I nearly choked on my Vegemite on toast this morning when I read what former CEO of Telecom New Zealand Ltd [TEL.NZ] Teressa Gattung said of current executive pay at the company.
"Now that I'm long gone I, with the rest of the country, wonder about the propriety of a company making half the annual profits it did a few years ago but paying its executives considerably higher salaries."
Come on, lets have some facts here instead of the marketing spin that we are getting from Ms Gattung, so she can sell more copies of her book Bird on a Wire. This woman has an overinflated sense of her own competence. As she did as Telecom CEO she is blaming everyone else for problems she helped cause; its politicians, its competitors, its circumstance, its "being a woman" - yes she said that.
"Mr Reynolds, as a male, has faced less scrutiny than she, despite the furore surrounding his $7m salary and incentive package..."
Sure, executive pay is too high given the profit levels and mess the company is currently in over the failing XT network and other problems related to underinvestment over the last 20 years but given that Ms Gattung was CEO when Telecom bought AAPT, the billion dollar plus loser Australian Telecom business and she was at the genesis of Telecom's current problems, shows not only a lack of class coming out now she is putting a book out but also indicates a lack of self awareness.
As bad as Paul Reynolds and the board at Telecom - some of which were on the board when Ms Gattung was at the helm - are currently performing Ms Gattung was the architect, not only of the current woes but also of that awful, the "customer is the problem culture" that is still alive and well.
In fact Ms Gattung admitted she had been deliberately confusing her customers (audio) to keep revenues up.
Ms Gattung under invested as CEO in Telecom from October 1999 to June 2007 and while shareholders received handsome dividends, very little of that moola made its way back into the business. She made the decision to go with the CDMA technology behind the 027 network when advised that she should have gone with GSM, the technology used by most of the rest of the world. As a direct result of that Telecom customers couldn't roam on their mobiles and Vodafone, at that time multiple times smaller than Telecom, ended up taking the bulk of the mobile market with 5 years or so.
The reactionary way the business was run under Gattung meant that she protected its monopoly status in the face of the treat of regulation from Government and years latter they were struck with separating the business from Government because they wouldn't move sooner to open competition. This stance also meant that New Zealanders were stuck with slow internet services, and the slowest uptake of broadband in the world because it was so expensive. This still lingers today with slow, expensive internet connections.
Teresa's marketing background has come to the fore this week and the spin she is putting on her place in Telecom's downfall should be taken with a healthy dose of salt because it simply is more garbage coming from an individual who doesn't have a sense of her own self and her part in the destruction of a company that could have done much better than it has if it was managed in a competent manner and in the hands of an individual who knew something about running a business with a long-term view, focus on customer service and the ability to be understood without having an interpreter explain her gobbledygook.
Ironically Ms Gattung left Telecom in 2007 with the highest payout ever made in this country of $5.4 million when the share price was seriously dropping and profits were falling.
Telecom NZ @ Share Investor
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