BT Group chief executive to step down

Roman Schwartz
June 10, 2018

The UK group said in a statement on Friday that Gavin Patterson would leave his job later this year.

Analysts at Bernstein said it was no secret that Patterson was under enormous pressure, but added that the timing of the announcement was "highly puzzling and worrying".

Patterson received a total of 2.3 million pounds ($3.1 million) in the year to the end of March, according to the company's annual report - basic pay of 997,000 pounds plus a 1.292 million pound bonus.

'But shareholders will counter by pointing to profit warnings, an Italian accounting scandal, money wasted on share buybacks and the abandonment of a plan to consistently increase dividends.

The subsequent revelation that BT paid Patterson £2.3m previous year generated further negative PR, and at the start of June, it emerged that some BT shareholders were actively mobilising against him.

'Patterson will point to the acquisition of EE, the purchase of football rights and the creation of BT Sport, a settlement with its pension holders and extensive investment in fibre broadband networks as major strategic steps for the company, ' said AJ Bell investment director Russ Mould.

The fact that Openreach is still owned by BT and has avoided being spun-out is also a boon for the firm.

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Mr Patterson will stay in his role until that time.

Following the news of Mr Patterson's departure, BT's shares jumped 3% initially, before dropping back to trade at about 202p.

But the subsequent decline in the share price showed investors were not on side.

This culminated in the May 2018 announcement that BT is to cut 13,000 jobs on top of a previously announced 4,000, as well as shutting down its City of London headquarters and embarking on a massive shake-up of its operating model.

"I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand", he said.

Patterson, who has led BT since 2013, announced plans last month to cut 13,000 jobs as part of a restructuring created to simplify the group's management structure.

"BT is a great business and, with the new management team I've recently put in place, is, I believe, very well positioned to thrive in the future", he said.

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