BT has become the first major British employer to announce it will set the base pay of its executives below the average offered at its competitors.
The pay plans follow poor financial performance at the telecoms group and growing concern that executive pay proposals will be rejected by shareholders at its annual meeting on 15 July. In recent months, shareholders of Royal Dutch Shell and Tesco have voted against executive pay proposals for being too generous.
Under the new measures, executive directors will see their base pay reduced but the performance-related part increased, therefore still having the opportunity to earn the same amount of cash is they produce the right results.
BT has already enforced a pay freeze for it 100,000 strong workforce earlier this year as part of ongoing plans to cut costs.
A spokesperson at BT said: “It is true to say we set our exec base pay below the average for comparator companies with the potential for our execs to receive above average pay through variable compensation in return for “excellent and sustained performance.”