BT strike threat could be averted as Union agree terms

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The strike of 50,000 BT workers could soon be a distant nightmare or dream because the CWU has accepted a revised pay offer of 3% over three years.

I say nightmare or dream because it could have been disasterous for SMEs and BT but good for BT's competitors.

There will be another ballot of members within weeks after the last one was tripped up in the eleventh hour following legal concerns.

For a reminder of why the union was unhappy about a 2% pay offer that was previously on the table see below.

BOX: Union gripes with BT


• BT made in excess of £1bn profit last year and exceeded forecasts by doubling its free cash flow to £1.9bn while making £1.75bn in cost savings - partly delivered through a pay freeze, 30,000 redundancies and changes to pension schemes, which CWU helped the company with.

• CWU rejected BT's offer of 2% plus £250 and a possible additional £250 based on meeting undisclosed targets next year. BT has claimed that the total payments would be equivalent to a 5.4% pay rise. However, this would only be true for seven people in the company who earn a salary of just over £14,000 and the final £250 would not be paid - if at all - until June 2011.

• A pay deal of 5% for CWU grades would cost the company 3.6% of free cash flow.

• BT executives have received generous bonus payments, including:

• Ian Livingston CEO - basic £850,000 plus annual bonus of £1,206,000, total up by 79% on 2009. He is also set to get a 6% pay rise this year, but has pledged to take a 2% pay rise and donate the rest charity.

• Michael Rake, chairman, total of £670,000 up from £630,000 - a 6.3% rise - in 2009 for working part-time.

• Hanif Lalani, ex-finance director, total of £1,166,000, up from £805,000 in 2009, a rise of 44.8%.

• Patricia Hewitt, non-executive director who helps to decide remuneration - £128,000 up from £75,000 for just a few days a month.

• Gavin Patterson, BT Retail CEO, total of £1,133,000, up from £698,000 in 2009, a 62.3% increase.

•Tony Chanmugam, finance director, is set for a pay rise worth more than 7%.

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This page contains a single entry by Karl Flinders published on July 9, 2010 11:04 AM.

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