A £1.3m prize for a plunging share price at BT? Not so fast... It doesn’t look to be smooth sailing for British Telecom’s outgoing boss, Gavin Patterson, as a recommendation to reject his bonus has arrived in time for the next shareholder meeting. Leading proxy voting and policy advisor Institutional Shareholder Services (ISS) reckons that Patterson's near £1.3m bonus (a whopping 130 per …
Nice to see some dissent for a change. But I bet he'll still get a whopping amount of go-away-cash as a 'Reward-for-Failure'... Doesn't it seem like this game is always rigged against the workers / customers in favor of elites! Its African prince plunders his country's natural resources - first-world-corruption!
It seems likely that performance will take a further hit once the news of further price increases for customers arrives. I'll be saying goodbye to Infinity after using it's service from the time it was first available to me.
They also need to knock off the cash guzzling sports and mobile phone stuff.
“BT’s Remuneration Committee always seeks to ensure that pay is aligned with performance. It is firmly of the view that decisions taken this year around pay are fair and appropriate."
MRDA, or Mandy Rice Davies Applies: When James Burge, the defence counsel, pointed out that Lord Astor denied an affair or having even met her, Mandy Rice Davies dismissed the denial by stating, "Well he would say that, wouldn't he?"
Good that his bonus is being questioned. My rental goes up almost twice a year and the idea of a mobile only house becomes be appeaing. I'm looking to move to Zens FTTP and hopefully get away from BT billing for good. The business line is on VoIP and already thats halved the rental.
The issue with BT is that they are pricing themselves out of the market, same as postage stamps. I probabbly send maybe 10 letters a year now whereas it was anything up to 30 a month (invoices).
Plus I have no interest in sport, but I bet i'm subidising BTSports TV rights.
I'm beginning to wonder what you would have to do now as a CEO of a big corporation to not get your bonus?
Here's a few ideas:
- Wipe out a species of African Rhino?
- Drive your Ferrari into a busload of school children whilst getting a handjob from a prostitute?
- Murder a popular member of the Royal Family (Charles doesnt count)?
- Be pictured hugging Donald Trump?
Ahhh, who am I kidding, none of those would have even the slightest effect on CEO Bonuses... Well maybe the Trump one...
They often remind me of the UK union leaders having control of large block votes when dealing with the Labour Party and its leaders. Maybe that's in the past.
Buying a share can be seen as buying a vote: what the expected ROI is open to question.
They didn't do well with Carillion.
I won't be doing the job to the best of my ability unless you put 200% bonuses on the table.
Sadly, and speaking with much experience of the matter, the levels of bonus increase exponentially with grade, to the point that this utterly bizarre "over-achievement" level is now commonplace for the highest grades. The game is played by ensuing that the maximum amount of bonus is allocated to other people's performance such as "European group wide EBITDA", corporate shite like H&S or "diversity & inclusion", and diverting the balance in favour of personal measures you know are already in the bag.
How do I know? As an Executive Henchman, I've played this game for the bonus beneficiary, a number of times. For the likes of you and I, the same rules don't apply.
Back in the day, big company bosses got huge salaries.
That was killed through taxation, so they all turned to ridiculous expense accounts. They would use them to buy posh cars and property and build retirement homes and pay their kids' private school fees, no questions asked.
That was made illegal, so they all got posh company cars and huge pensions and share deals. Share options were a way you could buy say a million shares at issue price even though their value had upped a hundredfold.
When that came under the banhammer (I forget exactly how), next came huge bonuses.
Now we are clamping down on those, where will the bosses turn next? Ginormous loan schemes with retirement payoff? Corporate land grabs with peppercorn rent? One thing we do know for sure -- they'll find something.
Oink! Oink!
A couple of psychologists did research into bank investment bonuses. They found small performance bonuses (compared to salary) improved work, but large bonuses only encouraged the worker to work for the bonus (usually by being less ethical or careful). When presented with this research, bank bosses were fascinated and agreed with the findings. The researchers then pointed out that the bosses were in the same group of over-bonused workers. The big-wigs decided they were quite trustworthy and the bonuses had no effect on their behaviour... Since that study, this article suggests that virtually all bonus effects are negative ones...
https://www.psychologytoday.com/au/blog/the-homework-myth/201609/the-bonus-effect
down 25 per cent - so giving the former CEO a wheelbarrow of cash to push through the door on his way out stuck in the craw somewhat.
But, but,but.... Think about how much the share value would have dropped if the CEO had not had a fat bonus to look forward to?
Seriously though: I have long wondered how much of a role a CEO plays in any organization. If a well-paid CEO was all it took to become a success on the stock exchange, then surely everybody would be doing it? (I suspect most companies are doing this and that the positive effect is randomly distributed)
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The point is, it’s his responsibility for national infrastructure that’s been run into the ground one way or another.
This costs the entire country, not just the shareholders and front-liners.
Long before my time, though I’ve seen the old stuff, it used to miles ahead and something to be proud of. Now it’s just cut and run whilst looting the till.
The front door’s wide open, the floors not been mopped and bins haven’t been taken out. Now he’s back for the tips.
It’s the reason moats and gang planks were invented. Cliff’s in Nero’s case! #wooosplash (itsacaseofpostlooping);
Couldn't happen to a more useless bloke... Patterson was always obsessed with the idea of BT as purely a Content / Consumer company and fixated by competing with Sky, his office walls lined with sports posters etc. Visibly bored by anything relating to infrastructure or technology, he's pretty much destroyed the engineering-led core which made the "old" BT quite a decent, interesting company - albeit horribly overstaffed and too arrogant by half.
That said, the board knew what they were getting when they appointed him, and given that CEO selection is the primary way that a board can have much impact on a company today they're at least as culpable as him for the current BT fustercluck...
For those with long memories, brings to mind David Young's destruction of Cable & Wireless and George Simpson's even more dramatic wrecking of GEC Marconi - all proof that a CEO (or hands-on Chairman) with a mission to change a stable firm's core business into something more frothy and "sexy" can do a massive amount of damage in a very short time!
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