Reynolds forgoes full bonus

Telecom chief executive Paul Reynolds has hit the benchmarks necessary to receive his short-term incentive bonus, chairman Wayne Boyd said yesterday.

But Dr Reynolds has agreed it would not be appropriate for him to receive the full amount, Mr Boyd told shareholders at the company’s annual general meeting in Christchurch yesterday.

The payment would not be appropriate in the current environment, Mr Boyd said.

The level of the short-term bonus was not disclosed, but the company’s 2010 annual report records that a short-term incentive of $900,000 – earned in the year to June 2010 – was scheduled to be paid in August (60% in cash, 40% in Telecom shares).

Dr Reynolds has a long-term incentive scheme spanning a three-year period.
Previously disclosed performance benchmarks for the Telecom chief executive include smoothly managing the organisational separation process, and the performance of the company’s shares relative to other telcos around the world (that is, Dr Reynolds could receive a bonus if Telecom’s shares fall, but less steeply than those of other phone companies).

Telecom’s annual report for its year to June showed that Dr Reynolds’ base salary remained at $1.75 million.

The chief executive’s total remuneration fell from $7 million to $5 million; in large part a function of the fact that 40% of his bonus is awarded in the form of Telecom shares, which have fallen in value.

Special payments creep up
Dr Reynolds did take home more in “special payments” during Telecom’s 2010 financial year.

The annual report records payments of $338,111 for “personal travel between New Zealand and the United Kingdom, gross accommodation payments and obtaining tax advice.”

The previous year, the figure was $243,950.

More earning more than $100,000
Telecom’s annual report also shows the number of employees earning more than $100,000 crept up during 2010 to 2945, up from 2865 in the previous year (out of roughly 8500 employees). For 2008, their were 2505 in the $100K club.

The tail end of the financial year did see the company on a drive to cut 200 management positions, however, which could be expected to reduce the figure for the current year.

The recently completed sale of AAPT's retail division in Australia will also reduce the number in the 100K club.

Telecom's total labour cost fell to $893 million in 2010, down from $909 million in the previous year. 

TELECOM EMPLOYEE REMUNERATION RANGE
(12 months to June 30, 2010. Source: Telecom annual report)

Renumeration range: number of employees
$2,990,001-$3,000,000: 1
$2,260,001-$2,270,000: 1
$1,990,001-$2,000,000: 1
$1,740,001-$1,750,000: 1
$1,430,001-$1,440,000: 1
$1,170,001-$1,180,000: 1
$1,100,001-$1,110,000: 1
$1,010,001-$1,020,000: 1
$980,001-$990,000: 1
$910,001-$920,000: 2
$850,001-$860,000: 2
$820,001-$830,000: 1
$760,001-$770,000: 1
$750,001-$760,000: 1
$740,001-$750,000: 1
$710,001-$720,000: 1
$700,001-$710,000: 2
$680,001-$690,000: 1
$640,001-$650,000: 1
$610,001-$620,000: 1
$560,001-$570,000: 1
$550,001-$560,000: 1
$540,001-$550,000: 1
$530,001-$540,000: 3
$520,001-$530,000: 2
$510,001-$520,000: 1
$480,001-$490,000: 1
$470,001-$480,000: 1
$450,001-$460,000: 3
$440,001-$450,000: 2
$430,001-$440,000: 3 
$420,001-$430,000: 5
$410,001-$420,000: 5
$400,001-$410,000: 3
$390,001-$400,000: 3
$380,001-$390,000: 5
$370,001-$380,000: 4
$360,001-$370,000: 3
$350,001-$360,000: 9
$340,001-$350,000: 12
$330,001-$340,000: 4
$320,001-$330,000: 3
$310,001-$320,000: 9
$300,001-$310,000: 13
$290,001-$300,000: 16
$280,001-$290,000: 26
$270,001-$280,000: 24
$260,001-$270,000: 14
$250,001-$260,000: 23
$240,001-$250,000: 32
$230,001-$240,000: 32
$220,001-$230,000: 55
$210,001-$220,000: 59
$200,001-$210,000: 81
$190,001-$200,000: 84
$180,001-$190,000: 126
$170,001-$180,000: 119
$160,001-$170,000: 157
$150,001-$160,000: 176
$140,001-$150,000: 254
$130,001-$140,000: 290
$120,001-$130,000: 325
$110,001-$120,000: 435
$100,000-$110,000: 497
Grand Total: 2945