Fury over BT pensions bonanza
TELECOMS giant BT is set to provoke outrage from shareholders and trades unions for funding generous pensions for ousted bosses Sir Peter Bonfield and Sir Iain Vallance.
Long-suffering investors will also be furious that the pair, formerly chief executive and chairman, are still raking in huge sums from BT in pay, fees and bonuses - even though they are no longer directors.
The two men were widely blamed for BT's decline from a flagship company to a debt-ridden disaster. On top of their pay-offs, they are in line for six-figure annual pension nest eggs costing millions to provide. The executive pension deals come in spite of the fact that BT has run up a £1.8bn deficit in its final-salary scheme for ordinary staff.
The latest annual report reveals that it will cost BT £1.8m to provide Bonfield, 57, with an £86,000 pension increase, giving him a retirement income of £321,000 a year from age 60. Bonfield, who left in January, is still on the payroll, receiving his salary of £820,000 a year. He will continue to get £70,000-a-month pay cheques until January 2003 even if he gets another job. His total pay in the year to March came to £2.4m, including a £615,000 cash bonus and £481,000 deferred share bonus.
Scots grandee Vallance is on course to make more than £1m from BT. He received a pension of £355,535, benefits of more than £30,000, plus fees of £321,000 for his honorary job as 'president emeritus'. He is in line for a £600,000 cash bonus in July.
New chief executive Ben Verwaayen, who has reduced BT's debt, earned £491,000 last year, including deferred bonuses. He is entitled to relocation expenses of £200,000, but has not drawn them because he 'has not yet found a suitable home.' He can also claim an annual 'housing allowance' of £250,000 for the next three years.
