Telstra handed chief executive Vicki Brady an 11 per cent pay rise to $6.8 million last year, a bumper payday delivered against a backdrop of 1200 job cuts, and just weeks before a catastrophic network outage cut off Triple Zero calls.
The telco’s direct workforce is now 4 per cent smaller, at 29,334, and Telstra has signalled it will keep cutting as it simplifies the business. The job losses lifted its redundancy bill by $92 million to $206 million.
That cost-cutting helped drive a full-year result that has delivered shareholders a bigger dividend and a fresh $1 billion share buyback.
Telstra’s full-year results to June 30 showed net profit rose 2.7 per cent to $2.4 billion, and core earnings climbed 3 per cent to $8.2 billion, even as group revenue dipped 0.8 per cent to $22.9 billion.
Revenue at Telstra’s consumer arm, its largest, rose 0.7 per cent, and its infrastructure arm, InfraCo, rose 3.4 per cent. Those gains offset a 5.2 per cent fall in the enterprise business and an 11.3 per cent slump in the international unit.
The mobile division remained a powerhouse. It added 274,000 users, though most of these were wholesale customers on rival brands using Telstra’s network, while its own retail postpaid handheld services actually went backwards. The average monthly postpaid bill rose 3.8 per cent to $56.20.
The board lifted the full-year dividend by 10.5 per cent to 21 cents a share, 90.5 per cent of which is franked. The planned $1 billion buyback follows the $1.25 billion program completed in June. Brady said the buybacks sat “alongside increased capex and strategic investment” and allowed Telstra to lower its cost of capital.
Addressing the July network outage, Brady said the company takes full responsibility and has hired an external expert to investigate.
“We know we let our customers down in July,” she said. “We have taken full accountability for this.”
Brady said Telstra had an initial understanding of the root cause and had taken steps to address it, and would be “transparent about those findings and the actions we take as a result”.
She also acknowledged the outage had changed the conversation about the network. “Network resilience was brought into sharp focus,” she said, adding that Australians’ reliance on connectivity “will only grow”.
The board did dock her for it. Directors cut Brady’s individual performance multiplier by 20 percentage points, stripping $607,000 from her bonus and leaving her with a short-term incentive of $2.762 million. Her total pay still rose 11 per cent.
Then-group executive of global networks and technology Shailin Sehgal took the same 20-point reduction. Every other senior executive lost 10 points, taking a further $1.29 million out of the leadership team’s bonus pool. Because the external investigation was still running when remuneration was signed off, the board has reserved the right to claw back more from FY27 pay once the findings land.
Telstra has ruled out automatic payouts for the July blackout. It recently told a Senate hearing that just over 8000 claims resulted in slightly more than $100,000 being handed out, all in the form of bill credits.
Looking ahead, Telstra expects underlying earnings to grow to between $8.5 billion and $8.8 billion next year. To support that, it plans to spend up to $3.65 billion on capital works, with what it called a lift in network investment to apply lessons from the outage. However, the cost of major infrastructure projects, including its Aura fibre network, has blown out by $200 million to roughly $1.8 billion, driven by inflation and difficult site conditions.
More to come
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David Swan is the technology editor for The Age and The Sydney Morning Herald. He was previously technology editor for The Australian newspaper.Connect via X or email.From our partners
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