BT gives 'fat cat' Bland £500,000 for three-day weeks

That works out as just over £3,205 for every day he spends at work - assuming he takes no holiday.

The ex-BBC boss, who started work as chairman yesterday, will also take home a £5,000 tax planning allowance to help him handle all his money, and £1bn in free share options providing he buys £1m worth of shares himself.

The man - already nicknamed Gold Bland by some - can also expect to benefit from a chauffeur-driven limo and a new home security system.

However, analysts claim the package is only justifiable if Bland manages to turn the company around.

Robin Duke-Wooley, analyst at Schema, said: "He is worth it if he manages to get through all that. We need to put his salary in context with shareholder value. If the shareprice rises from £5 to £8 within six to eight months then he will certainly have earned his money but if it goes down to £4.50 then no, he's not worth it."

But this is by no means the largest package around, said Tony Lock, senior analyst at Bloor Research

"If in 18 months BT's market has picked up then people will say £500,000 was a bargain but there are a lot of potential pitfalls for Bland. If it goes wrong then he will be castigated to say the least."

BT's biggest problem is its image, claimed Lock. "BT's image problem is now reaching the man in the street without shares in BT- it's not just the press who see it. BT needs a coherent strategy with a long-term future that the market believes in and then it can get the media onboard."

Duke-Wooley agreed: "BT needs someone who understands the media as it has a problem getting its message across to MPs, the media and shareholders."

The company has fallen on hard times, he continued, so judgments that appeared sensible 12 months ago seem less sensible now, such as running up debts through its spending spree and buying into 3G.

However, debt reduction should not be Bland's sole focus over the next few months.

Duke-Wooley said: "The company does need to reduce its debt but to throw the baby out with the bath water and rightsize itself for a market which we believe to be temporary is short sighted.

"We believe the market will rebound and if BT starts selling lots of good assets then in a year's time the shareholders will wonder why Bland did that."

City analysts have predicted some of the cash to pay off the £30bn will be raised through a rights issue, offering all shareholders the opportunity to buy more shares at a discount rate. An estimated £1.25m could be raised with shareholders paying £750 each to support the company.

A BT spokesman claimed Bland was only receiving the going rate for a chairman and refused to justify the package at a time when the company was trying to reduce costs.

If you have an opinion on Sir Christopher Bland's £500,000 salary or want to suggest alternative uses for the money then make sure you read our article at http://www.silicon.com/a44190