London: British telecoms group BT has cancelled all pay rises and cut the majority of its bonuses following two profit warnings from the unit that provides network services to multinational companies.
BT said in its annual report the new chief executive of the troubled Global Services unit, Hanif Lalani, would not receive a bonus after he asked not to be considered for one.
But BT had to pay out £2.85 million ($4.5 million) to the former chief executive of the unit, Francois Barrault, who quit at the time of the first warning.
BT said there would be no bonuses relating to financial targets this year as all financial targets, based on free cash flow and earnings per share, were missed.
It said executive directors would, however, get some bonuses for performance in other areas.
BT said Barrault’s payment covered the period he worked during the year and his termination payment, but did not include a bonus.
Group chief executive Ian Livingston will receive a bonus of 343,000 pounds, some 20% of his maximum possible bonus, which would be two times his salary. BT said the bonus was based on non-financial elements such as improved customer service, environmental and social measures.
He will convert the bonus into shares and receive no pay rise this year, it said.
BT issued two warnings in the year to 31 March, at the Global Services unit after failing to take costs out of the business, which resulted in a number of the major contracts being less profitable or even loss making.