BT 2009 Annual Report Download - page 67

ADDITIONAL INFORMATION FINANCIAL STATEMENTS REPORT OF THE DIRECTORS BUSINESS AND FINANCIAL REVIEWS OVERVIEW
REPORT OF THE DIRECTORS
65BT GROUP PLC ANNUAL REPORT & FORM 20-F
REPORT OF THE DIRECTORS REPORT ON DIRECTORS’ REMUNERATION
During the financial year 2008/09, Ben Verwaayen’s annual salary
remained at £800,000, Hanif Lalani’s annual salary was increased
from £520,000 to £585,000, Ian Livingston’s annual salary was
increased from £560,000 to £850,000 upon his appointment as
Chief Executive and François Barrault’s annual management fee was
increased from €750,000 (approximately £528,170) to €850,000
(approximately £654,000). All increases were effective from 1 June
2008. On appointment Gavin Patterson’s annual salary was
£500,000 and Tony Chanmugam’s annual salary was £475,000.
None of the directors’ salaries will be increased in 2009/10.
Annual cash bonus awards to executive directors (which will be
used immediately after payment to purchase BT shares) in respect
of the financial year 2008/09, which are not pensionable, ranged
from 0% to 40% of current salary (2007/08 – 72% to 96%). The
aggregate of the cash bonuses for 2008/09 represents less than
one third of the cash bonuses paid to directors in the same
positions in the previous year.
Former directors
Sir Peter Bonfield received, under pre-existing arrangements, a
pension of £390,766 payable in the financial year 2008/09
(2007/08 – £375,736).
Baroness Jay retired as a non-executive director on 13 January
2008 but continues as a member of the
Committee for Responsible
and Sustainable Business
, for which she receives an annual fee of
£6,500.
Loans
There are no outstanding loans granted by any member of the BT
Group to any of the directors or guarantees provided by any
member of the BT Group for their benefit.
Pensions
Sir Michael Rake is not a member of any of the company pension
schemes and the company made no payments towards retirement
provision. BT provides him with a lump sum death in service benefit
of £1m.
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 £235,000 into his personal pension plan, plus a cash payment
of £5,600 representing the balance of the pension allowance for
the financial year 2008/09. BT also provided him with a lump sum
death in service benefit of four times his salary.
Hanif Lalani is a member of the BTPS but has opted out of future
pensionable service accrual. A two-thirds widow’s pension would
be payable on his death. The company has agreed to pay an annual
amount equal to 30% of his salary towards pension provision. A
cash payment of £172,000 was therefore made for the financial
year 2008/09.
Tony Chanmugam is a member of the BTPS.
Gavin Patterson is a member of the BTRP. The company has
agreed to pay an annual amount equal to 30% of his salary towards
pension provision. The company paid £40,000 into the BTRP, plus a
cash payment of £85,000, representing the balance of the pension
allowance for the financial year 2008/09. BT also provides him with
a lump sum death in service benefit of four times his 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 BTPS, has become entitled to during the year and
the transfer value of the increase in accrued benefits.
Ben Verwaayen was not a member of any of the company
pension schemes, but the company had agreed to pay an annual
amount equal to 30% of his salary towards pension provision. The
company paid £8,820 into his personal pension plan, plus a cash
payment of £51,180 representing the balance of the pension
allowance for the financial year 2008/09. BT also provided him
with a lump sum death in service benefit of four times his salary.
François Barrault was not a member of any of the company
pension schemes, but the company agreed to pay an annual
amount equal to 30% of his annual management fee towards
pension provision. A cash payment of €165,000 (£131,520) was
therefore made in the financial year 2008/09. BT also provided him
with a lump sum death in service benefit of four times his salary.
Increases in pension benefits at 31 March 2009 Transfer
value of
increase
Change in accrued
in transfer Additional benefits in
value c-d accrued benefits e less
less directors’ earned in directors’
Accrued pension Transfer value of accrued benefits contributions the year contributions
2009 2008 2009 2008 2009 2009 2009
£000a£000b£000c£000d£000 £000e£000f
T Chanmugamg,h 140 112 2,419 1,754 655 28 475
H Lalanig161 143 1,742 1,775 (33) 18 195
A Greeng,i – 179 – 3,407 – – –
P Reynoldsg,i – 147 – 2,410 – – –
a-d As required by the Companies Act 1985 Schedule 7A.
a-b The values for Hanif Lalani represent the deferred pension to which he would have been entitled had he left the company on 31 March 2009 and 2008, respectively. For Tony Chanmugam, the amounts
represent the deferred pension at 1 December 2008 and 31 March 2009. For Andy Green and Paul Reynolds, the amounts represent the deferred pension at 31 March 2008 if they had left the company on
that date.
cTransfer value of the deferred pension in column (a) as at 31 March 2009 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 2008 on the assumption that the director left service at that date or the actual leaving service date, as appropriate.
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 2008/09 were as follows: Hanif Lalani £nil (2008: £nil); Andy Green, £nil (2008: £23,200); Tony Chanmugam, £9,500 (2008: £–) and Paul Reynolds £nil (2008:
£nil).
hTony Chanmugam was appointed as a director on 1 December 2008.
iPaul Reynolds resigned as a director on 14 September 2007 and Andy Green left the company on 31 December 2007.