Fury at BT as Barrault gets £1.6m golden handshake

Pay rises cancelled this year for employees with staff still reeling after 15,000 job cuts announced

BT executives will not receive bonuses this year for financial performance after missing all its targets, but the group revealed that the executive who oversaw the division that pulled the business into a full-year loss received a £1.6m pay-off after he quit.

The UK telecommunications giant yesterday published its annual report for the year until the end of March. The document revealed that it had cancelled all pay rises, and that most of the bonuses had been cut as well.

It said: "There are no pay rises this year resulting from the annual pay review. This applies to all BT staff including executive directors. A previously announced pay rise for executive directors, as agreed and announced last year, has also been shelved."

While some directors will receive bonuses for customer service performance as well as environmental and social targets, no bonuses will be paid for the telecoms group's dismal financial performance. "All financial targets, based on free cash-flow and earnings per share were missed," it said.

BT said in the report that it is to pay François Barrault £2.8m after he resigned in October last year following the first of several profit warnings at the group's Global Services division. Mr Barrault's termination payment totalled £1.6m, which was equivalent to a full-year's salary and benefits.

BT announced earlier this month that it had swung to a loss of £134m in the 12 months to the end of March, after a profit of £1.9bn the previous year.

The losses were brought on by problems at BT Global Services, the division that provides and operates technology services for multinational corporations. It was forced to write down £1.6bn after reviewing all its contracts, and added that restructuring the division would cost close to £700m over three years.

BT said yesterday it had no choice but to pay Mr Barrault the full £2.8m. The sum covered his salary for the year as well as the termination payment, but did not include a bonus. A spokesman for the group said: "We are disappointed to make the payment to François but BT honours its legal and contractual obligations."

The Communications Workers Union was furious at the decision to pay Mr Barrault. Its deputy general secretary Andy Kerr said: "François Barrault's pay-off is outrageous. He is being rewarded for failure. This gives the wrong signal to staff at a time when they are being asked to make significant changes to the way they work."

BT staff are still reeling after hearing that 15,000 jobs would be cut from the group this year. This follows 15,000 cut last year, although the majority of those were outside contract workers.

Its chief executive Ian Livingston will receive a bonus of £343,000, a fifth of the potential payment he would have received if the group had hit targets. He plans to convert the bonus into BT shares and will not receive a pay rise this year. Mr Livingston apologised to shareholders at the annual results, saying it has been a "difficult year".

Hanif Lalani, the former chief financial officer, who took over as chief executive of Global Services, asked not to be considered for a bonus.

The report added: "Plans, announced last year, to increase the target and maximum level of future executive director bonus payments have been shelved." It added some discretionary payments will be made to some staff below board level. BT has this year changed the rules governing its executive share plan, which will allow it to reclaim unvested awards. This clawback will be used "if it becomes apparent that there was a misjudgement on which the award was made".

Start your day with The Independent, sign up for daily news emails
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
Arts and Entertainment
The Palace of Westminster is falling down, according to John Bercow
voices..says Matthew Norman
Steve Bruce and Gus Poyet clash
Graham Norton said Irish broadcaster RTE’s decision to settle was ‘moronic’
Arts and Entertainment
Jake and Dinos Chapman were motivated by revenge to make 'Bring me the Head of Franco Toselli! '
arts + ents Shapero Modern Gallery to show explicit Chapman Brothers film
Arts and Entertainment
Kurt Cobain performing for 'MTV Unplugged' in New York, shortly before his death
music Brett Morgen's 'Cobain: Montage of Heck' debunks many of the myths
ebooksA special investigation by Andy McSmith
Life and Style
Brendan Rodgers
football The Liverpool manager will be the first option after Pep Guardiola
Amazon misled consumers about subscription fees, the ASA has ruled
Arts and Entertainment
Myanna Buring, Julian Rhind-Tutt and Russell Tovey in 'Banished'
TV Jimmy McGovern tackles 18th-century crime and punishment
Arts and Entertainment
Paul Whitehouse as Herbert
arts + ents
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn