BT 2006 Annual Report Download - page 60

The annual salaries of the Chairman, Ben Verwaayen, Andy
Green, Ian Livingston and Hanif Lalani remained unchanged
during the financial year 2005/06. On 1 August 2005, the
annual salary of Paul Reynolds was increased from £400,000 to
£450,000. Following this year’s salary review, the Committee
decided that there should be no general increase from 1 June
2006 in basic salaries, save that Ben Verwaayen’s annual salary
will be increased from £700,000 to £750,000 and Hanif
Lalani’s annual salary will be increased from £400,000 to
£460,000, both on 1 June 2006.
A special retention arrangement was established for Hanif
Lalani on 1 July 2004, when he was CFO, BT Wholesale, under
which he will receive a lump sum cash payment of £150,000 on
30 June 2006, provided he is still an employee of the company
on that date. The award will be forfeited without compensation
if Mr Lalani resigns or his employment is terminated by the
company with cause before that date.
Annual cash bonus awards in respect of the financial year
2005/06, which are not pensionable, to executive directors
ranged from 80% to 112% of current salary (2005 – 38%
to 64%).
Former directors
Sir Peter Bonfield received, under pre-existing arrangements, a
pension of £352,153 payable in the financial year 2005/06
(2004/05 – £340,000).
Loans
Prior to the date of his appointment to the Board on
19 November 2001, Paul Reynolds had an interest-free loan of
£300,000 from the company to assist with relocation. At
31 March 2006, he owed £200,000 (2005 – £230,000). During
the financial year 2005/06, the maximum amount outstanding
was £230,000. There are no outstanding loans granted by any
member of the BT group to any other of the directors or
guarantees provided by any member of the BT group for their
benefit. The outstanding amount of a loan of £209,374 granted
to a former director, Pierre Danon, was repaid during the year.
Pensions
Sir Christopher Bland is not a member of any of the company
pension schemes, but the company matches his contributions,
up to 10% of the earnings cap, to a personal pension plan.
Company contributions of £10,560 were payable in respect of
the financial year 2005/06. The earnings cap is a restriction on
the amount of pay which can be used to calculate contributions
and benefits due to a tax approved pension scheme.
Ben Verwaayen is not a member of any of the company
pension schemes, but the company has agreed to pay an annual
amount equal to 30% of his salary towards pension provision.
The company paid £31,680 into his personal pension plan, the
maximum permitted by HMRC, plus a cash payment of
£178,320 representing the balance of the pension allowance for
the financial year 2005/06. BT also provides him with a lump
sum death in service benefit of four times his salary.
Ian Livingston is not a member of any of the company
pension schemes, but the company has agreed to pay an annual
amount equal to 30% of his salary towards pension provision.
The company paid £21,120 into his personal pension plan, the
maximum permitted by HMRC, plus a cash payment of
£136,380 representing the balance of the pension allowance for
the financial year 2005/06. BT also provides him with a lump
sum death in service benefit of four times his salary.
Andy Green is a member of the BT Pension Scheme. From
31 December 1997 the company has been purchasing an
additional 203 days of pensionable service each year to bring
his pensionable service at age 60 up to 40 years. A two-thirds
widow’s pension would be payable on his death.
Hanif Lalani is a member of the BT Pension Scheme. From
7 February 2005, the company has been purchasing an
additional 27 days of pensionable service each year to bring his
pensionable service at age 60 up to 40 years. A two-thirds
widow’s pension would be payable on his death. He chose to
opt out of future accrual of pensionable service from 1 April
2006 and, in its place, to receive a cash allowance of 30% of
salary.
Paul Reynolds is a member of the BT Pension Scheme. From
1 July 1996 the company has been purchasing an additional
109 days of pensionable service each year to bring his
pensionable service at age 60 up to 40 years. A two-thirds
widow’s pension would be payable on his death. He chose to
opt out of future accrual of pensionable service from 1 April
2006 and, in its place, to receive a cash allowance of 30% of
salary.
The table below shows the increase in the accrued benefits, including those referred to above, to which each director, who is a
member of the BT Pension Scheme, has become entitled during the year and the transfer value of the increase in accrued benefits:
Accrued pension
Transfer value of accrued
benefits
Change in
transfer value
c-d less
directors’
contributions
Additional
accrued
benefits
earned in the
year
Transfer value
of increase in
accrued
benefits less
directors’
contributions
2006 2005 2006 2005 2006 2006 2006
£000
a
£000
b
£000
c
£000
d
£000 £000
e
£000
f
A Green 157 131 2,448 1,848 570 23 331
H Lalani
h
112 73 1,144 668 452 38 362
Dr. P Reynolds 140 123 1,995 1,578 391 14 178
a-d As required by the Companies Act 1985 Schedule 7A.
a-b These amounts represent the deferred pension to which the directors would have been entitled had they left the company on 31 March 2006 and 2005, respectively.
cTransfer value of the deferred pension in column (a) as at 31 March 2006 calculated on the basis of actuarial advice in accordance with Actuarial Guidance Note GN11. The transfer value represents
a liability of the BT Pension Scheme rather than any remuneration due to the individual and cannot be meaningfully aggregated with annual remuneration, as it is not money the individual is
entitled to receive.
dThe equivalent transfer value but calculated as at 31 March 2005 on the assumption that the director left service at that date.
eThe increase in pension built up during the year, net of inflation. The gross amount can be calculated by deducting the amount under column (b) from the amount under column (a).
fThe transfer value of the pension in column (e), less directors’ contributions.
gDirectors’ contributions in the financial year 2005/06 were as follows: Andy Green, £30,000.
(2005 – £26,625); Hanif Lalani £24,000 (2005 – £16,300) and Paul Reynolds, £26,000 (2005 – £24,000).
hHanif Lalani joined the Board on 7 February 2005.
BT Group plc Annual Report and Form 20-F 2006 Report on directors’ remuneration58