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BT announces Gavin Patterson to become ex-CEO
One more body on pile of 13,000
Hard pressed BT boss Gavin Patterson has agreed to leave the telco after five years in the role, with the group citing a "need for a change of leadership" following disappointing results and a flagging share price.
Patterson will exit later this year, with the board having already begun a search for his successor.
Last month BT confirmed huge jobs cuts of 13,000, on top of 4,000 the previous year, as well as plans to close its iconic 150-year-old headquarters in London.
Following the turnaround plan, the firm revealed Patterson was paid £2.3m last year, as well as a £1.3m bonus and a 1.5 per cent increase in his basic salary.
Despite the drastic measures, the firm has been unable to revive its flagging share price, which is still at half the value of its 2016 showing.
Shares first plunged after BT was forced to write down £530m over an Italian accounting scandal. It has also repeatedly banged heads with UK commms regulator Ofcom over its fibre plans, and faced record fines of £342m due to a failure to compensate Ethernet customers.
Jan du Plessis, chairman of BT said in a prepared remark:
"Gavin has been with BT for just over 14 years and I want to thank him for his contribution to our business during that time, in particular during the almost five years that he has served as chief executive.
"The board is fully supportive of the strategy recently set out by Gavin and his team. The broader reaction to our recent results announcement has though demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy."
In other words, BT is acting now to head off a shareholder revolt. The share price at at a six-year low.
Patterson said in a canned statement:
"It's been an honour to lead BT since 2013, and serve as a member of the Board for the last 10 years."
Under Patterson's stewardship, BT has become an increasingly consumer-focused business, with the firm splashing £12.5bn on mobile network provider EE and splurging £295m on Premier League rights for each season until 2021/22.
BT's enterprise business remains a huge drag on financial results, in particular its Global Services business, which reported a revenue fall of 9 per cent for the year to £5bn.
BT missed both its top and bottom line financial targets for fiscal '18: revenue dropped 2 per cent to £23.7bn and profit before tax rose 11 per cent to £2.6bn. The profit increase was off the back of a 19 per cent fall in profits the previous year. ®