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Telstra seeks to head off pay protest with apology to shareholders

Thu 11th October, 2018 2:03am
SYDNEY, Oct 11 (Reuters) - Australia's largest telecom firm,
Telstra Corp Ltd  TLS.AX , wrote an apology to shareholders on
Thursday to head off a vote against executive pay at its annual
meeting, after a tumultuous year where profit fell and shares
hovered near all-time lows.
    Telstra has struggled for growth as competition and
technology hammer its mainstay businesses, pounding its share
price and pushing it to its weakest annual profit in six years
in August.*:nL4N1V65OX
    The company has already cut executives' bonuses by nearly a
third, which it re-iterated in the letter, sent out days before
shareholders vote on pay structures at the company's annual
general meeting in Sydney on Oct. 16.
    Telstra is keen to avoid a protest vote because if more than
a quarter of shareholders disapprove of the pay packets in
consecutive years it triggers a vote to spill the board under
Australian law. 
    "We know that a number of you are disappointed with this
year's remuneration outcome," Telstra Chairman John Mullen wrote
in a note address to shareholders and released to the Australian
Securities Exchange on Thursday.
    "We perhaps did not provide enough transparency around some
of the metrics that we adopted to measure management performance
and the reasons as to why these were chosen. For this we
apologise," he wrote.
    Only 9 percent of shareholders voted against the executives'
remuneration last year, however Telstra is bracing for a
stronger vote this time after large proxy advisor CGI Glass
Lewis recommended shareholders oppose it.
    CGI Glass Lewis found the pay structure placed overly heavy
reliance on customer satisfaction metrics and meeting earnings
targets, however lacklustre.
    Telstra Chief Executive Officer, Andy Penn, was entitled to
a salary of A$2.4 million ($1.7 million) in cash, plus bonuses
worth just over A$2 million in cash and shares for the 2018
financial year, according to the annual report.    
    Telstra dominates Australia's mobile telephone and broadband
markets, but its business has been upended by a new government
broadband network.
    In response Telstra has unveiled a plan to slash 8,000 jobs
- a quarter of its workforce - as well as flagging asset sales.*:nL4N1TL4ZH
    Telstra shares have shed 10.8 percent for the year to date
and almost halved since Penn took charge in May 2015.
    On Thursday Telstra shares fell 1.4 percent in a plunging
broader market  .AXJO , which dropped 2 percent.
($1 = 1.4144 Australian dollars)

 (Reporting by Tom Westbrook; Editing by Stephen Coates)
 ((; +61466355340; Reuters
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