Privatization,private equity and executive remuneration: privatizing QinetiQ

The process of modernizing the UK's public sector over the past 30 years has relied on significant amounts of privatization. Initially this was controversial, but by the time Labour came to power in 1997 even top secret defence establishments were subjected to selective marketization and sell-offs. This article explores the privatization of part of the Ministry of Defence and the relationship between private equity organizations and executive remuneration in the subsequently privatized company: QinetiQ. The sale of QinetiQ was controversial. It removed an essential element of the British defence research potential from direct state control and transferred ownership to an overseas private equity company. It may provide a template for future privatizations, but this article also shows some of the dangers inherent to this approach.