0:12:09.400 part of the solutions. And as these solutions become bigger 0:12:09.679 --> 0:12:12.480 or the sense of urgency becomes higher, you need to 0:12:12.520 --> 0:12:15.439 do that partly individually but increasingly collectively. 0:12:16.040 --> 0:12:17.640 What approach did you take to the pay at the 0:12:17.640 --> 0:12:20.480 top though, as well, because in terms of motivating people, 0:12:21.559 --> 0:12:25.360 obviously over the last decades, the gap between the c 0:12:25.520 --> 0:12:28.920 suite compensation and the people and the factories is obviously 0:12:28.920 --> 0:12:32.040 wide and enormously. Was that something you tried to limit? 0:12:32.120 --> 0:12:34.320 And where do you stand on this argument that maybe 0:12:34.480 --> 0:12:37.079 here in Britain we need to pay chief executives more. 0:12:37.160 --> 0:12:39.120 We're still paying them less here than they do in 0:12:39.120 --> 0:12:39.959 the United States. 0:12:40.080 --> 0:12:41.600 So I don't want to talk too much about myself, 0:12:41.640 --> 0:12:43.960 but I never talked When I went into Uniliver, my 0:12:44.080 --> 0:12:46.600 only request was to be sure that we had a 0:12:46.679 --> 0:12:49.600 gender diverse board. We had a very diverse board of 0:12:49.640 --> 0:12:52.080 six white Brits and six white Dutch and boy could 0:12:52.080 --> 0:12:54.640 they disagree. But I said, we need a global board, 0:12:55.080 --> 0:12:57.320 we need a gender diversity. We were the first board 0:12:57.320 --> 0:12:59.559 in the UK as fifty percent women. We had two 0:12:59.559 --> 0:13:02.440 from car too, from the far East. The first black 0:13:02.480 --> 0:13:05.520 woman from that went to Harvard and Fudson. A very 0:13:05.559 --> 0:13:08.839 good board actually, and that was to me important because 0:13:08.880 --> 0:13:13.280 I needed the support driving these major transformations, and boards 0:13:13.280 --> 0:13:16.720 that are aligned with what you do is so important 0:13:16.720 --> 0:13:19.960 to be successful. But other than that, I did not 0:13:20.040 --> 0:13:23.839 ask anything. So my starting salary was less than my predecessor. 0:13:24.360 --> 0:13:27.199 And then you do benchmarks like anybody does. It's a 0:13:27.280 --> 0:13:30.800 race to the top because CEOs are very carefully trying 0:13:30.840 --> 0:13:33.360 to find the right pool of benchmarking so that it 0:13:33.360 --> 0:13:36.240 looks like they get underpaid. And there's this notion that 0:13:36.280 --> 0:13:38.240 has crept in. If I don't get more than the other, 0:13:38.600 --> 0:13:40.800 the perception must be that I do a worse job. 0:13:41.200 --> 0:13:43.560 So from the start I said I don't want my 0:13:43.600 --> 0:13:46.120 salary to be moved. I earned more than I thought 0:13:46.160 --> 0:13:50.400 I ever earned, and it was more than I ever needed. 0:13:50.920 --> 0:13:54.600 So I changed the compensation plan for unial lever quite 0:13:54.679 --> 0:14:00.920 dramatically made it a performance driven plan, made it a 0:14:01.040 --> 0:14:06.000 five year plan, so its long term focus suggested that 0:14:06.080 --> 0:14:09.520 people invest as short term bonuses in the company shares 0:14:09.520 --> 0:14:13.040 to be committed instead of anything else and could only 0:14:13.040 --> 0:14:15.280 participate in the long term plans if they did that. 0:14:15.720 --> 0:14:18.840 So the performance requirements went actually up. People had to 0:14:18.840 --> 0:14:21.880 work twice as hard to get paid less, and it 0:14:21.960 --> 0:14:25.240 didn't make anybody leave because they were all paid well. 0:14:25.280 --> 0:14:28.160 And when the company started doing well behind our strategy, 0:14:28.200 --> 0:14:32.000 when we got our three hundred percent return, people were rewarded. 