BT workers prepare strike over pay as CEO nets £1m bonus

Telecoms giant BT (LON:BT.A) faces the threat of strike action today as the group is expected to confirm a bonus payment of over £1m to the CEO but only offer an under-inflation pay rise of two per cent to staff. The Communication Workers Union (CWU) is expected to announce plans to ballot the 55,000 members of staff it represents over a strike.

Kate Neilson
shareprices.com - Wednesday, May 26, 2010

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BT Group CEO Ian Livingston is expected to get a bonus of over £1m

According to reports from the BBC, an internal email has been circulated amongst managers at the group asking them to provide details of their broader skills for use in the event of disruption caused by a staff walkout.

The CWU had anticipated a pay rise increase of five per cent in-line with inflation. However, BT has only offered staff an increase of two per cent in pensionable pay with a guaranteed bonus after it employed a pay-freeze last year due to the difficult economic climate. And the row over pay could heat up if BT does announce an expected bonus payout of over £1m for the group’s Chief Executive, Ian Livingston.

Andy Kerr, CWU Deputy General Secretary said: "This is about fairness. BT staff have borne the brunt of cost savings and delivered the huge profits being enjoyed by the company this year. We have no problem with senior executives receiving bonuses but we want all staff to share the success of the company."

BT announced earlier in the month that it had returned to profit, making £1bn in the year ended 31 March. However, the group is currently battling to reduce a whopping £9bn pension deficit and has made cost-cutting savings by cutting a fifth of working staff and freezing pay last year.

BT’s share price is currently up by over one per cent just after 11:00BST, however trading is generally improving today with the FTSE 100 up over 1.5 per cent and fellow telecommunications group Vodafone (LON:VOD) also up by 1.5 per cent.

If staff were to walkout, it would be the first time it’s happened at the group since 1985.

BT big wigs may also take a few moments to glimpse through a report from researchers at Manchester Business School released today that sums up the costs of recent strikes by British Airways (LON:BAY) cabin crew. The report headlines that not only could the strikes cost the firm £1.4bn in lost sales; it will also sufficiently damage the brand image. And with fellow British-based blue-chip BP (LON:BP) also facing huge brand damages as it continues to struggle to find an answer to the oil leak in the Gulf of Mexico, which is costing the group millions every day, BT could be the third Brit-based giant facing brand issues in recent weeks.

 

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