BT was rocked by a backlash over pay yesterday as Gavin Patterson’s reign as chief executive limped towards its sorry end.
At a downbeat annual general meeting in Edinburgh, more than a third of shareholders – or 34.2 per cent – voted against the company’s remuneration report after Patterson was given a £962,000 pay rise.
The 50-year-old father of four trousered a total of £2.3million last year, including a £1.3million bonus, taking his earnings since becoming chief executive in September 2013 to £16.5million.
In that time, BT shares have fallen around 30 per cent, wiping £10billion off the value of the company in a bruising setback to shareholders.
Patterson was heavily criticised for ploughing billions into TV sports rights while leaving customers with sluggish internet and poor service.
His tenure was also blemished by a £530million accounting scandal in Italy.
In May, Patterson unveiled a turnaround plan that included the loss of 13,000 jobs – but just a month later he was axed by new chairman Jan Du Plessis after investors made it clear they had lost confidence in him.
At yesterday’s meeting, Du Plessis, 64, tried to draw a line under the problems of recent years and set out his vision of the company’s future.
The South African repeatedly apologised to shareholders and admitted BT needed to improve. He said the company wanted customers to be able to get online at all times without interruption.
Speaking on the sidelines of the AGM, Du Plessis claimed the chief executive deserved the pay for dealing with issues such as a broadband pricing battle with Ofcom, closing its final salary pension scheme and striking a content-sharing deal with rival Sky.
He added: ‘I believe we made the right decision to pay him appropriately for what he did last year.’
Patterson is staying on while Du Plessis leads a global search to find his successor.
The chairman said he ideally wanted an outside candidate with experience in the telecoms or tech industries, although a hire from within BT has not been ruled out. He aims to find someone in the second half of the year.
Yesterday Du Plessis and Patterson also set out their vision for a more modern BT. Patterson said he still firmly believed in the decisions he had made as chief executive, which included betting big on a new sports channel to help fight off rival Sky.
But ahead of yesterday’s meeting, several shareholder advisory groups – including ISS and Pirc – urged investors to vote down the award, branding it excessive.
A spokesman for Pirc said: ‘The company’s recent poor share performance, the decision to cut 13,000 jobs … and the losses brought about by BT Italy’s accounting practices are not reflected in the chief executive’s remuneration.’