Ann: Results of Meeting, page-3

https://www.theguardian.com/austral...whole-of-corporate-australia-telstra-chairman

An astonishing 62 per cent of Telstra shareholders voted against the company's remuneration report, in a year where the average self-managed retiree's default yield stock slashed its (fully franked) dividend from 31¢ to 22¢, copped a collapse in its share price of 38.7 per cent (chicken or egg?) and implicitly conceded (by announcing a grand plan to cut costs) it had been strategically nowhere for nearly three years.

One thing's for sure: chairman John Mullen didn't turn up for a game of backgammon, the inside of his suit jacket resembling Keanu Reeves' at the security checkpoint in The Matrix.

"Some observers out there seem to think that directors sit around like the Witches of Macbeth scheming as to how they can manipulate incentive schemes to give improper benefit to already excessive executive salaries." Telstra's board, Mullen fulminated, "spend an inordinate amount of time really trying to get the balance right between protecting shareholders' interests and not overpaying executives, while motivating, incentivising and retaining the best management talent we can".

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The board exercised its discretion to reduce Andy Penn's bonus to 66 per cent of the target (a 30 per cent haircut), failing to appreciate the depth of the investment community's anger at the managing director's seemingly pathological lack of urgency. David Rowe
Investors witnessed, in real time, the cogs of Mullen's brain registering his failure to get that balance right. The board exercised its discretion to reduce Andy Penn'sbonus to 66 per cent of the target (a 30 per cent haircut), failing to appreciate the depth of the investment community's anger at the managing director's seemingly pathological lack of urgency. The board regarded it as a pay cut, and a mean one. The market considered it two-thirds of an utter disgrace.


Mullen is one of the best directors going around, so this conflagration is perversely promising; the kernel of a better way, for once pre-emptive of shame, and of the cycle's turn.