Sir Christopher Bland yesterday agreed to stay on as chairman of BT for another four years in a move that will see him take home £2m in salary over that period and pocket a £500,000 share package.
Sir Christopher, 65, joined BT as its chairman just over two years ago on a £500,000-a-year salary and has since overseen the company's debt reduction and disposal programme.
The chairman, who was previously chairman of the BBC Board of Governors, will now stay on at BT until the company's AGM, usually held in the summer months, in 2007.
BT said Sir Christopher's salary would remain fixed at £500,000-a-year and that, like before, he will not be eligible to receive an annual bonus. Instead, he is being awarded £500,000 worth of so-called 'retention shares' which he will only receive if he is still on the company payroll at the end of his four-year stint. He will not be eligible to participate in any other executive share or share option plans.
One financial analyst, who did not want to be named, did not seem surprised that Sir Christopher had wanted to extend his contract, saying the chairman had always seemed to be thinking about the company's long term future. "Philip Hampton [BT's former finance director] was there for the short run - to fix the company's balance sheet. But Sir Christopher definitely had his sights on the longer term," the analyst said.
Sir Christopher has also made it plain himself that BT would almost certainly be his last big project and he has previously said that he doubted whether he would be there much longer than another four years.
One area Sir Christopher will undoubtedly focus on before he eventually bows out is the performance of the company's shares - something that has inflicted pain on his own finances.
Since he arrived, shares in BT have fallen from a price of around 416p to current levels of about 184p - almost halving his own investment in the business during that time.
Sir Christopher invested £1m of his own money on joining and a further £1m in February of last year when the shares were around 258p. The 673,876 shares he owns in BT are now worth around £1.2m. He also has options over 314,244 shares which vest next May but are only worth anything if BT's shares are at least 318p. He also has 318,308 'incentive' shares which vest next August.
BT revealed that Sir Christopher's new contract can be terminated by either party on 12 months' notice.Reuse content