BT pay deal set for AGM scrutiny

Telecoms firm BT was under scrutiny over lucrative executive pay packages after concerns from leading shareholder bodies.

The Association of British Insurers (ABI) has slapped an "amber top" rating on the firm ahead of its annual meeting, while consultant PIRC has branded the rewards on offer "potentially excessive".

Under the package chief executive Ian Livingston could land an annual bonus of up to double his £802,000 salary, a deferred share bonus worth the same amount and incentive shares worth three times his basic pay.

But BT has posted its first loss for eight years and slashed its dividend after billions in writedowns at its troubled Global Services division, which carries out IT networking for clients such as the NHS.

An amber top rating from the ABI means that shareholders must make their own "careful consideration" before deciding whether to support the firm.

PIRC has urged investors to abstain, saying targets under the firm's share scheme were not "sufficiently challenging".

"The remuneration package is considered to be potentially excessive in light of the various schemes in operation," it added.

The boss who presided over the disastrous losses at Global Services, Francois Barrault, pocketed almost £3 million in his last year, including a £1.6 million termination payment.

Although BT was legally obliged to make the payments, shareholders are likely to express their anger at the firm's annual meeting on July 15.

BT's annual report showed no executive directors were given a pay rise this year, while bonuses were slashed because the group missed its financial targets following losses of £134 million.