Telstra dollars and sense

Senior executives copped a cut to short-term bonuses after the telco’s consumer rating dropped.

Telstra’s Andy Penn has taken a cut to his short-term bonus.

Telstra’s senior executives copped a big cut to short-term bonuses last financial year after the company suffered a fall in its consumer rating, with its net promoter score falling four points.

The exact percentage of falls is clouded by the fact CEO Andy Penn and CFPO Warwick Bray both received big pay increases after only working part of the prior year in their new jobs.

Penn’s short-term bonus fell from $1.6 million to $1.2m but fixed-term pay increased from $1.6m to $2.3m and overall pay from $4.8m to $5.6m.

Warwick “Austin Powers” Bray received $2.3m in total pay last year.

Outgoing chief operations officer Kate McKenzie saw her short term bonus fall by 58 per cent and Global Enterprise chief Brendon Riley also saw his short term pay fall by 456 per cent.

Their total pay was up slightly, taking into account long-term bonuses to $2.9m and $3.6m respectively.

Former retail boss Gordon Ballantyne walked away with $1.3m in termination benefits, which should mean a similar payout to McKenzie this year based on the Telstra principle that when you leave senior executive ranks you are “retiring”.

The company has pleased shareholders with a second half dividend of 15.5 cent and full-year payout of $1.8 billion, or 31 cents a share.

It will also boost earnings per share through a $1.5bn buyback.

Penn unveiled an increase in spending to help keep Telstra ahead of the curve on technology, with a $3bn boost to capital expenditure to boost capex to sales from 15.2 per cent to 18.6 per cent.

But growth has slowed at the company, with sales up “just” 3.2 per cent on continuing divisions and earnings before interest and tax down 3.8 per cent to $6.3bn.

The company, which reported a $600m boost to NBN revenue to $1.4bn, argues the network will still end up costing it $2.5bn a year.

This is based on earnings lost from the loss of its highly profitable fixed line business which is still earnings 41 per cent in profit margins.

The mobile division’s margins edged up to 42 per cent.

CSFB has estimated that over the course of the NBN rollout Telstra will collect $98bn in compensation payments from the taxpayer, but the company maintains even after receipt of this money it will be a net loser.

The NBN was introduced in part to break the Telstra monopoly ownership of the old copper network and the retail services.

The fall in consumer ratings last year came at a time the company suffered several outages from its famed mobile network.

In late morning trade the stock was down 1 per cent at $5.54 a share.