The £3.5million cost of failure

Sacked BT chief exec stripped of lucrative share deal as a global hunt for boss begins

GAVIN Patterson will lose a £3.5m bonus after he was ousted from his job as BT chief executive.

The 50- year- old’s departure was announced by chairman Jan du Plessis yesterday following an investor revolt.

Although Patterson will keep his full pay and perks until a replacement is found, he will be stripped of a lucrative share award that was supposed to pay out this year.

This award would have given him shares worth around £3.5m if they had vested in full. Payouts for Patterson had already sparked controversy after he earned a £1m pay rise last year despite the firm’s disastrous track record.

Shareholders have grown increasingly frustrated over the past year with BT’s performance, and more poor results last month proved to be the final straw.

The decision to sack Patterson kicked off a global search for his replacement.

Du Plessis said he was ideally seeking candidates from outside the company in the telecoms and technology industries, although he did not rule out candidates from inside BT.

‘It needs to be someone who understands the industry,’ he said.

The external appointment signals a change in strategy for BT that could see it move away from spending lavish amounts on football rights and focus instead on core services.

It is understood that Du Plessis, 64, is keen for the business to focus on becoming a great infrastructure and technology firm once more.

The South African intends to find a replacement for Patterson – who will stay in job until his successor is chosen – in the next few months. Last night possible candidates included Verizon Wireless group president ronan Dunne, and olaf Swantee, the former boss of EE who sold the company to BT in 2016. Meanwhile, Marc Allera, the head of BT’s consumer division, has long been seen as a favourite, and Severn Trent boss Liv Garfield and Clive Selley, the boss of BT’s openreach cables arm, are also seen as contenders.

Patterson took over as BT’s chief executive in 2013 and has overseen a £5bn spending spree on sports television rights as part of efforts to take on rival Sky.

The decision has drawn criticism from the regulator ofcom and others who argue the company should be focusing on ploughing cash into upgrading its broadband network. Patterson’s exit was announced weeks after he unveiled a radical turnaround plan, including a decision to axe 13,000 staff.

The overhaul is part of efforts to modernise BT as it faces competition in the broadband market and focuses on offering packages that bundle internet, mobile and television services.

It is also an attempt to revive the company’s fortunes after lacklustre results, a £ 500m accounting scandal in Italy and battles with regulators over broadband pricing.

BT’s value has more than halved since 2015. In the weeks that followed Patterson’s turnaround plans, du Plessis said shareholders made clear they had lost confidence in the chief executive. He said: ‘No one questioned the strategy but what did become apparent was the results had disappointed and, frankly, support for Gavin was dwindling.’

BT shares rose just under 1pc, or 2p, to 204.95p yesterday.

After Patterson’s departure was announced, the father of four said: ‘This is a tough job. It can be a gruelling job. Five years is a typical innings of a chief executive of BT.’