Telstra has defended chief executive David Thodey’s $8.
8 million pay packet after a shareholder questioned whether the telco’s performance justified such a salary.
At the telco’s annual general meeting in Sydney, shareholder David Jackson questioned an 8.7 per cent increase that lifted Mr Thodey’s base pay to $2.65 million last year.
The CEO also received millions in bonuses and incentive-based shares.
“If you can allow an 8.7 per cent increase in the base pay of Mr Thodey, it doesn’t sit very well with many shareholders and many employees because they have not received anything like that,” he said during questions from the floor of an otherwise low-key meeting.
Mr Jackson said Telstra’s earnings had been flat over the past five years, and was applauded by most of the 500-strong audience when he said shareholders were “paying lots of money and quite often for results which are not very satisfactory”.
Chairman Catherine Livingstone said executives were rewarded according to their performance, and defended Telstra’s recent results, saying the market and technology had undergone enormous change.
“Every year David Thodey and his team have to cope with the fact that half a billion dollars of revenue on fixed-line voice will no longer be there,” Ms Livingstone said.
“That revenue has to be replaced.
“We regard the performance of the executive team in managing the business model change in Telstra as warranting the remuneration that we provide.”
The remuneration report was passed with 98 per cent shareholder support.
Telstra faced further criticism from the Community and Public Sector Union, which mounted a small protest outside the AGM over more than 3,000 jobs cut by the telco this year.
Ms Livingstone said Telstra’s workforce was “rebalancing”.
“While we have proposed that in our operations workforce, certain roles will reduce by around 1,100 jobs by June next year, we have made other announcements recently that could result in close to 1,000 jobs being added by operations in other areas,” she said.
Mr Thodey also signalled further cost savings.
“We believe there remains further opportunity to improve operational efficiency while growing new business opportunities,” he said.
Telstra would continue to spend the same percentage of its sales revenue on the rollout of the 4G mobile network, he added.
Telstra’s capital expenditure was $3.8 billion in 2012/13.
“We expect capital expenditure to be around 15 per cent of sales as we continue to build out our 4G mobile network and complete the build of the NBN transit network,” he said.
Ms Livingstone said the telco would continue working under existing contracts for the National Broadband Network while the new federal government carried out reviews of the project.
Telstra shares added seven cents to $5.00 on Tuesday.