Shareholders’ proxy advisory company Institutional Shareholder Services (ISS) has advised BT shareholders to slash the level of bonus paid to its CEO, Gavin Patterson.
ISS said in a scathing report describing the £1.3 million earned by outgoing boss Gavin Patterson (pictured, right) in the year to end-March as too high.
The ISS said in the report that “The discussion focuses on the justification…of substantial bonuses in a year where corporate performance (and share price) disappointed the market (which culminated in the departure of the CEO). While some discretion was used to reduce the amount, the CEO’s bonus of 130 per cent of salary, just shy of £1.3 million, is considered too large, in our view, for the level of performance. For this reason, a vote against the remuneration report is warranted”.
Last month Patterson appeared to play down reports he was pushed out of the company due to waning shareholder satisfaction, arguing he is leaving the operator poised for growth and is stepping aside because “now is the right time to pass on the baton“.
A strategy outlined in May will see BT cut 13,000 jobs, sell its global headquarters in central London and close a number of other offices in a bid to reduce annual costs by £1.5 billion. The company also plans to revamp its consumer and enterprise divisions.
On this, ISS said: “While cost-cutting measures are the remit of management, the payment of high bonuses against this backdrop is also noteworthy”.