BT's CEO Receives £150,000 Bonus Amid Surprise Profit from MCI Stake Sale

Strategic Insights -

British Telecom's Chief Executive, Sir Peter Bonfield, received a £150,000 bonus tied to the sale of the company's stake in American telecoms group MCI, despite losing the bid for control of the firm. The bonus was part of a £1.38m pay package awarded to Sir Peter for the year to March 31, up from a previous £938,000. BT benefited from £4.3bn from its 20% stake in MCI after rival suitor WorldCom won the battle for the group in 1997, realizing a £1.1bn profit on the investment, which boosted group profits to £4.3bn in 1998.

Key Takeaways:

  • Sir Peter Bonfield, BT's CEO, received a £150,000 bonus tied to the sale of the company's stake in MCI.
  • The bonus was part of a £1.38m pay package awarded to Sir Peter for the year to March 31.
  • BT benefited from £4.3bn from its 20% stake in MCI after rival suitor WorldCom won the battle for the group in 1997.
  • Despite losing the bid for control of MCI, BT realized a £1.1bn profit on the investment, which boosted group profits to £4.3bn in 1998.
  • BT's European investments reached £4bn in revenue last year, with its own share running at £1.2bn - a 200% increase on the previous year.
  • Associated losses in Europe were below expectations at £287m.
  • Finance director Robert Brace forecast that BT's existing joint ventures would have 9% of the £145bn European telecoms market by 2002/3.
  • Sir Peter was allotted £1.15m in shares to be deferred until 2002.

Statistics:

  • £1.38m: Sir Peter Bonfield's pay package for the year to March 31.
  • £150,000: Bonus received by Sir Peter Bonfield tied to the sale of the MCI stake.
  • £4.3bn: Value of BT's 20% stake in MCI sold after WorldCom won the battle for the group in 1997.
  • £1.1bn: Profit realized by BT on the sale of its MCI stake.
  • £1.38bn: Total revenue from European investments.
  • £1.2bn: BT's own share of revenue from European investments.
  • 200%: Increase in BT's own share of revenue from European investments compared to the previous year.
  • £287m: Associated losses in Europe.
  • £145bn: European telecoms market.
  • 9%: Forecasted market share of BT's existing joint ventures by 2002/3.

Sources:

  • British Telecom's annual report, 1998.