Society has a habit of calling on its underprivileged during crises. This is usually seen during times of conflict, when the badly off soak up gunfire and bomb blasts while commanders and college graduates enjoy a laugh back home. In the war against COVID-19, the frontline troops are the low-wage healthcare workers, bus and train drivers and supermarket staff exposed to the virus every day. The economy's "value creators," meanwhile, are in the plush bunkers of their countryside villas, armed with enough super-soft Andrex and Laurent Perrier champagne to outlast Armageddon.
COVID-19 disproportionately affects the old and unhealthy, politicians have preached. They are wrong, of course. At the time of writing, about 0.02% of the world's population had been infected, according to official statistics, and 0.001% had died. Of the remaining 99.98%, about a third are estimated to be in places under lockdown. The economic pain and loss of liberty will be felt most acutely by the young and the poor, by the city dwellers confined to bedsits and shoebox apartments, by the individuals one paycheck away from poverty.
The world is waking up to this fact, and parts of the telecom industry are responding. In the most dramatic example, Philip Jansen, the boss of UK telecom incumbent BT, today announced he would donate his entire salary for the next six months (at least) to the National Health Service (NHS) and small businesses affected by the crisis. BT also pledged not to cut jobs (for the foreseeable future) because of COVID-19. Non-managerial staff will enjoy a 1.5% pay increase this year. Managers won't.
The update shames the millionaire Premier League soccer stars whining at the recent suggestion they should take a 30% pay cut while they loiter in their mansions, serving no useful purpose. Cut wages and the NHS will lose money collected in tax contributions (or what the UK terms "national insurance"), they argue. If Jansen, on a basic wage of £1.1 million ($1.4 million), can donate his entire salary to the NHS, why can't a player earning about £3 million ($3.7 million, the average pay for a Premier League player) take a 30% pay cut and compensate the NHS from the remaining 70%? If the math is beyond them, their accountants can probably help.
But Jansen's morale-boosting move also puts pressure on other telecom chiefs in the UK and elsewhere. Unsurprisingly, the most disgraceful examples of inequality are to be found in the dog-eat-dog US, whose failure to construct anything that vaguely resembles a welfare state is now gruesomely apparent. Randall Stephenson, the CEO of AT&T, collected about $32 million in total compensation last year, according to filings with the Securities and Exchange Commission, about $3 million more than he scooped in 2018. This is a company, remember, that has dumped more than 32,000 employees deemed surplus to requirements in the last two years.
Verizon, AT&T's main rival, is not much better. Hans Vestberg, who led Ericsson into losses before he switched to one of its biggest customers, pocketed more than $18 million in total compensation last year as Verizon's CEO. Vestberg picked a good time to leave Ericsson, quitting before the US kicked off an investigation into international bribery by the Swedish equipment maker – some of which occurred during his tenure – and then fined it about $1 billion. In the meantime, Verizon has cut more than 20,000 jobs since the end of 2017.
Europe has its fair share of outrageously rewarded telecom bosses, though. At Spain's Telefónica, the opulently named Jóse María Álvarez-Pallete López was rewarded with €5.4 million ($5.8 million) in 2019 for his services as CEO while he was cutting one in ten Spanish jobs. No one needs reminding that Spain has been one of the countries worst affected by COVID-19, and yet Telefónica's public response to the crisis has been limited to offering service guarantees and more generous deals to customers. In Germany, Timotheus Höttges, the CEO of Deutsche Telekom, enjoyed a 13% pay rise last year, to a tasty €6.1 million ($6.6 million) in total compensation, as more than 5,100 jobs disappeared across the entire group.
Defenders of the executive class will dismiss this as socialist nonsense. Bash company bosses and the world's bright sparks and innovators will retreat to some kind of Ayn Randian enclave, there to set up a new capitalist system denuded of freeloaders, or what the author of Atlas Shrugged called "looters." Except they won't. Because without the low-wage employees in the vanguard of the COVID-19 fight, they'll never make it out of their homes again. And, at some point, the Laurent Perrier will run out.
- Eurobites: BT CEO Jansen waives pay for six months to help fund COVID-19 fight
- Telco Fat Cats: Still Worth It?
- Because They're Worth It?
- Europe's telco incumbents slashed 18.5K jobs in 2019
- AT&T and Verizon axed nearly 30K jobs last year
- Telefónica fails to stop rot after axing 4,500 jobs last year
— Iain Morris, International Editor, Light Reading