BT shareholders revolt over 'excessive' pay of their chief executive just weeks after the company announced 13,000 job cuts
PUBLISHED: 09:00 12 July 2018
BT has suffered a shareholder rebellion over outgoing chief executive Gavin Patterson's bumper £2.3 million pay packet.
A total of 34% of investors rejected the telecoms group’s remuneration report at its AGM in Edinburgh, which included the 2017 payout for Mr Patterson.
Mr Patterson trousered a £1.3 million annual bonus, a £997,000 basic salary and £299,000 in pension payments.
The £2.3 million figure represents a £1 million hike in his annual pay and was disclosed in May, just weeks after BT swung the axe on 13,000 jobs, two thirds of them in the UK. At BT’s research centre at Adastral Park in Martlesham, where BT employs 3,000 employees, staff were said to be “very anxious, angry and upset” at the time over the potential job losses, according to Prospect Union’s national secretary Philippa Childs.
Most of the jobs to disappear will be back office and middle management jobs, and Prospect set up a campaign committee to work closely with BT staff to try and identify where job losses could occur.
The AGM result will see BT placed on a public register of firms in which more than 20% of shareholders have revolted over a resolution.
Ahead of the meeting, several shareholder advisory groups - including ISS and Pirc - had urged investors to vote down the award.
Pirc branded the payout “excessive”, while highlighting several of BT’s failings.
It added: “The company’s recent poor share performance, the decision to cut 13,000 jobs in order to deal with losses, and the losses brought about by BT Italy’s accounting practices are not reflected in the CEO’s remuneration.”
The company has been dealing with the aftermath of an accounting scandal at its Italian division, which resulted in a £530 million write-down and a major fall in its share price last year.
Last month BT announced that is to replace Mr Patterson later this year amid waning support for the company’s trajectory.
Mr Patterson’s departure will end a near-five year stint as chief executive, having been at BT for a total of 14 years.
BT is also vacating its headquarters in central London as part of a revamped cost-cutting drive aimed at helping to save around £1.5 billion.
BT said in a statement: “We are naturally disappointed with the lower level of support received for our remuneration report.
“Historically, both the remuneration report and our remuneration policy have received overwhelming shareholder support and over the past two weeks we have been in dialogue with our major shareholders and proxy advisers to discuss their questions and concerns.
“We understand that the lower level of support for the remuneration report is, in the most part, attributable to the annual bonus payment to BT’s chief executive for the 2017/18 performance year.
“During the remainder of 2018 we will engage further with our shareholders and proxy advisers to understand in full detail the reasons for their concerns and whether we should consider any changes to our longer term approach to remuneration.”