0:14:32.080 --> 0:14:34.520 And every year when the board came and said we 0:14:34.560 --> 0:14:36.960 want to pay you more because you're grossly underpaid, I 0:14:36.960 --> 0:14:38.520 said I don't want it, but I want you to 0:14:38.520 --> 0:14:41.560 put it in the annual report so that people see 0:14:41.960 --> 0:14:44.920 that we should have pay restrained. It is unacceptable that 0:14:45.000 --> 0:14:47.440 in the US, for example, if you look since the 0:14:47.520 --> 0:14:50.480 end of the seventies, still now, CEO pay has gone 0:14:50.560 --> 0:14:54.680 up nearly fifteen hundred percent. That is far ahead of 0:14:54.720 --> 0:14:57.520 what even the stock market went up. So that is 0:14:57.560 --> 0:15:01.360 no link to performance. That is just driven by greed. 0:15:01.480 --> 0:15:01.960 Is nothing else? 0:15:01.960 --> 0:15:03.160 Where does that end? Is that just keeping? 0:15:03.200 --> 0:15:06.600 Where is that the average paid now, total compensation in 0:15:06.600 --> 0:15:09.680 the FUCI one hundred here for the biggest companies is 0:15:09.720 --> 0:15:13.120 thirteen million dollars. It's more than I earned every year 0:15:13.120 --> 0:15:17.160 in Unilever, but doesn't bother me. But why should we 0:15:17.240 --> 0:15:20.240 have these high salaries to attract talent? Is the issue 0:15:20.240 --> 0:15:23.600 of attraction the salary, or is the issue of attraction 0:15:24.040 --> 0:15:27.240 the purpose or the UK economy or the low pound 0:15:27.280 --> 0:15:31.280 because of Brexit or other things? So what are the 0:15:31.320 --> 0:15:34.760 real issues that prevent you? Often it is because many 0:15:34.800 --> 0:15:38.200 companies don't have good succession planning in place. So why 0:15:38.320 --> 0:15:40.800 throw money at a problem when that problem is not 0:15:40.960 --> 0:15:44.520 created by the money? And frankly, when society needs more trust, 0:15:45.080 --> 0:15:48.360 the worst thing that you can do is keep cranking 0:15:48.440 --> 0:15:51.280 up CEO salaries. Last year, the salaries in the UK 0:15:51.360 --> 0:15:54.600 went up twenty percent for CEOs when the efforts worker 0:15:54.680 --> 0:15:57.920 in the street had to suffer still the tremendous consequences 0:15:58.240 --> 0:16:01.680 from COVID. This doesn't make sense. That's what I'm trying 0:16:01.720 --> 0:16:04.040 to say to CEOs if you want to gain the trust, 0:16:04.040 --> 0:16:06.240 because at the end of the day, it's all about trust. 0:16:06.480 --> 0:16:08.560 If you want to lead these companies, and how do 0:16:08.640 --> 0:16:10.760 you get people wish you when you lead these companies 0:16:11.120 --> 0:16:16.600 is to be trustworthy, you know, and trustworthy comes from behavior. 0:16:17.160 --> 0:16:21.400 So it's great to have great statements, great values or 0:16:21.440 --> 0:16:25.080 overall missions, but if your behavior doesn't align, you get 0:16:25.080 --> 0:16:27.600 a rotten culture. And that is what happens in most 0:16:27.640 --> 0:16:30.280 of these companies that run into trouble. We see it 0:16:30.360 --> 0:16:33.520 over and over and over again. So salaries is a 0:16:33.640 --> 0:16:38.600 very important signal or lightning rod for how you really 0:16:38.640 --> 0:16:39.840 behave as CEOs. 0:16:40.920 --> 0:16:43.840 There's some m and A transactions or takeover deals that 0:16:43.880 --> 0:16:46.680 are very hostile and frankly are the stuff of legends. 0:16:46.720 --> 0:16:50.120 You had to fend off. One hundred and fifteen billion 0:16:50.160 --> 0:16:53.880 pounds were offered right yes by craft hignds like who's 0:16:53.920 --> 0:16:56.320 the first person you called? Did you remember that day 0:16:56.320 --> 0:16:56.920 when you got the call? 0:16:57.040 --> 0:16:57.120 Well? 0:16:57.160 --> 0:16:59.320 Absolutely, they offered me one hundred million. I'll tell you 0:16:59.440 --> 0:17:03.120 transparent here on the progress they offered me a hundred million. 0:17:03.160 --> 0:17:06.320 Because they think everything is for sale. Morals are not 0:17:06.400 --> 0:17:06.879 for sale. 0:17:07.359 --> 0:17:10.080 Somebody called you, so what happened? Somebody? You get on 0:17:10.320 --> 0:17:11.800 you get a phone call from someone, Well. 0:17:11.800 --> 0:17:13.400 I get a phone call from someone. At that time, 0:17:13.440 --> 0:17:14.040 we were. 0:17:15.440 --> 0:17:18.760 Difesting the march in business because the market was declining. 