Shareholders in telecoms giant BT have staged a protest over executives’ pay after the group plunged into the red for the first time in eight years.
Around 11 per cent of investors voted against pay plans that could see BT chief executive Ian Livingston pick up a potential package including an annual bonus of up to double his £802,000 salary, a deferred bonus worth the same amount and incentive shares worth three times his basic pay. BT – which is cutting 30,000 jobs to slash costs – was slammed by angry shareholders over its executive pay deal after the group reported a £134 million annual loss following a hit of nearly £2 billion in its troubled Global Services arm.
But BT today announced a concession for staff that has been impacted by a group-wide pay freeze this year, with plans to award 50,000 call centre and engineering staff a one-off payment of £400 in two instalments.
The group also confirmed it would bring half of its customer-facing call centre roles in India back to the UK this year in a move aimed at preventing further job cuts.
Today’s near revolt by investors followed recent concerns raised by shareholder groups, the ABI and PIRC, over its potentially lucrative executive pay packages. BT, which has an army of more than one million small shareholders, was called on to justify the pay plans by investors at its annual general meeting in London today.
One shareholder branded the plans “incomprehensible” and hit out at payments including a £343,000 bonus to Mr Livingston and a £1.6 million termination payment to the former head of BT’s Global Services division, despite presiding over a disastrous year for the operation.
One shareholder, Ron Staple, of Leicestershire, criticised BT for paying out bonuses to senior executive while share prices have dived in recent years, to around £1 at current prices.
He said: “I can remember when the share price was well over £10 and there should be no talk of bonuses until we get back to that.”
Another shareholder voiced fury over BT’s plans to slash the dividend payout to investors as part of a programme to pay £525 million a year into its pension funds over three years to plug a gaping deficit.
He said: “You are taking away shareholders’ money and putting it into the pension scheme – no-one cares for the shareholders.”
Linda Clink, of Scotland, said BT needed “a bit more Scottish value for money” after raising complaints over the group’s service for small businesses.
BT chairman Sir Michael Rake told shareholders he understood their frustration at the group’s performance over the last financial year.
He said: “Despite the discomfort we have all suffered as shareholders, I believe BT has in place a chief executive and management team achieving improvements in performance.”
He added there would be a “relentless” focus on resolving issues at Global Services, which he admitted had been “completely unacceptable”.