“This is a discussion for another day but it would greatly simplify the whole executive remuneration debate.”
Mr Mullen said key executives had missed out on their incentive outcomes for underlying earnings because of reduced revenues, decisions to defer redundancies and the introduction of packages to assist customers who were struggling because of the pandemic. Challenges with international call centres related to social distancing restrictions also reduced customer experience, which led to missed NPS targets.
Mr Penn and two other key executives also had payments reduced by $758,000 – 10 per cent – because of bad sales practices that occurred in several stores primarily in the Northern Territory. The Australian Competition and Consumer Commission started an investigation last year into the way Telstra’s products were sold to vulnerable customers.
“Our view in these matters is that the responsibility ultimately stops with the company’s leadership and the board’s decision on remuneration outcomes for Andy [Penn] and two of his executive team reflected that while there was no specific adverse conduct by them personally, they were ultimately accountable,” he said.
Mr Mullen’s commentary on remuneration was very different to his presentation last year and in 2018. Last year Mr Mullen slammed critics of Mr Penn’s $5 million-a-year pay packet and argued kids playing popular video game Fortnite, social media influencers and professional athletes are paid similar sums of money. In 2018, Telstra shareholders revolted with 62 per cent voting against the company’s remuneration report.
“It was very pleasing this year to see broad support from proxy advisers and others for our approach to executive remuneration which, as I have said many times, is a responsibility the Telstra board takes incredibly seriously,” Mr Mullen said.
Telstra shares opened up 2.5 per cent to $2.85. As of yesterday, Telstra had lost 20 per cent of its value in 2020.