BT is to overhaul the way it sets executive pay after the telecoms giant suffered a revolt over outgoing boss Gavin Patterson’s bumper £2.3 million remuneration.
The firm said that, following a rebellion in which 34% of investors rejected its remuneration report in July, it spent time engaging with shareholders.
As a result, BT’s remuneration committee will now take steps to implement a “more structured process” that will take into consideration a “broader range of performance factors and wider circumstances” when setting pay.
During the conversations, investor concern centred on the level of annual bonus paid to Mr Patterson, BT added.
Mr Patterson’s £2.3 million pay packet represented a £1 million hike in his annual pay and included a £1.3 million annual bonus, a £997,000 basic salary and £299,000 in pension payments.
It was announced in May, just weeks after BT swung the axe on 13,000 jobs.
BT said: “Some shareholders felt that the amount paid did not appropriately reflect the underlying performance of the company or take adequate account of the value created for shareholders.
“Concerns were also expressed about the timing of the decision to pay this level of bonus given the announcement on 8 June 2018 that Gavin Patterson was stepping down as chief executive.”
The AGM result saw BT placed on a public register of firms in which more than 20% of shareholders have revolted over a resolution.
It is one of a number of companies that has suffered revolts over pay this year, including Royal Mail and Unilever, leading MPs to accuse big firms of going “weak at the knees” in pay negotiations with powerful chief executives.
Mr Patterson is to be replaced in January by former Worldpay boss Philip Jansen.
Mr Patterson’s departure will end a near five-year stint as chief executive, having been at BT for a total of 14 years.