Telecom beats critics with early release of Reynolds’ pay details
Sept. 9 (BusinessDesk) – Telecom Corp. chief executive Paul Reynolds was paid $5.2 million in the year ended June 30, more than 100 times the average wage, according to figures released by New Zealand’s biggest phone company today.
Reynolds’ total remuneration jumped about 74% from the previous year, when Telecom had to contend with the costs and PR fallout of the outages on its XT network
The former BT executive, who helped oversee a similar operational separation at the U.K. phone company, will leave Telecom by June 30, 2013, the company said last month. It expects to split its business into separate retail and network entities by the end of November.
Chairman Wayne Boyd, who is also departing the company, said Reynolds’ pay in the latest year reflects the fact that he has met short and long-term objectives.
“Telecom has experienced a very strong year, including reaching agreement with the Crown for partnership on both ultra-fast broadband and the rural broadband initiative, at the same time as delivering a strong operational performance,” Boyd said.
“It is the view of the board the Dr Reynolds has more than achieved the objectives that were set for him and his team at the start of the financial year, and this is reflected in his remuneration for the period,” Boyd said.
Reynolds has received a total of $16.3 million in remuneration since he started in September 2007, including cash, shares and special payments, Telecom said.
In that time shares of Telecom have shed 44%.They rose 0.2% to $2.48 on the NZX today.
The company is rated a ‘hold’ based on the consensus of nine analyst recommendations compiled by Reuters.
The phone company won the lion’s share of the government’s broadband rollout after proposing structural separation in a bid to shed the heavy regulatory burden of operating a copper-line network monopoly, and win tax-payer funding to build a nationwide fibre network.
That bid was successful, and Chorus won $929 million of the $1.35 billion on offer from the government to roll-out an ultra-fast broadband network. Chorus expects it will have to spend $470 million and $670 million of its own money over the next eight years on construction.
Once the split is complete, New Telecom will be the bigger of the two companies, with adjusted pro-forma earnings before interest, tax, depreciation and amortisation of $1.125 billion on $5.1 billion of sales in the 12 months ended June 30, while Chorus made $676 million on $1.1 billion of revenue.