Gordon Campbell: Gattung’s attack on Telecom

One hates to kick someone when they’re down – but when it is former Telecom CEO Theresa Gattung and she is peddling a book in which she professes herself to be shocked (shocked!) by the size of the remuneration packages currently being paid at Telecom, the urge is irresistible. Gattung, like David Lange before her, seems more than willing to criticize the organization she once headed, as if she bore no residual responsibility whatsoever for its current condition.

The gist of Gattung’s complaints is that (a) Telecom executives are being paid too much now. In her opinion, a $7 million salary and incentives package for current CEO Paul Reynolds is intolerable, but her own $3 million package was OK and the $5.4 million payout she received in 2007 was also value for money (b) Labour’s then Telecommunications Minister David Cunliffe played a devious tactical game with Telecom during the reform process (c) the then- Labour Party president Mike Williams sounded her out on becoming a Labour candidate (d) she got treated badly throughout her career because she is a woman and (e) a firm recently considered hiring her, but concluded that she would be “ too strong” and doubted they could work with her.

Taking those in turn… once you get to seven figure salary and incentives packages, I would have thought the little number at the front becomes almost irrelevant. Both her and Reynolds’ remuneration packages are – and were – obscene. I’d have thought it would be quite hard to pocket $3–5 million remuneration packages every year and still claim that you were being discriminated against on the basis of your gender. Apparently not. Put it this way: did Gattung do a really good job of positioning the company for the more competitive environment in which Telecom now finds itself? Did she manage to negotiate productively with a Labour government that was intent on reform, and on ending Telecom’s capacity to screw consumers and the economy for the greater benefit of Telecom shareholders? Hardly.

The reality is that Telecom had wielded its power without compunction for at least 15 years, ever since Richard Prebble turned a state monopoly over to the tender mercies of Telecom’s new owners for peanuts, and without putting any safeguards for consumers (or for business) in place. It was a situation that couldn’t last. The Lange government had created a monster, and National’s Maurice Williamson sat by idly watching this out of control corporate beast pile up the profits at everyone else’s expense, for the entire 1990s.

Yet ultimately, and by her own account, Gattung was finally outfoxed by David Cunliffe and his Boy Scout wiles, for goodness sake. The current plight of Telecom, now that its near-monopoly advantages have crumbled, is an indication of how easy it would have been to run the company in its heyday. A relatively adept chimp – or a robot with no discernible human emotion? – could have managed Telecom during the 1990s. The reason Reynolds is getting paid more – by the wacky logic of the global CEO market – is because running Telecom is now a harder job to do, and now has to earn its keep. I’m not trying to justify Reynolds’ pay packet at all – and his bonuses should be put on ice – but it is the same logic that Gattung once used to employ, when it suited her.

Gattung’s clanging naivete is best illustrated by her anecdote about then Labour Party President Mike Williams supposedly sounding her out on becoming a Labour MP. Memo to TG: this is a negotiating tactic called messing with your mind. I’d wager that it is her particularly blunt set of personal sensors – rather than gender discrimination – that explains why a local firm recently thought twice about taking her on in a leadership role. Ruth Richardson, Christine Rankin, Theresa Gattung… in each case, these are women leaders with a marked inability to show flexibility, to propose and negotiate compromise deals.

In the early 1990s, Telecom was milking the market advantage it had been handed by Prebble and was delaying its capital investment in new technology. That was one prime reason why New Zealand (and its export effort) have lagged so far behind the rest of the world in broadband take-up – which has been merely one example among many of our telecommunications deficit.

That situation is now belatedly changing, largely thanks to Cunliffe’s reforms. There is such karmic irony in Telecom’s problems with its new XT network. Perhaps if the company had given itself more practice in bringing innovations to market during the 1990s, it would know how to do this sort of thing competently. Perhaps the likes of Gattung and Reynolds might then be able to put up a better argument to justify their ridiculous levels of remuneration, current and past.

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