Clayton Hirst: A year of living dangerously? Not for the chief of Cable & Wireless

Graham Wallace, chief executive of Cable & Wireless, is a man who likes to defy the odds. During the insanity of the technology boom he sold companies while everyone else was buying. With the markets now in the doldrums, he's buying when most of his rivals are selling.

But his eagerness to swim against the tide of opinion does not end with his business strategy for the telecoms company. In the new era of corporate scrutiny, where high salaries, bonuses and generous share options have become the dirtiest of words in the City, Mr Wallace is again going against the grain.

He's up for re-election next month and is asking shareholders to appoint him on a two-year rolling contract. Nothing too controversial, you might say; it's hardly going to spark the same rumpus that greeted Vodafone boss Sir Christopher Gent and his gargantuan pay packet.

But it should.

In line with most quoted companies, Cable & Wireless has a policy of appointing directors on one-year contracts. Mr Wallace, however, has an extra year on his deal because he joined the company before the new, and eminently sensible, policy was implemented.

This means that if, heaven forbid, Mr Wallace should lose his job then he would receive two years' salary to help him get over the shock. That's a staggering £1.55m, not counting any extras he might negotiate for loss of benefits and bonuses. A fairly full price for failure.

Now, compare Mr Wallace's proposal with Sir Christopher's.

Last week the pinstriped one was painted as the most obese of City fat cats for the pay and bonus package he wants to give himself at a time when shareholders have lost their shirts. Unlike Mr Wallace, however, Sir Christopher is only on a one-year contract. If he gets kicked out, he'll receive a year's salary, not two – and the vast proportion of his remuneration package is linked, in the form of shares, to how well Vodafone performs. If he fails then, proportionally, he'll receive a lot less than his counterpart at Cable & Wireless.

Understandably, some of Cable & Wireless's shareholders are a little miffed at this situation. They are especially irked because the company justifies Mr Wallace's contract by explaining – rather nebulously – that changing it would not be in shareholders' interests. Why not? It doesn't really say.

Perhaps Mr Wallace wants this cash cushion because of his counter-cyclical strategy of refocusing the company on its loss-making internet arm, of buying businesses that precious few will touch.

But since Cable & Wireless has issued three profits warnings in 12 months, it's perhaps a little easier to understand why he's hell-bent on clinging on to his two-year contract.

Too much static in France

While Tony Blair was schmoozing Jacques Chirac last week , persuading him to buy our beef, the French government was engaged in its own spending spree in Britain.

State-owned Electricité de France snapped up Seeboard for £1.5bn, ending what had become a fierce bidding war for the power utility, with the likes of Scottish & Southern and Powergen losing out.

The deal is a tidy fit for EdF, which, under the banner of LE Group, already owns London Electricity and Sweb. But it also raises fresh questions about the state of the European electricity market.

While the doors to the British market are wide open, the gates to that of France are locked. EdF, whose sole shareholder is the French government, not only has an enviable monopoly, it has access to dirt-cheap debt. And it has used this to its advantage, buying not just in Britain but in Spain, Germany, Italy and Poland.

When I met with Vincent de Rivaz, chief executive of LE Group, just a few hours after he learnt that Seeboard was in the bag, he did his best to persuade me that he hadn't overpaid. EdF's man in Blighty said he had two good reasons to want Seeboard: its geographical position and the fact that it would bring LE's customers past the magical five million mark.

He argued there were, in fact, openings for British companies in the French electricity market. And Germany was probably worse than France, anyway.

But at the Barcelona summit, despite pressure from Mr Blair, France refused to deregulate fully. It still has an unfair position in the European electricity market.

clayton.hirst@independent.co.uk