BT's Bonfield stands down

Bonfield: pay-off of more than $2 million

LONDON, England -- The Chief Executive of British Telecommunications, Sir Peter Bonfield, is to stand down from the end of January.

A statement from the company said he had "agreed with the board of BT" that he will leave the company at the end of January 2002 -- a year early.

His departure had been expected after the demerger of BT's mobile unit, mmO2.

He is to receive a pay-off worth more than $2 million.

Thanking his staff for "six action-packed years" Bonfield, who joined in 1996, said the company had had "its successes and our share of disappointments."

He added: "But we have seen some amazing changes in our industry and completed significant changes in BT."

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Recently under Bonfield, Yell, the directories business, was sold for more than £2 billion and £4.8 billion of assets went in Japan and Spain as the company moved to reduce its spiralling debt burden.

BT racked up debts of £30 billion largely from buying third-generation, or high-speed, mobile phone network licences.

The group paid £5.1 billion to acquire a permit in Germany and about £4.5 billion in the UK. The company also spent another $6 billion on increasing its stake in German mobile phone operator Viag Interkom to 90 percent.

When in April long-term BT chairman Iain Vallance was replaced by BBC chairman Sir Chrisopher Bland, its shares had halved in a year.

Other measures taken by Bonfield to correct the slide were the demerger of mmO2, to take place later this month and the restructuring of the group with a slimmed down HQ and autonomous lines of business.

Sir Peter said: "This is the right time to announce a change. We have almost completed the very radical transformation programme which we started last year.

"A string of profitable and timely disposals, coupled with a successful rights issue, have helped us to reduce debt ahead of schedule.

"We have established the new BT Group which will have a slim headquarters and autonomous lines of business. mmO2 will be demerged shortly. The new BT Group is well positioned for the future.

"I plan to stay involved in the technology-related business but with a broader portfolio of international interests."

Sir Christopher Bland, Chairman of BT, said: "Peter's contribution to BT has been enormous during his six years as its CEO.

"I am particularly grateful for the help he has given me personally, and for the energetic and effective way in which he has implemented the major programme of change during the six months I have worked with him.

"We have begun to look for a successor to Sir Peter and this appointment will be announced in due course."

The company said Bonfield was is entitled to one year's notice under the terms of his contract, like other members of the BT Executive Committee.

He wouild be paid one year's salary (£820,000) from February 1, 2002, one year's on-target bonus (£615,000), plus the value of other benefits such as car, health insurance etc (£50,000).

In addition he would be credited with one additional year of pensionable service.

The company said his executive share awards worth £290,000 would be preserved at BT's October 30 closing share price but are paid out over the next three years and depend on company performance against the FTSE 100 during that period.

Bonfield also has deferred bonus plan awards totalling 296,084 shares receivable over the next three years, the company said.