TPG boss David Teoh’s pay falls with telco’s $15bn Vodafone Hutchison Australia merger still in limbo

TPG is tightening its belt in search of growth with full year 2020 expected to see the telco’s earnings come under increased pressure.

TPG boss David Teoh. Picture: David Geraghty

TPG boss David Teoh has seen his full year 2019 pay go backwards, with the telco’s $15bn merger with Vodafone Hutchison Australia (VHA) still in limbo and its fixed broadband business under assault from the National Broadband Network.

According to TPG’s annual report to shareholders released on Friday, Mr Teoh pocketed $3.09m in total salary for the period, $316,000 lower than the $3.41m he was paid in fiscal 2018.

TPG posted a 56 per cent slump in net profit to $173.8m for the 12 months to July 2019, with revenue for the period flat at $2.48bn.

With the NBN continuing to reduce TPG’s margins in the fixed broadband market, the telco’s stalled mobile ambitions have also weighed on its numbers.

TPG, VHA locked horns with the Australian Competition and Consumer Commission (ACCC) at the Federal Court in September, with the intensely private billionaire boss of TPG forced to make a rare public appearance in Melbourne.

With a final verdict expected to land next February, Mr Teoh told shareholders he was upbeat about the court ruling in favour of the telcos.

Hopeful on merger

“We remain hopeful that the merger will be permitted to proceed,” he said.

“We also believe that the investment in the merger transaction has been sensible, given the board’s view that the merger, if it is permitted to proceed, will be beneficial for TPG shareholders and allow us to become a more formidable competitor to Telstra and Optus.”

Meanwhile, TPG is tightening its belt in search of growth with full year 2020 expected to see the telco’s earnings come under increased pressure.

FY20 is expected to be the year that the group experiences the greatest financial impact from customer migration to NBN, with combined headwinds from residential DSL and home phone customers moving to NBN expected to be around $85m.

The telco reduced its headcount by 6 per cent in FY19, from 5056 a year earlier to 4776 employees.

“Consumer segment employment costs decreased by $11.6m in FY19 and from 7.7 per cent to 7.1 per cent of revenue.”

“Corporate segment employment costs decreased by $7.7m, and from 14.4 per cent to 13.3 per cent of corporate segment revenues.”

“This reduction in employment costs principally reflects ongoing efficiencies that have been achieved through the continued integration of iiNet operations and increased automation of business processes,” TPG said.