The telecoms giant announced that its remuneration committee had conducted a review of executive remuneration in light of the company’s performance in the 2016/17 financial year.

Tony Ball, the remuneration committee chairman, said: ‘The past year has been challenging. Although good progress has been made in a number of areas, unfortunately our performance has been significantly affected by the accounting irregularities in our Italian business, the issues that arose in Openreach around deemed consent and the significant challenges we faced in the UK public sector and international corporate markets.’

Patterson stands to lose around £4m, as he will now be paid £1.34m for the year to the end of March, mostly consisting of his annual salary of £993,000, a 74% reduction on the £5.28m he received for 2015/16.

Both men will also be required, under malus provisions in the company’s deferred bonus plan, to return incentive payments award for hitting profit targets in the previous three years. Patterson’s deferred bonuses will be cut by £338,398, and Chanmugam’s by £193,412.

BT said that after detailed reviews of its operations in seven countries it was confident that the accounting issues, which involved improper sales, purchase, factoring and leasing transactions, were confined to Italy.

The investigation cost an additional £15m in the fourth quarter, on top of the £530m write-down announced in January when irregularities were first detected.