Telstra board expected to cop backlash on executive pay

A number of Telstra shareholders have voted against the telecommunication company’s remuneration report.

They appear to have disagreed with how the company rewarded chief executive Vicki Brady in a year that also saw a $311 million write-down of the Telstra Enterprise business and $250 million to $350 million in restructuring costs related to the layoff of 2800 workers.

New chairman Craig Dunn will address shareholder concerns in his speech to Telstra’s annual general meeting later on Tuesday, according to the speech’s text, which was released to the ASX.

“I appreciate there are always a range of views on remuneration, but I’d like to emphasise that the Board made careful and deliberate decisions on both these items, with the fundamental driver being to act in the best interests of shareholders, now and into the future,” Mr Dunn will say.

Under Telstra’s executive variable remuneration plan, Ms Brady receives $2.4 million in fixed compensation, with the potential to earn up to $7.2 million more in bonuses paid in cash and restricted shares.

It wasn’t clear on Tuesday morning the extent of the backlash or whether the report would pass with the 75 per cent majority needed to avoid a “first strike”.

Shareholders who haven’t already voted on the remuneration report before the meeting will do so on Tuesday.

Mr Dunn said the board would consider in detail the feedback the board had received and reflect on the approach taken.

Mr Dunn is also set to tell shareholders that Telstra’s mobile and infrastructure business continues to perform strongly, while the reset of its disappointing enterprise business will take time, discipline and focus.

“As we move into the final year of our T25 strategy, the board continues to be very confident in the company’s outlook,” he is set to say.

Ms Brady will tell shareholders that changes that affect Telstra’s people were never easy, and she didn’t underestimate the impact they had.

“I am optimistic about the opportunities ahead,” she will say.

“Telstra’s digital infrastructure and network will be increasingly central to how Australians live and work, and we are focused on investing sustainably to deliver for our customers and our shareholders.”