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| BT hit by shareholder revolt over outgoing chief's £2.3m pay | BT hit by shareholder revolt over outgoing chief's £2.3m pay |
| (about 1 month later) | |
| BT has been hit by a significant shareholder rebellion over its outgoing chief executive Gavin Patterson’s £2.3m pay packet. | BT has been hit by a significant shareholder rebellion over its outgoing chief executive Gavin Patterson’s £2.3m pay packet. |
| At its annual meeting in Edinburgh, 34.2% of investors voted against the telecoms group’s remuneration report, including the payout to Patterson. | At its annual meeting in Edinburgh, 34.2% of investors voted against the telecoms group’s remuneration report, including the payout to Patterson. |
| Hard Brexit could force Dutch electronics firm Philips to quit UK | Hard Brexit could force Dutch electronics firm Philips to quit UK |
| The AGM result will lead to BT being placed on a public register of firms in which more than 20% of shareholders have voted against an executive pay resolution. | The AGM result will lead to BT being placed on a public register of firms in which more than 20% of shareholders have voted against an executive pay resolution. |
| Patterson’s 2017 pay package was revealed in May, only weeks after he unveiled a new strategy for the embattled company, including 13,000 job cuts in a bid to slash costs. The payout included a performance bonus of £1.3m for the year to the end of March. | Patterson’s 2017 pay package was revealed in May, only weeks after he unveiled a new strategy for the embattled company, including 13,000 job cuts in a bid to slash costs. The payout included a performance bonus of £1.3m for the year to the end of March. |
| In June, BT announced that Patterson was leaving, after a backlash from shareholders over the company’s poor performance and concerns that Patterson was not the right person to lead the company through an ambitious restructuring plan. He is due to step down later this year after a replacement is appointed. | In June, BT announced that Patterson was leaving, after a backlash from shareholders over the company’s poor performance and concerns that Patterson was not the right person to lead the company through an ambitious restructuring plan. He is due to step down later this year after a replacement is appointed. |
| Overall BT’s top management pocketed £21.5m in pay, bonuses and share awards last year, 23.5% more than the previous 12 months. | Overall BT’s top management pocketed £21.5m in pay, bonuses and share awards last year, 23.5% more than the previous 12 months. |
| BT said: “We are naturally disappointed with the lower level of support received for our remuneration report for the year ending 31 March 2018.” It added that it was mostly related to the annual bonus payment to Patterson. | BT said: “We are naturally disappointed with the lower level of support received for our remuneration report for the year ending 31 March 2018.” It added that it was mostly related to the annual bonus payment to Patterson. |
| The company said it had been been talking to its main shareholders over the past two weeks to discuss their concerns and vowed to do more to listen to investors. | The company said it had been been talking to its main shareholders over the past two weeks to discuss their concerns and vowed to do more to listen to investors. |
| BT said: “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.” | BT said: “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.” |
| Several shareholder advisory groups, including ISS and Pirc, had urged investors to oppose the payout to BT’s chief executive. | Several shareholder advisory groups, including ISS and Pirc, had urged investors to oppose the payout to BT’s chief executive. |
| Pirc said: “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.” | Pirc said: “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 is under pressure for its poor performance, including an accounting scandal at its Italian division, which led to a £530m writedown and a big fall in its share price last year. The scandal resulted in Patterson’s pay being cut by £4m to £1.34m in 2016-17. | The company is under pressure for its poor performance, including an accounting scandal at its Italian division, which led to a £530m writedown and a big fall in its share price last year. The scandal resulted in Patterson’s pay being cut by £4m to £1.34m in 2016-17. |
| There have been a number of shareholder rebellions this year at companies ranging from the drugmaker AstraZeneca to the turnaround specialist Melrose. | There have been a number of shareholder rebellions this year at companies ranging from the drugmaker AstraZeneca to the turnaround specialist Melrose. |
| Royal Mail could also face an investor revolt over executive pay at its annual meeting in Sheffield on 19 July. | Royal Mail could also face an investor revolt over executive pay at its annual meeting in Sheffield on 19 July. |
| It has been criticised by two investor advisory groups, ISS and Glass Lewis, for its decision to pay its new chief executive, Rico Back, a higher salary than his predecessor. ISS is also concerned that the outgoing CEO, Moya Greene, will leave with a payoff of more than £900,000. | It has been criticised by two investor advisory groups, ISS and Glass Lewis, for its decision to pay its new chief executive, Rico Back, a higher salary than his predecessor. ISS is also concerned that the outgoing CEO, Moya Greene, will leave with a payoff of more than £900,000. |
| In a statement, Royal Mail said: “We recognise that executive remuneration is a sensitive issue in the current economic environment. Our remuneration approach remains to recruit, retain and motivate executives of a high calibre that have the experience and expertise to lead our very large and complex company through a period of intensive change. | In a statement, Royal Mail said: “We recognise that executive remuneration is a sensitive issue in the current economic environment. Our remuneration approach remains to recruit, retain and motivate executives of a high calibre that have the experience and expertise to lead our very large and complex company through a period of intensive change. |
| “We have sought to ensure that Rico Back and Moya Greene’s overall fixed cash remuneration – their base salary, pension entitlements and benefits – are broadly the same. So Rico’s annual salary is higher than Moya’s to compensate for the halving of the cash pension allowance he would have received were this the same as the pension allowance Moya received. It is worth noting that the potential increase in Rico’s variable pay is subject to meeting stringent performance conditions.” | “We have sought to ensure that Rico Back and Moya Greene’s overall fixed cash remuneration – their base salary, pension entitlements and benefits – are broadly the same. So Rico’s annual salary is higher than Moya’s to compensate for the halving of the cash pension allowance he would have received were this the same as the pension allowance Moya received. It is worth noting that the potential increase in Rico’s variable pay is subject to meeting stringent performance conditions.” |
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| Gavin Patterson | Gavin Patterson |
| Executive pay and bonuses | Executive pay and bonuses |
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