Telstra chief executive Vicki Brady took home a $6.8m total pay package for the year ending in June, according to the company’s financial results released on Thursday, even after the board docked 20% of her bonus over a nationwide network outage in July. The penalty reduced her bonus by $607,000, yet she still received a $700,000 pay rise compared to the previous year’s total of $6.1m.
Executive Pay Cuts Follow Nationwide Network Failure
The Telstra board met on Monday to decide on executive compensation following heavy political criticism over the July network failure, which affected nearly half of all calls and data sessions across the country. According to the financial report, the outage was traced to a missing software update on a key time-keeping system.
Alongside Brady’s penalty, the company docked 20% of the bonus for its former global networks group executive and 10% from all other senior executives. These reductions shaved a combined $1.3m from executive pay. In total, senior executives were paid $20.7m for the financial year, according to company records.
Addressing investors on Thursday, Brady acknowledged that Telstra had let customers down and accepted full accountability. “We have an initial understanding of the root cause of the outage and have taken steps to address that,” Brady said, adding that an external expert was completing an independent investigation.
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Telstra received compensation requests from more than 30,000 customers following the July incident, paying out nearly $1m so far while assessments continue, according to statements made by CEO Vicki Brady.
Financial Results and Rising Mobile Revenues
Wednesday’s earnings figures showed Telstra’s annual profit climbed to $2.4bn, up from $2.3bn the prior year, resulting in a dividend payout of 21 cents per share. Income from mobile phones rose by $300m to reach $11.3bn. Customers faced price increases during the period, with prepaid handheld plans rising 7.2% and postpaid plans climbing 3.4%.
In May, Telstra raised most postpaid plans by $4 a month and prepaid options by $5 a month. Despite these hikes, the company sold 1m more mobile plans, bringing its total services in operation to 26m. However, direct postpaid subscriptions dropped by 7,000, while prepaid additions reached 46,000 and wholesale subscriptions grew by 235,000.
Brady noted that the wholesale business—which powers brands like Aldi and Woolworths—and prepaid offerings drove subscriber growth at the value-conscious end of the market. “The wholesale offers give customers a lot of choice… because we fully appreciate and understand that cost of living is a big pressure on a lot of people in the country,” Brady told reporters.
Job Cuts and Market Response
To manage expenses, Telstra reduced its workforce by 1,219 employees over the year, leaving a total of 29,334 staff members by June. While Brady acknowledged a small impact of customers leaving the telco after the July outage, she stated there was no material impact on overall customer retention or new sign-ups.
Following the earnings announcement, Telstra’s share price dropped from $5 to $4.875 in early trading. The decline shaved $1.4bn from the company’s market value, bringing it down to $54.3bn.
Frequently Asked Questions
Q: How much was Vicki Brady paid for the year ending in June?
A: Vicki Brady received a total pay package of $6.8m, which included a $700,000 increase over the previous year despite a 20% penalty applied to her bonus.
Q: What caused the July network outage at Telstra?
A: Telstra attributed the nationwide network failure to the lack of a software update on a key time-keeping system.
Q: How much compensation has Telstra paid to customers?
A: More than 30,000 customers requested compensation, and Telstra has paid out nearly $1m while continuing to assess remaining claims.
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