BT's Gavin Patterson quits under shareholder pressure

BT's Gavin Patterson quits under shareholder pressure

BT has this morning announced that Gavin Patterson, CEO of nearly five years, is to leave his role, with the market reaction to recent results cited as the reason for change.

In a surprise move the company said that it had already started the process of looking for his successor, and expected to appoint a new chief executive in the second half of the year.

Deutsche Telekom, BT's largest shareholder with a 12 per cent stake, has grown increasingly dissatisfied with Mr Patterson's performance over the past year, partly because of blunders like an accounting scandal in Italy, according to a person familiar with the situation. After his departure was announced, the shares were up by 1.2 percent.

"The broader reaction to our recent results announcement has though demonstrated to Gavin and me that there is a need for a change of leadership to deliver this strategy", he said.

Despite this, Mr Patterson managed to head off a threat to split BT's Openreach broadband division into a separate company.

Chief Financial Officer Simon Lowth was a potential successor, they said, but an external candidate was more likely.

Patterson, who has led BT since 2013, announced plans last month to cut 13,000 jobs as part of a restructuring created to simplify the group's management structure. It would cost £800 million ($1.1 billion) to implement. He rose to the position of CEO of BT Retail before becoming group CEO in 2013, after his predecessor Ian Livingston left to become a government minister.

The plan would save the former United Kingdom telecommunications monopoly an estimated £1.5 billion ($2 billion) over three years.

But the subsequent decline in the share price showed investors were not on side.

Patterson went on to kick-start the organisations' realignment in favour of rolling out fibre-to-the-premises (FTTP) - also known as full-fibre - broadband as the service delivery network of choice, prior to which BT and Openreach had insisted on sweating their legacy copper assets to the alleged detriment of the UK's digital economy.

"I am confident that, for the remainder of his term, Gavin and his senior management team will continue to display the energy required to deal with every dimension of the task at hand", he said.