Review of the latest BT chief executive Ian Livingston
Posted by Cloud Net on Mon, Jun 14, 2010 @ 05:02 AM
Ian Livingston was appointed chief executive of BT Group on June
1st 2008. So 2 years on, just how has the lad done?
When he was appointed the share price was 216p and the FTSE at 5908. Today the share price is 130.10p and the FTSE 5126.00. So he has just about destroyed a third of the value of the company (39.7% actually) whilst the FTSE has fallen a mere 13%.
Maybe it's the telecoms sector? Maybe they have been hit particularly badly? There aren't many other British companies to compare with in the sector but the obvious one is Vodafone. Vodafone's share price was 161.5 in June 2008 and it is now 138.00. A decline of 14.5% - pretty much in line with the FTSE. It is too soon to compare BT with the performances of Cable and Wireless and TalkTalk but given they have just debuted one would assume they have done pretty well.
Maybe it's the fixed line business so let's look at France Telecom then. They traded at 17.74 Euro in June 2008 and today it's 15.44 Euro. A 12.9% decline.
So not a great performance then Ian. It is difficult to see why such a lacklustre performance justifies a whopping great £1.2m bonus. I can clearly see why the unions are not happy with the situation. If I was still a shareholder, then I wouldn't be happy either.
We know it's a tough world out there for BT with competition attacking at all sides. Their business margins must be under attack from hosted VoIP companies, like Cloud Net, who provide full business telephone systems for free, include ported telephone numbers and then offer very low call charges.
So overall I'm afraid I won't be buying BT shares any time soon and I do think that Ian shouldn't reward himself further until he does something for his shareholders and his staff.
Written by David Hill, Chairman, Cloud Net.