Arun Sarin’s Roller-coaster ends as he Collects Vodafone’s Golden Goodbye

June 11, 2008


When Arun Safin took over at Vodafone it was widely considered that he was in for a roller-coaster ride. So it came to pass. But are we seeing an increasingly politicised role of the CEO to the detriment of their functioning as long-term leaders?

The Telegraph’s story [June 2008]centred on the scale of the golden goodbye.

Assuming the company hits maximum targets, his shares and options will be worth just over £22m at today’s prices when he leaves: he has 20m unvested options worth £4m, 8.5m unvested performance shares worth £8m, unexercised vested options worth £4.4m, and previously awarded shares worth £5.7m. Since he joined, the company has also paid £2m into his pension pot.

The leadership story had already broken last month when Arun Safin’s departure was leaked.

Mr Sarin’s move to the top job at Vodafone in 2003, when he replaced Sir Christopher Gent, proved to be the continuation of a roller-coaster ride for the Vodafone board and its shareholders. Decisions to abandon a near-$40bn (£20bn) takeover of AT&T Wireless, and later to stick with Vodafone’s minority stake in Verizon, aroused scep¬ticism among shareholders about Mr Sarin’s position in the world’s biggest mobile phone market.

It gets easier to go

Business leaders of large firms are increasingly suffering considerable grief in their jobs from shareholder activists acting on behalf of powerful financial interest groups. That can be argued to have some positive effect on effort. But does it always have a positive effect on performance?

An embattled CEO may become far too concentrated on what might be called the political dimension of survival, than on the other components requiring attention for building a successful company.

Leaderswedeserve has been following this roller-coaster ride as an example of a boardroom battle.

The case pointed to the increasingly frequent influence of boardroom activists on business leaders and we concluded that Mr Sarin would not have an easy ride. It was not a difficult prediction to make.