UK communications giant BT has announced that it will set its executives’ base salaries at a rate below the average paid to the competition, according to the Financial Times. The changes, which come after a string of poor performance—and in advance of an upcoming shareholder meeting—will also implement a pay freeze.
BT, which is the largest telecom company in the United Kingdom, has adjusted their pay mechanism so that executives will receive a reduction in base pay, but an increase to bonus potential, ensuring that total salaries will only be significant in the event of profitability.
“We set our exec base pay below the average for comparator companies with the potential for our execs to receive above-average pay through variable compensation in return for excellent and sustained performance,” BT said.
BT lost $2.1 billion in Q4 2008 due to failures at BT Global Services, its network and information technology arm. The head of the unit, François Barrault, who resigned in November, receiving a $2.6 million termination fee following his departure.