BT under pressure over bonus payments

With profits at BT plummeting it has been revealed that the boss of the division responsible for most of the company's problems received a £2m bonus last year. Francois Barrault, the head of the company's Global Services operations, whose poor performance led to the loss of 15,000 jobs and a reduced dividend, earned over £3.5m last year before being sacked in October.

And he was not the only BT employee to prosper in 2008. Former chief executive Ben Verwaayen, who played a large part in the creation of the Global Services division, pocketed a £300,000 bonus for his last three months, before leaving in the summer.

And replacement chief executive Ian Livingston accepted a £343,000 payout for the year, in spite of failing to reach any of the company's targets, bringing his total package to £1.17m.

Union leaders attacked the level of payments, which have been revealed as BT freezes employees' pay and struggles to fund its pension fund hole.

A company spokesman said of its payout to Barrault "We are disappointed at having to make the payment to François but BT honours its legal and contractual obligations." However the incident has forced it into changing its contracts to stop executives being rewarded for failure in the future.

And it is notable that the new head of Global Services, Hanif Lalani has decided not to take the bonus he was offered for his year's work.

WHAT THEY ARE SAYINGNils Pratley, the Guardian: "Barrault was also entitled to a payment equivalent to his average bonus for the previous three years. This clause was daft since it turns out that bonuses in past years should never have been paid in the first place. Global services, discovered Ian Livingston on his elevation to chief executive, was not the success story that had been advertised; it was a disaster zone where costs had grown out of control. The clean-up operation will see BT shoulder about £2bn of charges. So paying out an extra sweetener to Barrault on the basis of past illusory success is hard to swallow."

Andy Kerr, deputy general secretary of the Communications Workers Union, in the Independent: "Francois Barrault's pay-off is outrageous. He is being rewarded for failure. This gives the wrong signal to staff at a time when they are being asked to make significant changes to the way they work." ·