‘Like a politician’: Telstra chair grilled over outage as investors overwhelmingly back executive pay

Telstra’s chair has faced a grilling over the financial fallout from July’s nationwide outage, despite shareholders overwhelmingly backing executive pay at the telecommunications giant’s annual general meeting.

Investors approved Telstra’s remuneration report with 98.46 per cent support on Tuesday, even as shareholders demanded to know what the failure would cost them and whether the board had done enough to prevent another.

The July 8 outage disrupted mobile services, payment systems and regional trains, leaving more than 600 Triple Zero calls unable to connect.

“We know we let our customers down in July, and we have taken full accountability for this,” chief executive Vicki Brady told shareholders.

The board has cut $607,000 from Ms Brady’s bonus and stripped nine other executives of a combined $1.3 million in incentive payments.

Chair Craig Dunn defended the cuts but conceded Telstra had fallen short. “We fell short of what people rightly expect from us, and it should not have happened,” he said.

Long-time shareholder Peter Stump demanded to know how much the outage would cost Telstra’s “mum and dad” investors, warning compensation payments could eat into dividends.

Mr Dunn said Telstra had received about 33,000 complaints or requests for redress, with 99 per cent dealt with. He did not disclose the compensation bill.

Mr Stump also accused the chair of leaving acting chief executive Michael Ackland to face reporters alone while Ms Brady was on holiday.

“You, as the chairman of this company, should have stepped up, supported Michael,” he said, insisting Ms Brady was “entitled to have a bloody holiday, for God’s sake”.

Mr Dunn defended Mr Ackland’s performance, citing company protocols that made the acting chief executive its public spokesperson.

Another shareholder accused the chair of sounding “like a politician” when explaining the board’s response.

“I’m sorry if I sounded trite. I don’t mean to be,” Mr Dunn replied.

He acknowledged Telstra had failed to give its network timing system sufficient priority, compromising oversight and engineering attention.

A Telstra-commissioned independent review completed in September found incorrect date information had spread through the mobile network after planned maintenance.

A Senate inquiry has separately recommended the Federal Government consider transferring responsibility for answering and routing Triple Zero calls to a statutory authority. No decision has been made.

The Australian Communications and Media Authority is still investigating whether Telstra breached its obligations during the outage, with findings pending.

Australian Shareholders’ Association chief executive Rachel Waterhouse, representing more than 1000 investors holding $69 million in shares, pressed directors on how they would verify the network repairs.

Mr Dunn said the board had established committees to oversee the initial response and monitor management’s implementation of the review’s findings.

Sharesies Australia head of capital markets Jacki Neumann said the bonus cuts were an important “accountability signal”, but investors needed proof the underlying failures had been fixed.

“The regulator is still investigating the outage, and because Triple Zero access was affected, the stakes go beyond a fine,” she said.

Ms Neumann said Telstra’s decision to tie some executive bonuses to measurable artificial intelligence projects would give investors another test of management’s performance.

“The question is whether those projects cut costs or lift revenue without putting the network at risk,” she said.

The shareholders’ association backed Ms Brady’s $6.8 million remuneration package after Telstra’s annual profit rose 2.7 per cent to $2.4 billion.

Investors also backed two grants of share rights to Ms Brady with more than 98 per cent support, while director Maxine Brenner faced the largest protest vote, with 11.45 per cent opposing her re-election.

Telstra shares fell 0.75 per cent in early trading, leaving them down about 5.5 per cent since the outage.

Ms Brady maintained Telstra’s August financial guidance, with planned investment in its Aura fibre network and satellite services reaching about $1.8 billion through 2027-28.

Ms Neumann said Telstra’s challenge was balancing shareholder returns with essential network spending.

“What investors want now is evidence that spending is paying off, in earnings and in service.”