'They've just replaced one Sir Idiot with another'
The City, media and investors unimpressed by BT top-job change
The City, media and everyday investors are not impressed with the announcement yesterday that Sir Iain Vallance was to step down as BT chairman and be replaced with current BBC governor Sir Christopher Bland.
One Internet poster appeared to capture the mood when he said "they have just replaced one Sir Idiot with another".
BT's share price fell 5.5 per cent on the news yesterday, wiping £2 billion off the company's value. It has continued to fall today and currently stands at 534p, down 3 per cent on yesterday - another £1 billion lopped off.
Media reports are nearly all hostile: "Bonfield faces the storm alone", "The £1m failure", "Can Bland of the BBC rescue BT?" and the consistently bland Independent goes with "BBC chairman Bland to succeed Vallance in the UK".
As you would expect there is heavy speculation, but these are the things that everyone agrees upon:
- Vallance was right to go
- BT will soon embark on some fund-raising to help cut its £30 billion debt
- Bland is a no-nonsense leader
- Bland has taken on one hell of a challenge
- Bonfield's position still looks shaky as the last one of the old BT triumvirate
Add to this the political whirlwind revolving around Bland's current position as BBC chairman - tied in, of course, to party politics because national journalists refuse to accept that anything happens without their chums in Parliament having something to do with it.
The fact remains that by behaving like the arrogant monopolist of old, failing to seize the potential of the Internet, being too slow and cumbersome to tackle the mobile market as effectively as others, angering huge sectors of business by foot-dragging and trying to buy their way out of trouble, the BT top three made the unpardonable sin of causing share price to fall. Significantly.
Sir Iain has seen shares fall from £15.03 to today's £5.34 during his chairmanship, but will still get a £600,000 pay-off with £333,000 pension plus his share options (worth £157,000) and will retain the "president emeritus" title until July next year.
Finance director Robert Brace has paid the price for failing to deal with mounting debt, now Vallance has paid the price for not steering the BT supertanker away from the rocks early enough. Will Bonfield see his lack of foresight and vision rewarded in the same way? ®