BT faces attacks for fat cattery

BT could face a shareholders revolt over fat cat bonuses at its AGM this month as lobby group Pirc advises its customers to vote against the company's remuneration report.

Pensions Investment Reward Consultants (Pirc) has told its institutional and pension fund clients that BT's incentive schemes are "insufficiently challenging" and while BT has frozen executive pay for three years, Pirc has attacked the packages as "potentially excessive".

A Pirc spokesman said: "We put out reports before the AGMs of 650 to 700 major companies. We have issued a report to our clients recommending that they oppose the remuneration report."

What particularly galls Pirc is the retention share plan, which grants free shares without attaching any particular targets. The scheme's aim is to tie key executives to the company.

But BT took the criticisms as a matter of course and a spokesman rattled off a series of BT achievements this year, including increasing the dividend, lowering debt, obtaining good results and cutting customer dissatisfaction by 22 per cent.

He said: "Our remuneration policy has been published for some years now and our shareholders and major investors have copies. We note that Pirc did not reply to our invitation earlier to comment on its provisions."

He also claimed BT has been at the forefront of good corporate governance for some years.

The Pirc spokesman said the group had issued its report and now it is up to the clients to decide what to do at the AGM. He said he had no data on whether or not his clients followed the advice they have paid for.