Outgoing chair says Telstra made the right choice to back Yes vote

Shareholders have lashed Telstra for ‘wasting’ $1m on the Yes campaign, as outgoing chairman John Mullen maintained it was the right call.

Telecommunications giant Telstra defended its decision to give $1m into the failed Yes campaign for an Aboriginal and Torres Strait Islander voice to parliament, declaring it was in the “best interests of the company and shareholders”.

Outgoing chairman John Mullen told shareholders at his final annual general meeting that while the telco respected the result of the referendum, Telstra was a “values-based company” and would make the same choice to back Indigenous causes.

“This was not a decision taken as a result of the personal views of any board or management members individually, and indeed just like the community there are differing views among both our board and management,” he said.

“However, where we are all in agreement, is that support is in the best interests of the company and therefore our shareholders.”

On Saturday, 60 per cent of Australians and all states voted against the plan to enshrine a permanent Indigenous voice to parliament. The rejection of the referendum by Australians came after big business backed Yes23, with the likes of Telstra, Wesfarmers and Qantas pouring tens of millions of dollars into the failed campaign.

Mr Mullen said the board believed that reconciliation is a positive step forward for Australia and for the economy, and therefore positive for the business and shareholders.

“For this reason, and because we are a values-based company that supports our words with actions, we supported the Yes campaign by providing $1m of advertising spend,” he said.

Australian Shareholders’ Association chief executive Rachel Waterhouse told The Australian that retail shareholders should be asking questions about how companies donate money to causes.

“Where companies support social issues, boards and management should ask themselves what their customers, investors, employees and stakeholders would expect from them and how they can engage to find out what is important,” she said.

“Not to say if it is right or wrong to donate money, but companies should make decisions to support social causes on a case-by-case basis and only if it aligns with strategy and then it should be clearly communicated to investors.”

Telstra’s stance appeared to not have the support of shareholders present at its annual meeting in Melbourne on Tuesday, with raucous cheers heard throughout the venue after an investor told the group to “stop wasting company resources to make political statements”.

“This was wrong and did not respect shareholders and customers against the voice, which included some Aboriginal people. It was shareholder abuse and an attempt to curry favour with the government,” the shareholder said amid a loud round of applause.

Mr Mullen stood by the company’s stance, telling investors that it does not take a stance on every social issue, but felt compelled to do so considering its relationship with remote Indigenous communities in providing coverage to the bush at a loss.

“We think our engagement with the Indigenous community is really important and therefore in our case, it’s not the case for every company, but in our case, we felt it was the right decision to support that case,” he said.

Telstra was among the biggest backers of the failed Yes campaign. Picture: Luis Enrique Ascui/NCA NewsWire

The meeting was an eventful affair as new director Maxine Brenner had 17 per cent of investors vote against her appointment to the board after a proxy firm raised concerns about how she handled governance issues in her other role as a director at Qantas since 2013.

Asked by one shareholder why they should vote for Ms Brenner given she was “responsible” for Qantas’ governance failures, Mr Mullen said questions about her role at Qantas were “inappropriate” and would not be tolerated.

“Questions relating to anything to do with Qantas or Maxine’s role as a Qantas director are inappropriate and we will not be answering them. This is a Telstra AGM and if you have questions about anything to do with Maxine’s tenure at Qantas, I respectfully suggest that you attend the Qantas AGM and you ask those questions there,” he said.

“Maxine is smart, engaged, very experienced and is a strong contributor of a lovely personal style. In my view and the views of my fellow directors, shareholders are very lucky to have someone of her calibre representing.”

Chief executive Vicki Brady declared that the telco’s T25 strategy was at the midway point, with it winning customers and gaining good momentum across its four strategic pillars.

Ms Brady also confirmed in her speech that underlying earnings before interest, taxation, depreciation and amortisation (EBITDA) guidance is consistent with its T25 ambition for a mid-single digit compound annual growth rate from fiscal year 2021 to fiscal year 2025.

Telstra delivered a net profit of $2.05bn in the 2023 fiscal year, up 13.1 per cent year-on-year, and total income of $23.25bn, up 5.4 per cent. It lifted EBITDA by 8.4 per cent to $7.8bn.

The telco also expected capital expenditure of $3.6bn to $3.7bn in fiscal 2024, with $300m of strategic investment outside of business as usual for the intercity fibre and Viasat infrastructure projects, $150m for Digicel Pacific and increased commitment to infrastructure investment in international.

“Importantly, we expect to continue to achieve strong cash flow, enabling us to invest for growth and deliver returns to shareholders,” Ms Brady said.

Telstra last week announced that it would pay $267.5m to buy Melbourne-based cloud solutions group Versent.