Gattung likely to enjoy full $2m pay package

Telecom chief executive Theresa Gattung is likely to pocket her full $2 million pay package after delivering a year of strong earnings.

Gattung, one of New Zealand's best-paid chief executives, last year won approval at Telecom's annual meeting to restructure her remuneration to "reflect the scope and complexity of the role". Paid a base salary of $1 million, she can earn another $1 million in cash and shares based on Telecom's performance.

Gattung's remuneration target is set annually by the board. Investors will have to wait until Telecom issues its annual report in the next few weeks to see if her target for this financial year has been lifted yet again.

Telecom spokesman John Goulter would not comment on Gattung's package but said all Telecom employees had a performance-based aspect to their pay as measured on an economic value added (EVA) basis.

Gattung was issued 500,000 "performance options" last November.

To pocket these performance options, Gattung is rated on personal benchmarks as well as the "average daily closing price of Telecom shares reported on the NZSX for the 10 business days immediately preceding the date of testing" each year, and "Telecom's total shareholder return over the relevant period". On both counts, Gattung appears to be doing well.

Her performance benchmark includes gross returns being compared on a global telecoms index.

Gattung stands to be issued a maximum of 1.5 million shares over three years, shares that can't be sold for a three-year period.

Telecom's share price has continued to rise since early last year, when the share price languished around the $4 mark. Even then most analysts said the shares were sorely undervalued and had share price targets well over the $5 mark.

Last October, when Gattung's new pay structure was approved, the share price was just over $4.50.