BT investors show the door to Patterson’s parting pay rise
We’ll send you a myFT Daily Digest email rounding up the latest Retail & Consumer industry news every morning.
BT engineers used to warn each other that the spring-loaded door on a K6 red telephone box could “fly back sharply and cause injury” on the way in. BT shareholders, by contrast, appear to have told chief executive Gavin Patterson not to let the door hit him in the arse on the way out.
Why else would 3.5 per cent of them have bothered to vote against his reappointment at Wednesday’s annual general meeting — when his departure from the telecoms group had already been announced on June 8?
A possible motivation for their parting shot was not difficult to find. It appeared further up the ballot paper: the directors’ annual remuneration report. This near telephone-directory sized document awarded Mr Patterson a £1.3m bonus and proposed a 2.5 per cent increase to his £1m basic salary — after a fall in both annual revenues and adjusted pre-tax profit, and announcing 13,000 job cuts. And at the annual meeting, more than a phone box full of people said the number being dialled had not been recognised. Some 34 per cent voted against.
It is likely Mr Patterson would have expected this. Shareholder advisory group ISS had recommended a vote against the remuneration report, because of his bonus provisions. He himself acknowledged it was “time to find a new leader”.
So, was adding this insult to spring-loaded injury perhaps unfair? To certain people, yes.
BT chairman Jan du Plessis, who declared himself “disappointed” by the shareholder vote, had initially supported Mr Patterson, on the grounds that there was no “genius” who could come in and solve all of BT’s problems: from accounting, to regulatory pressures, to staff costs. That led less-generous BT staff to agree that Mr Patterson was, indeed, no genius. But others felt he had exactly the right strategy. Acquiring EE — the UK’s largest mobile network — for £12.5bn was deemed a good deal by analysts. Cutting those 13,000 back-office and middle management jobs, saving £1.5bn in three years, investing £3.7bn annually in mobile and fibre, and hiring 6,000 new customer-focused staff is a plan that BT says its next CEO will implement.
So is BT being too hasty in showing Mr Patterson the rapidly closing door? To certain other people — who appear to hold somewhere between 3.5 and 34 per cent of BT’s shares — no.
Since Mr Patterson took over in 2013, BT’s share price has dropped by 40 per cent, to the level it stood at when Peter Bonfield was overseeing old phone boxes in 1996. It is lower than when Mr Patterson began investing up to £5bn in TV sports rights to boost consumer revenues. It is lower than when the pension deficit was £9bn as opposed to £13bn now.
None of that might have mattered, though, if Mr Patterson had not lost his connection with investors — or made more of a connection in the good times. Their unnecessary vote against him was not unlike a K6 phone box today: out of order, but to be expected.
Stobart: rigging or web?
Are signs of order returning to the governance of Stobart, the trucking-turned-airport business? Chairman Iain Ferguson might have seen off attempts by Andrew Tinkler, Stobart’s co-founder and former director, to unseat him — but do not bet on it, writes Kate Burgess.
Sure, Mr Tinkler has dropped demands for a vote next week to appoint Philip Day, the Dubai-based billionaire, as chairman. And Mr Day has withdrawn his name from the ballot. Perhaps he is allowing the board to run an orderly search for a successor now that Mr Ferguson has said he and a fellow director will not stand for re-election next year. M&G fund managers, and others, who are wooing industry hotshot Allan Leighton to take the top seat can hope. However, Mr Tinkler has about him something of Loki, the shape-shifting Norse god of mischief and an expert weaver of tangled webs.
Mr Tinkler claims that Mr Ferguson’s re-election was “rigged” and the vote was “gerrymandered”. The irrepressible Mr Tinkler looks like he is angling for a recount.
Burberry’s new model
According to Fashionista.com, Burberry’s creative director Riccardo Tisci is to “adopt the drop model . . . starting with a limited-edition capsule collection tied to his runway debut”. Now, as one of the journalists whose apparel necessitated the frosted glass screen that still shields FT How To Spend It staff from sights more Didcot Parkway than runway, Lombard was not sure what “drop model” referred to. Burberry’s shares? Apparently, not. It means switching from “See Now, Buy Now”, whereby a new collection goes straight into stores, to frequent product “drops” whereby items arrive in stores at different times. But it may take time to have an effect on shares that already trade on 25 times 2019 earnings. Or, indeed, on customer behaviour. It might be best if that screen stays up.
Get alerts on Retail & Consumer industry when a new story is published