December 9 2013 Latest news:
Friday, September 20, 2013
BT’s former boss will walk away from the telecoms giant with a £9million payoff to take up his new job as a Government minister.
Lord (Ian) Livingston will receive a “reward for success” of about 2.6million shares, worth £8.9m at yesterday’s prices, from deferred annual bonuses and long-term incentive schemes.
BT, whose shares have hit a 12-year high in recent days, said the payoff was appropriate given the “major contribution he has made to BT’s turnaround in recent years”.
Ian Livingston was named in July as the Prime Minister’s new trade minister and joined the House of Lords later that month as a Conservative life peer with the title Lord Livingston of Parkhead.
He takes over from former HSBC chairman Lord Green in the role and begins the unpaid Government post in December.
BT’s new chief executive, Gavin Patterson, replaced Lord Livingston at the helm of the telecoms group earlier this month.
Chairman Sir Michael Rake added: “Ian has done a wonderful job for BT and so this is clearly reward for success.
“BT is a far healthier company than it was when he took over as chef executive and I am confident it will continue to thrive under Gavin’s leadership.
“We have some tremendous foundations to build on now and there are exciting times ahead.”
Lord Livingston’s payoff includes 1.8m of deferred bonus shares plus around 800,000 shares from a long-term incentive plan. However, he will forego up to another 2.5m BT shares by leaving. His payoff follows an £8.5m cash-and-shares packet earned during the last financial year.
Mr Patterson will earn a £925,000 salary, level with his predecessor. Including bonuses and long-term share incentives, he could be entitled to a maximum £6.8m annual payout, depending on maxing out performance targets.
BT said it has shifted its chief executive’s remuneration to include a smaller cash and shares bonus and greater potential for long-term share awards.
Lord Livingston was brought up in Glasgow, attended Manchester University and was the youngest FTSE 100 finance director when he joined the board of electronic retailer Dixons, aged 32.
He joined BT as group finance director in 2002, before taking over as chief executive of BT Retail in 2005.
When he became BT boss in June 2008, the former state-owned monopoly was burdened with huge debts and spiralling costs. He spearheaded a major turnaround, which involved slashing costs and bringing its pension deficit under control.
In recent years BT has been rolling out super-fast fibre optic broadband and this year expanded into sport broadcasting with a deal to show 38 live Premier League games a season.
Investors will get to vote on BT’s new chief executive pay strategy at its annual meeting next summer.