4,000 jobs go as boss is stripped of bonuses following BT scandal
BT BOSS Gavin Patterson has been stripped of his annual bonus following an accounting scandal at the firm’s Italian division, with the beleaguered company also announcing 4,000 job cuts.
The group said Mr Patterson will receive a total pay packet of £1.3m for the period, down from £5.3m the previous year.
BT’s share price and profits have been dented as a result of the scandal, first revealed in January, which also saw BT’s European head Corrado Sciolla leave the group.
The company’s remuneration committee has also decided outgoing finance chief Tony Chanmugam will not receive a bonus, with his total pay dropping to £258,000 from £2.8m.
Remuneration committee chairman Tony Ball said: “Our performance has been significantly affected by the accounting irregularities in our Italian business, the issues that arose in Openreach around deemed consent and the significant challenges we faced in the UK public sector and international corporate markets.
“The committee has made a number of difficult decisions this year in light of these circumstances and exercised its discretion accordingly.”
BT added Mr Patterson and Mr Chanmugam “understood” the committee’s decision not to award a bonus and had indicated they would not have accepted a bonus should one have been approved.
The firm said Mr Patterson will no longer receive shares worth £338,398 as a result of the scandal, with Mr Chanmugam seeing £193,412 worth of shares clawed back.
To compound matters, BT is also to axe 4,000 jobs as part of a restructuring of its Global Services unit.
The division operates in 180 countries, but BT did not say where the job cuts will fall.
The cuts will be to “back office and managerial roles” and will save BT £300m over two years.
The restructuring is aimed at “developing a more digital business, prioritising innovation on the cloud-based platforms delivering its products and services, and less dependent on owning local network”.
In a further upheaval, the unit’s chief executive Luis Alvarez will leave the group, to be replaced by Bas Burger.
The company made the announcements alongside fourth quarter results, which saw pretax profit fall 48 per cent to £440m.
Revenue came in at £6.1bn versus £5.5bn in the same period last year.
For the year to March 31, revenue was up 27 per cent to £24bn while pre-tax profit fell 19 per cent to £2.3bn.
The group’s figures were hit by a £342m Ofcom fine and related compensation payments.
A £15m charge linked to the costs of investigating the Italian accounting irregularities was also reflected in the results.
Mr Patterson said: “This has been a challenging year for BT.
“We’ve faced headwinds in the UK public sector and international corporate markets and must learn from what we found in our Italian business.
“Openreach also received a fine from Ofcom after an investigation into historical Deemed Consent practices revealed it fell short of the high standards we expect.”