This article is more than 2 years old

This article is more than 2 years old

BT has revealed it paid its chief executive, Gavin Patterson, £2.3m last year – only weeks after announcing 13,000 job cuts in a bid to slash costs at the embattled telecoms group.

Patterson’s pay package included a performance bonus of £1.3m in the year to the end of March, according to the group’s annual report.

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BT’s remuneration committee said Patterson had achieved an “above-target outcome” against performance measures and also agreed he should receive a 2.5% pay rise in June, taking his base salary above £1m.

The report reveals the BT chief would have been paid even more had he not volunteered to have his payout capped at the bottom end of the bonus range, meaning he gave up £363,000 he was entitled to.

“The committee welcomed and agreed the chief executive’s proposal to cap the outcome of the financial and non-financial measures at target, taking into account the underlying financial and operating performance of the business during the year,” said the remuneration committee chair, former BSkyB boss Tony Ball.

BT missed profit and revenue targets in the year to the end of March. The company’s share price fell as much as 8% on the day the annual results and job losses were announced, reflecting concern from investors at its forecast of another year of lower revenue and profits in 2018.

Overall, BT’s top management took home £21.5m in pay, bonuses and share awards last year, 23.5% more than the previous 12 months.

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BT’s 100,000 staff were told earlier this month that 13,000 roles would be cut over the next few years as part of a £1.5bn cost savings plan.

About two-thirds of the job cuts – which will come from back office and middle-management roles – will fall on its UK workforce, with the remainder coming from the staff it employs internationally.

A BT spokesman said: “This has been a challenging year for the company but good progress has been made in a number of key areas. Gavin’s total remuneration for the year was £2.3m, as a result of targets being met for customer service improvement and cash flow.”



The poor performance of the company in recent years – including the accounting scandal at its Italian operation that resulted in Patterson’s pay being cut by £4m to £1.34m in 2017 – has also meant he missed out on a further £2.3m share payout.

Almost 980,000 shares lapsed from his 2015 incentive share plan after failing by some distance to hit performance targets over a three-year period.

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In terms of cumulative revenue growth, the target was 5.79% over the three years but BT managed only 0.72%. To hit the payout target for total shareholder return the company needed to rank 12th among a group of peers over three years but it came 20th. It also needed to achieve a total of £10.3bn in free cashflow over the period but came in at £8.58bn.

In 2015-16 Patterson received total remuneration of £5.28m.

BT has also decided to trigger malus provisions to scrap £880,000 that the former finance chief Tony Chanmugam was due from its deferred bonus plan.

The company, which clawed back £193,412 from Chanmugam last year, said it had done so following “further consideration” of the Italian accounting scandal and a record £42m fine by Ofcom relating to delays to installing high-speed internet connections for rivals.