BT has become the latest firm to announce plans to cut its top executives’ pension allowances to be in line with the rest of its workforces’.

As reported by Sky News, BT chief executive, Philip Jansen, will have his pension contribution reduced from 15 per cent to 10 per cent of salary.

Furthermore, chief financial officer, Simon Lowth, will have his pension allowance cut from 30 per cent to 10 per cent of salary over a three-year period.

The company also plans to link the executives’ bonuses to sustainability targets for the first time.

Executive pensions have faced increased scrutiny since September 2019, with the Investment Association (IA) cracking down on companies that have failed to align executive pension pay with their workforce.

The IA has told companies that they must pay all executive directors the same pension contribution levels as the majority of their workforce by the end of 2022, or risk shareholder action.

Directors who are paid more than 25 per cent of their salary as a pension contribution will be given a 'red top', the IA’s highest level of warning, if they do not have a credible plan to reduce contributions to the level enjoyed by most of their staff by the end of 2022.

BT follows Santander, Lloyds, Barclays and Sainsbury’s in reducing its executives’ pension allowances.

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