Telstra cuts employee share scheme as CEO Andy Penn continues to slash costs

Getty: Telstra CEO Andy Penn
  • Telstra staff will no longer be entitled to 100 free shares with a satisfactory performance review.
  • The company’s own executives had their remuneration policy slapped down by shareholders last year.

Telstra has slashed its employee share scheme as chief executive Andy Penn continues to cut costs at the telecommunications behemoth.

A company spokesperson has confirmed employees at the telco who receive satisfactory ratings on their performance reviews are no longer entitled to 100 free Telstra shares.

The news comes not long after the company’s own board was slapped with one of the largest protest votes in ASX history against its executive remuneration policy. 62% of Telstra shareholders voted against the plan, signalling that Telstra executives were paying themselves too much considering the performance of the company.

While the performance shares for Telstra staff were issued for free, they’re not worth what they used to be. Telstra shares are trading down at $3.28, having hit $4.54 in April 2015.

Penn, formerly Telstra’s chief financial officer, has been slashing costs at the telco as it tries to find a new revenue stream. The national broadband network company NBNCo is eating into Telstra’s profits as its wholesale customers mover over.

In June last year, Telstra announced 8000 job losses as part of Penn’s T22 strategy to make the company more nimble.

“As we transform under our T22 strategy, we are reviewing all of our business and that’s included our Employee Share Plan, which has been put on hold,” a spokesperson for Telstra told Business Insider Australia.

“This means we won’t be offering 100 shares this year to employees. As we become more progressed in our transformation, these employee share plans will be reviewed again.

“We continue to have a comprehensive range of reward and recognition programs in place to recognise employee contributions.”

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