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Telstra Chairman Defends Exec Pay – Not The “Witches Of Macbeth”

UPDATE – A record 62% of shareholders have voted against Telstra’s remuneration report, with some claiming it’s “irresponsible” for executives to receive such large bonuses amid over 8,000 jobs cuts.

Telstra Chairman, John Mullen, has defended criticism over executive pay, asserting the telco’s directors do not “sit around like the witches of Macbeth” scheming about incentive programs.

Despite his defence, Mullen agrees executive salaries are “too high across the board”, however, affecting change will require support from “all of corporate Australia.”

Mullen’s remarks were made at this morning’s AGM, following claims a significant number of shareholders don’t approve Telstra’s remuneration report.

The telco is tipped to receive its first strike later today, after the final vote on executive remuneration is tallied.

“This is deeply, deeply disappointing to my board colleagues and me”

“I cannot overstate the amount of time we devote to remuneration, and how seriously we take the responsibility.”

Mr Mullen has also defended criticism of Telstra’s “poor” performance, affirming it is “simply not true.”

Despite market “disruption”, Mullen asserts Telstra has managed to deliver on its guidance, largely maintain market share, and make a $3.5 billion net profit after tax.

Telstra has reportedly received significant criticism from proxy advisors, leading to the likely first strike against its executive remuneration report.

CEPU Communications Union claims it received nearly 200,000 proxies from Telstra workers and supporters ahead of the AGM.

Despite this, Telstra claims there will be no changes to its current remuneration strategy.

Mullen admits next year will be a “difficult year for Telstra”, but asserts the telco cannot change direction every time a proxy advisor disagrees.

By consequence, the telco states its cannot inform management there will be no variable remuneration this year, even if they “do a great job.”

“We will listen, we will consult yet again, and we will do everything we can to amend and enhance our remuneration policies where it is demonstrated that we can do better, but we cannot compromise on doing what we think is right for the long term health of the company and for you, our shareholders.”

“I am very willing to apologise if, despite our best efforts, we have not been adequately transparent in our remuneration disclosures, or we have missed enhancements that could make our structures better”

“If anyone has a better solution, we would welcome it.”

Concerning future outlook, despite marketplace changes Mullen affirms the future is exciting.

He asserts Telstra is determined to do everything it “possibly can” to transform the telco from a leader in the “old world”, to a leader in the “new world of telecommunications.”

Mullen’s Chairman Address has been published to the ASX ahead of this morning’s AGM, and can be read here.

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