BT chief's bonus of £1.5m for taking firm to the
 brink

 By Michael Harrison, Business Editor

 11 May 2001

 Sir Peter Bonfield, the chief
 executive of British
 Telecom, stands to collect a
 bonus of £1.5m if he pulls off
 the biggest corporate rescue
 Britain has ever seen.

 Details of the huge
 incentive package offered to
 the embattled BT boss
 emerged yesterday as the
 debt-laden group unveiled
 plans to raise £6bn from
 shareholders and spin off its
 mobile phone business to
 stave off financial crisis.

 BT is also scrapping
 dividend payments to its
 army of 1.7 million small
 investors, many of whom have held their shares
 since privatisation in 1984.

 Sir Peter will be eligible for a bonus equivalent to
 1.75 times his basic salary when his contract ends in
 December, 2002 provided he has completed the
 restructuring successfully. His base salary was
 increased to £820,000 from April.

 The record-breaking £6bn rights issue is among a
 package of measures designed to slice £15bn from
 BT's £29bn debt mountain. Other measures include
 the demerging of BT Wireless, which includes
 Britain's number two mobile operator, BT Cellnet,
 by the end of year, the sale of BT's Yell directories
 business, and a further 5,000 job losses from the
 131,000-strong workforce.