Angry shareholders give BT board rough ride

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The Independent Online

British Telecom's private shareholders yesterday vented their anger that the company's directors had received generous pay packages at a time when BT had to implement emergency plans to cut its debt.

At the company's annual meeting in Nottingham, several shareholders questioned how the board could justify its actions. "Why should the shareholders make sacrifices and not the directors?" one asked.

About 1,300 shareholders turned up to the meeting, almost double the number BT usually sees at its AGMs.

Sir Christopher Bland, BT's newly appointed chairman, responded to the accusations by telling the AGM that director's pay packages reflected the company's operating performance, which, he said, had been "satisfactory overall". He refused to disclose how much Sir Iain Vallance, BT's former chairman, is being paid in his role as president emeritus.

BT was forced to carry out a £5.9bn rescue rights issue earlier this year after heavy spending on next generation mobile phone licences swelled its debt to around £30bn.

Not all shareholders were happy with the answers given, with one saying the BT board should be "ashamed" of both its accounts and decisions made over the past couple of years.

Speaking after the meeting, Andrew Gibson, a shareholder from Yorkshire, said he thought the directors' pay structure should be "more transparent".

The shareholders forced a vote on three resolutions at the meeting concerning remuneration and the re-election of directors, although by mid-afternoon, the remuneration resolution had been passed.

Another bone of contention was the planned demerger of BT Wireless, its mobile phone arm. Mr Matthews, a shareholder from Salisbury, urged the board to "think again". His concerns were backed up by the Communication Workers Union, which staged a protest outside the meeting venue. While Sir Christopher said he would reconsider, he urged the floor not to pin their hopes on the board favouring a different course of action.

Responding to criticisms about "foolish decisions" by the board, like the spending on 3G licences, Sir Christopher acknowledged that BT had overpaid for them but said he was "not about to blame his predecessor". He described Sir Iain as a "devoted servant of BT".

Sir Christopher defended his own appointment by saying he provided BT with both "leadership and character". He conceded, however, that humility, was not his strong point.

Urging shareholders to "keep the faith", he told the AGM: "The company is returning to health."

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