Ian Livingston, the new chief executive of BT, has been awarded a package that will be worth almost £7million if he meets all the targets of a new incentive scheme.

Mr Livingston, 43, will succeed Ben Verwaayen as head of the telecoms group on July 1. His new package could be more than double that of a year ago, thanks to a newly structured pay package for senior executives.

Mr Livingston will earn a basic salary of £850,000, up from the £554,000 he received as head of BT Retail. On top of this, he can expect to add £1.7 million in annual bonuses, £1.7million as a deferred bonus in shares that vest after three years, and £2.55 million in incentive shares if the group hits its top performance targets, taking the total to £6.8 million.

In the last financial year Mr Livingston accrued a total of £3.35 million, including deferred bonus, up from £3.23million the year before.

A BT spokesman said: “We are always extremely happy to reward success. If the company hits extremely stretching targets and the executives earn the maximum amount, the shareholders will be cheering from the rooftops.”

Mr Livingston's basic salary is £58,000 more than the figure Mr Verwaayen earned in basic salary last year as BT boss. Mr Verwaayen will depart with about £5million in pay and shares when he leaves the company next month.

Under the terms of his contract he is entitled to £700,000 on termination and he is eligible for a bonus for the period of April 1 to June 30 of about £300,000. He will also receive shares already earned as a deferred bonus during the past three financial years worth about £4 million.

According to BT's annual report published yesterday, other benefits in the executive pay package include company car (plus fuel or a driver), personal telecommunications facilities, home security, medical and dental cover, special life cover and financial counselling. BT said basic salaries had been increased to bring them within “an acceptable market range”.

Hanif Lalani, the finance director, will receive a basic salary of £585,000, up from £520,000 last year, while Francois Barrault, Global Services chief executive, will be paid £654,000, up from £528,000 last time.

Mr Barrault, who took over from Andy Green, earned a total £1.58 million, including £208,000 in benefits.

Mr Green, who left last year to become chief executive of Logica, the IT services group, earned £234,000 in bonuses for the months he worked during the year.

Sir Peter Bonfield, BT's former chief executive, continued to receive a pension of £375,736 a year “under pre-existing arrangements”.

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