BT chief who cut 55,000 jobs awarded £2.6m bonus

Outgoing CEO Philip Jansen headed the company in a pay dispute with employees in 2022

Former BT boss Philip Jansen has been awarded a £3.7 million pay package for the year 2023-2024, during which he announced 55,000 job cuts by 2030.

The package included a £2.6 million bonus linked to profit and cashflow targets.

Jansen, who announced his resignation from the telecommunications operator last July, has now earned £16.8 million since he joined the company in 2019 and has set the target of a 40% reduction in the company’s workforce.

Andrew Speke, director of the High Pay Centre, told HR magazine it was unacceptable to announce executive bonuses alongside job cuts.

He said: “Regardless of any other metric by which the company is performing, if it's cutting its workforce by tens of thousands of people then the leadership are failing in their duties to their employees and at the minimum should be seeing their own reward substantially curtailed.”

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Jansen was involved in a dispute with the Communication Workers Union (CWU) in 2022 over pay. During the dispute the CWU named Jansen “food bank Phil” in response to a food bank that was set up in one of BT’s call centres in North Tyneside for shift workers who did not have time to go to the shops. 

Alison Kirby, BT’s incoming CEO, announced in May 2024 that the company was a year ahead of its 2025 target to cut costs by £3 billion and said it aimed to cut a further £3 billion by 2025.

Speke commented that investing in employees, rather than rewarding executives, could help the company succeed.

He continued: “Perhaps if the company was spending less on rewarding its executives, it may actually be able to afford to retain more of its current employees. 

“While this is not a zero-sum game, it is also worth questioning how a model of paying very large sums to a small number of executives and far lower sums of money to the majority of employees may also be a cause of the company's business model failing. 

“It may well be that a company with a flatter wage structure would give all employees a greater stake in the company's success and ensure better results for the company.”

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A spokesperson for BT said: “Philip’s pay last year was not affected by the stated plan to reduce the total number of BT employees over the next seven years.

“A significant proportion of the chief executive’s remuneration is delivered through long-term incentives, where awards are linked to share price movements over the longer term.”

Virgile Raingeard, founder of compensation software Figures, told HR magazine performance-linked pay for senior leaders could have a negative impact on employees’ morale.

He said: “I’m a strong proponent of performance-linked pay, but in the era of pay transparency companies need to consider the impact that very high bonuses will have on morale; particularly for employees who may be told they will get a 1% pay increase that year or for potential candidates looking to apply to the company.”

“In terms of pure business impact, the negative impact in terms of PR, retention, hiring and the increase in corporate social responsibility, a tremendously high bonus or compensation package is a net negative.”

Raingeard suggested companies should not employ CEOs who expect sky-high compensation.

He continued: “The CEO may be an exceptional leader but you will be better off with someone who doesn’t expect that kind of compensation because the alternatives or impact will be such a net negative that in the end, it could be a terrible decision.”