BT (LON:BT.A) have had a tough start to the year following the Italian accounting scandal. Chief executive Gavin Patterson has had his pay cut £4 million and the company has announced 4,000 job cuts.
Patterson will be paid a total of £1.34 million for the year ending in March, 74 percent less than last year’s £5.28 million.
The chief executive has said he would not have accepted this year’s bonus, even if it had still been awarded.
“I believe as chief executive you need to set an example and so I signalled to the board back in January when we announced the [extent of the] problems in Italy I felt it would be inappropriate to take a bonus if one was due,” he said in an interview.
“As a chief executive, you need to be setting an example for everyone across the business. Shareholders are disappointed in terms of what has happened in Italy in particular but they support the [overall] strategy.”
Jobs to be cut will largely be going in back-office and managerial sectors.
Tony Ball, head of BT’s remuneration committee, acknowledged in an interview the tough year BT has had with the £42 million fine given by regulators.
“The past year has been challenging,” said Ball. “Although good progress has been made in a number of areas, unfortunately, our performance has been significantly affected by the accounting irregularities in our Italian business, the issues that arose in Openreach … the significant challenges we faced in the UK public sector and international corporate markets.
“The committee has made a number of difficult decisions this year in light of these circumstances and exercised its discretion accordingly.”
BT also saw £8 billion wiped from it stock market value in one day in January as it told investors the Italian accounting scandal would cost closer to £530 million, not the £145 million it had previously guessed.
BT shares were down 1 percent in early trading.