BT boss could ring up £2.9m

British Telecom chief executive Peter Bonfield could earn almost £3m this year after signing a new contract with the group, it emerged today.

The amount is likely to anger shareholders who had to forego a dividend and are being asked to subscribe to a record £5.9bn share issue to help BT reduce its £28bn debt mountain.

A BT spokesman said Peter would qualify for the £2.9m payment if he stayed with the group until the end of 2002 and met various performance-related targets relating to its restructuring.

Peter’s new contract, signed on May 4, states that he is entitled to receive an award in 2001 of 200% of his salary under BT’s incentive share plan, and a bonus worth £481,000 under BT’s deferred bonus plan.

He has a salary of £820,000, which means he could be looking to pocket around £2.94m.

BT’s plans to sell off its directories business Yell were last week dealt a severe blow when Trade and Industry Secretary Stephen Byers warned its Yellow Pages business would have to slash its advertising rates.

Mr Byers wants to tighten the price cap on Yellow Pages’ advertising rates to RPI minus 6% (6% lower than the rate of inflation) for four years from next January. The current price cap, in place since 1996, is RPI minus 2%.

The group is planning to sell Yell as part of its move to slash its £28bn debt by £10bn by the end of the year.

But analysts said the move would hit revenue and may in turn force BT to accept less than it hoped for Yell.

Speculation was also continuing over the future of Concert, BT’s joint venture with AT&T, which made a loss in the three months to March of £89m.

There were rumours that the two telecoms groups may launch a new global business telecoms services company incorporating Concert.

A BT spokesman said: ‘‘We have been in discussions with them AT&T for some time looking at the future of Concert. All sorts of possibilities are being considered but we have not made a decision.’’