Top bosses at BT set for bonus

BT boss set for £5m bonus

By Nicole Kobie

Posted on 2 Apr 2012 at 09:57

BT is set to hand its top executives millions in share-based bonuses to reward them for the telecoms giant's recovery.

In 2009, BT posted only its second ever annual loss, and admitted it lacked cash flow, putting pensions at risk.

At the time, executives were offered a three-year incentive, including a block of shares, if they managed to improve the company's fortunes and hit certain targets. This is the first BT share incentive plan to actually pay out in full.

More than a thousand BT people, including top management, are expected to benefit from a three-year performance-based incentive share plan vesting later this year

BT's share price has tripled since 2009, helped by a turnaround at its Global Services IT arm - as well as more than 30,000 job cuts.

Ian Livingston will receive 2.13m shares worth £4.8m, according to a report in The Sunday Times. Head of retail Gavin Paterson will receive shares worth £2.4m, while finance director Tony Chanmugam will pick up £2.2m, the report added.

The Sunday Times noted Livingston was also paid an annual £3.8m bonus last year, on top of his salary of £892,000 - which was bumped up to £925,000 this year.

“More than a thousand BT people, including top management, are expected to benefit from a three-year performance-based incentive share plan vesting later this year, after hitting stretching cash generation targets and out-performing other European telecoms operators in terms of shareholder return," BT said in a statement sent to PC Pro.

"BT’s cash generation has improved significantly over the past three years allowing us to reduce net debt, pay progressive dividends, invest in the future of the business and make the recently announced £2 billion payment to reduce the deficit in the BT Pension Scheme,” BT added.

BT says in its annual report that its executive salaries are below average for those in comparable companies, and that it prefers to set "stretching goals for the annual bonus and the long term incentive shares," which are only paid out for "sustained and excellent performance".

However, in 2010, BT employees in the Communication Workers Union argued against Ian Livingston's £1m annual bonus, saying it was a "blatant double standard" compared to their own pay raises.

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