Belgacom executives take pay cut

Belgacom is cutting the pay of directors and top executives, in line with the salary of new CEO Dominique Leroy, said the company’s chair of the board, Stefaan De Clerck, at the weekend. In an interview with De Tijd and L’Echo, De Clerck said that “everyone has to make sacrifices and not only the government, which, as a shareholder, has had to make do with less dividend”.

Before Leroy’s arrival as CEO in January, the federal government set a ceiling of €650,000 a year for executives of state-owned enterprises like Belgacom. Several executives of the company still earn salaries from the era of former CEO Didier Bellens, which are more than the CEO is now allowed.

CFO Ray Stewart, who stepped in as acting CEO between Bellens and Leroy, currently earns €1.4 million a year. Stewart retires next year, and his successor’s pay will be 20 to 40% less than Leroy’s. The salaries of two new directors appointed last week – Agnès Touraine, chair of management consultants Act III, and Catherine Vandenborre, CFO of power supplier Elia – will similarly be capped at a level under that of the CEO.

Only one currently serving director will earn more than the boss: director Bart Van Der Meersche (pictured), executive vice president of Belgacom’s enterprise business unit, has a contract of indefinite duration. The company will not break existing contracts, De Clerck said. Other directors will give up 10% of their existing salary.

Belgacom announced at the end of last month that it would cut dividends by about one-third over the next three years. The 2013 dividend will be €2.18, including an interim dividend of 50c paid in December. The dividend in the next three years will drop to €1.50, the company said.

The news was an unwelcome blow for the federal budget; as the holder of 53.5% of the shares, the government relies on earnings from Belgacom. The federal income from Belgacom will fall from €410 million this year to about €280 million in coming years.

Photo courtesy Belgacom Group