Implications of the BT Undertakings on Reward in Openreach and BT Wholesale Core Network Services
In the Undertakings, BT agreed to a number of changes to the structure of the remuneration package for people in Openreach and for those people in BT Wholesale Core Network Services (CNS).
The new arrangements are outlined below:
Annual Cash Bonus – It was agreed that there be no change to the annual bonus opportunity or to the methodology of linking payments to an annual scorecard. However, scorecard measures and targets for Openreach and BT Wholesale Core Network Services (CNS) people will be linked only to Openreach (or CNS) rather than to BT Group.
Deferred Bonus Plan – It was agreed that individuals nominated for the deferred bonus plan receive a deferred cash award (rather than BT shares) of up to 75% of their annual bonus award, paid after 3 years subject only to continued employment.
Incentive Share Plan (ISP) – It was agreed that the Incentive Share Plan is replaced with a cash based incentive (rather than BT shares). Awards would need to be held for three years, and would vest subject to continued employment and achievement of performance targets.
Replacement of Outstanding BT-Based Share/Option Awards – Individuals who have transferred to Openreach or BT Wholesale Core Network Services (as covered by the BT Undertakings) will be offered the opportunity to take a deferred cash replacement for their current BT-based equity awards. The value of the cash replacement will be based on the BT share price on the date of the offer and, for performance-vesting awards, the extent to which vesting has already been achieved. Replacement awards will vest at the same time as the original BT-based equity award.