BT Group PLC (LON:BT.A) has said that, following talks with shareholders after the low vote in favour of its 2018 Annual Remuneration Report, overall there was support for its remuneration policy with the vote against centred on the level of annual bonus paid to the outgoing chief executive, Gavin Patterson.
The FTSE 100-listed firm said that, despite its Remuneration Committee's use of discretion to reduce the formulaic out-turn of the bonus for the financial year ending 31 March 2018, some shareholders felt that the amount paid did not appropriately reflect the underlying performance of the company or take adequate account of the value created for shareholders.
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It added that concerns were also expressed about the timing of the decision to pay this level of bonus given the announcement on 8 June 2018 that Patterson was stepping down as BT’s chief executive.
The firm said; “On all other matters, the Remuneration Committee was pleased to hear that shareholders were supportive of BT's remuneration policy.”
BT said its board was “naturally disappointed” with the overall voting outcome of 65.84% in favour of the 2018 Annual Remuneration Report.
Adding that, following the vote, its Remuneration Committee Chairman invited a broad selection of shareholders and proxy advisory bodies to meet with him to understand their views on executive pay at BT and why some shareholders had felt unable to support the Remuneration Report.
More structured process in future
The firm said that while discretion is ultimately subjective, its Remuneration Committee will take steps to implement a more structured process to help it through its processes in the future.
It added that these will include taking into consideration a broader range of performance factors and wider circumstances when coming to a decision on pay outcomes.
BT said it remains committed to active shareholder engagement, the outcome of which will be reported in full to investors in its annual report.