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BT AGM very Bland: chairman prevents war

Fat cat bonuses put to poll however

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BT's AGM in an ice rink in Nottingham turned out to be a rather bland affair. No crazed hecklers, no livid investors, just a lot of disgruntlement. And it's all due to the lumbering giant's new chairman Sir Christopher Bland. We like him more every day.

Shareholders, who have seen their shares fall by 40 per cent, came expecting a fight but they didn't get it. Sir Christopher wisely kept Sir Peter Bonfield out of the firing line; Sir Iain Vallance was also kept from view.

Instead, he took command of the meeting with his sergeant major approach, explaining that the company's problems were down to the huge £30 billion debt it had built up. Since May that has been knocked down by 37 per cent to £17.9 billion. Good times are ahead. BT is strong. The share price is not representative of its true value.

You have to hand it to the man. It is entirely true that he has slashed BT's debt in the very short time he has been at BT. And he did it by making strong, fast decisions that the board should have made a year ago. In short, he's saved the company.

BT - Sir Pete expecially - is extremely lucky Bland arrived two months before the AGM. If the meeting has been left to Bonfield and Vallance, they would have been lynched. But there's no dirt on the new chairman and so shareholders couldn't build up a head of steam.

There were flashpoints: most notably when the board tried to rubberstamp massive bonuses for the very people responsible for screwing the company up. Sir Iain Vallance, who was forced out the chairman job but allow to retain some dignity by being given a comedy posting as president emeritus, is due to receive £1.4 million. This didn't please many people.

Of course, those assembled were given the guff about it not being related to share price but to performance. We would love to see what figures they managed to find that showed Sir Iain had performed well. If share price had gone up we suspect the criteria for bonuses would be slightly different.

The argument forced a poll to be taken on the issue, but it will still go through thanks to proxy votes from institutional investors.

Protests turned to the non-executive directors, who could veto the bonuses the board pays itself. Coincidentally, two of the non-execs were up for re-election. This was also forced to a poll. Again, no one expects this to go against them, but it is a warning shot.

As for CEO Peter Bonfield, who managed to cling to his job but has lost virtually all power at board level, Sir Christopher said: "In the telecoms business you move from hero to villain pretty quickly and back again." Hardly a ringing endorsement but while Bland probably despairs of Pete's inability to fight his way out of a paper bag (organise a piss-up in a brewery), having him around as a figure of hate proves distinctly advantageous.

So, all in all, full marks for Bland. Our concern remains however that once he has sorted out BT's problems, has he the vision to push it forward? Because Bonfield hasn't. What is the strategy Christopher? How will you turn the obstructive, lumbering, monopolistic monster into a forward-thinking and essential supplier of telecommunications for the next century? That will be when you really prove your worth. ®

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