0:17:19.160 --> 0:17:22.720 Russia was being closed, so butter became cheaper. It was 0:17:22.760 --> 0:17:25.080 a business that wasn't global for us, so we decided 0:17:25.080 --> 0:17:28.719 to go out and I got a visit from someone 0:17:28.720 --> 0:17:31.600 from their site that I thought was looking at the 0:17:31.640 --> 0:17:34.560 march in business and he comes in and he says, 0:17:34.560 --> 0:17:36.439 we want to make an offer for the total company. 0:17:36.520 --> 0:17:37.520 So you were shocked. 0:17:37.960 --> 0:17:41.160 Well, you know, this is a moment that at least 0:17:41.160 --> 0:17:43.240 five seconds you is better not to say anything. 0:17:43.760 --> 0:17:45.240 But but you. 0:17:45.200 --> 0:17:49.800 Know, I've I always, I always feel that whatever happens 0:17:49.800 --> 0:17:51.360 to you, you just need to think about what you're 0:17:51.359 --> 0:17:53.280 going to do and not get into the panic mode. 0:17:53.600 --> 0:17:56.200 So the beauty is there as a silence because if 0:17:56.240 --> 0:18:01.520 the offer is not public, then nothing happens. And as 0:18:01.520 --> 0:18:03.640 soon as the rumors are there, the one who makes 0:18:03.680 --> 0:18:06.159 the offer has to then declare it publicly. And that 0:18:06.280 --> 0:18:08.359 came out in Alphar about a week later. So I 0:18:08.400 --> 0:18:12.000 was about to go to mel Mar and Southeast Asia 0:18:12.040 --> 0:18:14.919 for business visits, which I continued, but it gave me 0:18:14.960 --> 0:18:17.840 a week to think about this. Obviously I had informed 0:18:17.840 --> 0:18:20.040 the board, Obviously we had formed a group of people. 0:18:20.400 --> 0:18:22.639 Immediately, did you get did you get on the phone 0:18:22.640 --> 0:18:23.760 with every single board. 0:18:23.560 --> 0:18:26.280 Now immediately, Yeah, no, you have to when you get 0:18:26.280 --> 0:18:29.080 a novel like that. That's your fiduciary duty and would 0:18:29.119 --> 0:18:32.320 be wrong not to do that. But I also had 0:18:32.400 --> 0:18:34.680 prepared many scenarios. You say, when I you're a good 0:18:34.720 --> 0:18:37.879 CEO or not. Obviously you learn the sailing in the storms. 0:18:37.880 --> 0:18:40.520 You don't learn the sailing in the harbor, but you 0:18:40.560 --> 0:18:42.840 can practice a lot in the harbor, and we had 0:18:42.840 --> 0:18:45.280 practiced a lot with board scenarios. You always need to 0:18:45.320 --> 0:18:47.919 do that. So what if an activist would come on 0:18:47.960 --> 0:18:50.320 the board, what if we would have an offer? Now 0:18:50.359 --> 0:18:52.720 we thought it would never happen, given the size of 0:18:52.720 --> 0:18:55.000 the company and the success. This was, by the way, 0:18:55.080 --> 0:18:58.080 not driven by the performance in our share price. We 0:18:58.080 --> 0:19:02.119 were outperforming our competitors, we were outperforming the market. We 0:19:02.160 --> 0:19:05.399 actually were outperforming Warren Buffett, who was part of that consortium. 0:19:05.480 --> 0:19:07.960 So it wasn't the performance issue. It was purely a 0:19:08.000 --> 0:19:11.639 financial manipulation issue to get more out of it for 0:19:11.720 --> 0:19:14.520 a few people, the battle between a few billionaires and 0:19:14.560 --> 0:19:16.879 a company that was fighting for the billions of people. 0:19:16.960 --> 0:19:19.680 Were the board unanimous in wanting to reject it, like 0:19:19.760 --> 0:19:20.440 you always. 0:19:20.359 --> 0:19:22.520 Absolutely, but unanimous is also what are you going to 0:19:22.560 --> 0:19:24.000 do about it? What are the learnings? 0:19:24.240 --> 0:19:27.439 What are you Because the share price goes up seventeen percent, 0:19:27.480 --> 0:19:29.640 that was the offer they made. Your share price goes 0:19:29.680 --> 0:19:33.560