KEY POINTS:
On show at Telecom's annual general meeting yesterday, Paul Reynolds sat calmly as shareholders questioned the value of his remuneration package.
Shareholders spoke out against the level of the remuneration for Reynolds and other senior management when compared with the salary of the average Telecom employee.
Board chairman Wayne Boyd went in to bat for Reynolds, pointing out the company was undertaking one of the most challenging transformations of any telecommunications company anywhere.
"We compete for executive talent in a highly competitive global market and it is essential our remuneration is competitive to attract and retain top executives to lead our business through this challenging period," said Boyd. "Paul's remuneration reflects the depth of his international expertise and the challenge in leading Telecom through this transformation."
Boyd said the package offered to Reynolds was closely tied to long-term shareholder value and two-thirds was directly linked to his own performance and Telecom's overall performance with "rigorous targets to be met".
Until the end of Telecom's financial year the package consists of three components - a base salary of $1.75 million, a performance incentive of up to $1.75 million made up of 60 per cent cash and 40 per cent shares or at the board's discretion paid 100 per cent in cash (the salary and bonus are pro-rated for 9 months' employment) and a long-term performance bonus of share rights to the value of $1.75 million.
Reynolds responded after the meeting by saying the questions showed what was on the minds of people.
"That's partly their ambitions for the company and it's partly about concerns for some issues and that gives me a good clue as to what to focus on."
He said shareholders had a right to be concerned about a chief executive's remuneration and to understand if they were getting value for money.
"My job is I give our shareholders the value for the money the company has chosen to pay."
