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".

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
PROMOTED VIDEO
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Sport
Arsenal signing Calum Chambers
sportGunners complete £16m transfer of Southampton youngster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Java Developer - Banking - London - Up to £560/day

£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on