BT 2005 Annual Report Download - page 64

The annual salaries of the Chairman, Ben Verwaayen,
Pierre Danon and Paul Reynolds remained unchanged
during the financial years 2003/04 and 2004/05. On
1 January 2005, the annual salaries of Andy Green and
Ian Livingston increased from £425,000 to £500,000 and
£450,000 to £525,000, respectively. Hanif Lalani joined
the Board on 7 February 2005 on an annual salary of
£400,000. Following this year’s salary review, the
Committee decided that there should be no general
increase from 1 June 2005 in basic salaries.
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.
Pierre Danon’s pro rata bonus in respect of the
financial year 2004/05 until he resigned from the Board
on 28 February 2005 was based on the achievement of
corporate and line of business objectives and on the
Committee’s view on his outstanding contribution to BT.
All his executive share awards and options lapsed on his
resignation. The annual bonus of Hanif Lalani relates to
the whole year and is based solely on line of business
objectives. Ian Livingston’s annual bonus was based solely
on the achievement of corporate objectives.
Annual cash bonus awards in respect of the financial
year 2004/05, which are not pensionable, to executive
directors ranged from 38% to 64% of current salary (2004
– 58% to 123%).
Former directors
Yve Newbold retired on 31 August 2004 as a member of
the Community Support Committee for which she
received fees in the financial year 2004/05 of £2,708. She
also received fees of £2,000 as a member of BT’s Social
Policy Leadership Panel, which she left on 16 November
2004. Dr Iain Anderson retired in June 2004 as chairman
BT Scotland, for which he received fees in the financial
year 2004/05 of £3,000.
Sir Peter Bonfield received, under pre-existing
arrangements, a pension of £340,000 payable in the
financial year 2004/05 (2004 – £331,000).
Loans
Prior to the date of their appointment to the Board on
19 November 2001, Pierre Danon and Paul Reynolds each
had interest-free loans from the company to assist with
relocation of £375,000 and £300,000, respectively. At
31 March 2005, Pierre Danon owed £209,374 (2003 –
£243,750), which is repayable by 1 June 2005, and Paul
Reynolds owed £230,000 (2003 – £260,000). During the
financial year 2004/05, the maximum amount
outstanding was £503,750. 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.
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 £10,200
were payable in respect of the financial year 2004/05. 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, increased from 20% and effective on
1 January 2005. The company paid £30,600 into his
personal pension plan plus a cash payment of £126,900
representing the balance of the pension allowance for the
financial year 2004/05. 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 £20,400 into his
personal pension plan plus a cash payment of £120,225
representing the balance of the pension allowance for the
financial year 2004/05. 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 23 days of pensionable service each year to
bring his pensionable service at age 60 up to 40 years.
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.
Pierre Danon resigned as a director on 28 February
2005. His pension accrued at the rate of one-thirtieth of
his final salary for each year of service. In addition, a two-
thirds widow’s pension would have been payable on his
death. He was a member of the BT Pension Scheme, but
as he was subject to the earnings cap the company
agreed to increase his benefits to the target level by
means of a non-approved, unfunded arrangement.
Report on directors’ remuneration BT Group plc Annual Report and Form 20-F 2005 63