BT has appointed Philip Jansen, the co-chief executive of Worldpay, as its new chief executive in a bid to improve the fortunes of the telecoms group.
Jansen, who had been widely tipped for the job after he announced in September he was leaving Worldpay, will become an executive director at BT in the new year before formally taking over from Gavin Patterson on 1 February.
Jansen will be paid a salary of £1.1m, and an annual bonus of up to 240% of his salary, depending on performance. Every three years, when BT’s long-term incentive scheme vests, he will be in line for a maximum remuneration package of £8.3m – more than Patterson’s £7.9m maximum.
BT have given Jansen almost £900,000 in shares as a golden hello to compensate him for the loss of shares he has had to forfeit after leaving Worldpay.
In a display of commitment, the 51-year old has pledged to invest £2m of his own money into shares in the embattled telecommunications company. “BT is a special company with a wonderful history and a very exciting future,” said Jansen. “In a competitive market we will need to be absolutely focused on our customers’ needs and pursue the right technology investments to help grow the business.”
Jansen is joining at a tough time having to push through 13,000 job cuts, equivalent to more than 10% of staff, as the company seeks to cut £1.5bn in costs after a torrid 18 months that culminated in Patterson announcing his departure in June.
There is also investor concern over the multi-billion pound cost for subsidiary Openreach to build the next generation of full fibre broadband across the UK, with reports that a potential spin-off of the business could be a strategic option.
Jan du Plessis, chairman of BT, said that Jansen is “his own man” with a free mandate to change the strategic plan laid down before his arrival. However, Du Plessis said he believed the relationship between BT and Openreach should stay and that a spin-off would be disruptive to investment in next-generation broadband and mobile services.
However, he acknowledged that BT’s multi-billion pound sports broadcasting rights strategy was likely to come under scrutiny.
Big spending by BT on rights for top-flight sports – including Premier League, Champions League and European and English rugby – has helped stopped an exodus of broadband customers to rivals such as Sky.
However, it has not made BT TV a must-have with quarterly subscriber numbers going backwards, leading BT to start strike deals to be more of a partner than a rival with competitors such as Sky.
“[The sports rights strategy] has helped attract and retain broadband customers in a very competitive environment against Sky,” said Du Plessis. “It has done good things for us but there is no denying it has also been very expensive. It is something that Philip might look at. A credible content proposition is important [but] increasingly our strategy is to be a partner with content providers. We have a tremendous sense of discipline and we won’t overpay.”
Patterson will present BT’s results next week and on 31 January before handing over to Jansen. The pair are old friends, with Jansen recruiting Patterson for Procter & Gamble’s graduate scheme before taking him to the cable operator Telewest in 1999.