Verwaayen secures £1m package for rent and relocation expenses

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BT's new chief executive Ben Verwaayen, who took up his position at the firm yesterday, has secured a near £1m package to cover his relocation to the UK from the US and his housing needs.

The Dutchman, who was appointed to the top job last month, has been granted a housing allowance of £250,000 a year for the next three years. Under the terms of his contract, made public for the first time yesterday, BT will also reimburse his relocation expenses up to £200,000. Mr Verwaayen joins BT from the troubled US technology firm Lucent Technologies, where he was vice-chairman.

A spokesman for BT yesterday defended Mr Verwaayen's contract, saying it was "very much a standard package" for a senior executive relocating to a different country. He also noted that it was very much performance-related.

Under the terms of the contract, Mr Verwaayen, who is paid £700,000 a year and received a "golden hello" of £1m of shares, could net some £10m in the coming three years.

He will get an annual bonus, up to a maximum of 130 per cent of his salary, which will be matched by another bonus paid in shares while share options worth four times his salary will be issued. After investing £1m of his own money into BT, he will also gain an extra £1m of shares.