Telecom trio join $1m club

By PETER GRIFFIN

Three Telecom executives joined the million-dollar salary club in the past financial year despite the company's posting a loss of $188 million, its first dip into the red.

Chief executive Theresa Gattung herself had a pay packet totalling $1.8 million in the year to June 30 this year, a rise of $170,000 on the previous period. The total included share options of $473,000.

Gattung was joined by three executives earning more than $1 million. Another was narrowly excluded, earning about $990,000. Twenty Telecom employees earned more than $500,000.

Telecom spokesman John Goulter would not reveal who the highest paid executives were, but they did not include chief operating officer Simon Moutter or the head of Telecom's Australian operations, David Bedford.

While an $850 million write-down of AAPT's value was never going to endear Telecom with the market, Gattung and her team have generally won praise for tight management in a battered telecoms sector.

Telecom's annual report, released yesterday, said senior managers at the company generally had 55 per cent of their remuneration packages paid out as a fixed component.

The rest was at-risk short-term and long-term incentives related to performance. Of Telecom's 6900 employees across New Zealand and Australia, 87 per cent now had their pay tied to their performance.

Remuneration will be a hot topic at Telecom's annual meeting, to be held on October 10 in Wellington.

The Shareholders Association has signalled it will broach the subject of directors' pay at the meeting, seeking ways that remuneration can be better aligned with the long-term interests of shareholders.

Its wishlist includes restricting directors' retirement allowances to no more than "10 per cent of the total remuneration of the director in his or her normal capacity as a director of the company", and requiring the payment to be authorised by an ordinary resolution of shareholders.

The annual report showed Telecom's biggest single shareholder, US telco giant Verizon, held a 20.75 per cent stake in the company, down from 22.8 per cent last year.

With Verizon on a drive to chip away at its US$60 billion mountain of debt, there is speculation that it may look for a more significant sell-down in the Telecom stake, or a complete sell-out.