Spurned Fegan quits Telstra

PAUL FEGAN, the former chief executive of St George Bank, has quit Telstra shortly after being overlooked as its chief financial officer.

By InvestSMART · 21 Dec 2011

By InvestSMART ·
21 Dec 2011

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PAUL FEGAN, the former chief executive of St George Bank, has quit Telstra shortly after being overlooked as its chief financial officer.

The Telstra chief executive, David Thodey, last week passed over Mr Fegan for the post, opting to go outside to appoint AXA Asia Pacific's former chief executive, Andy Penn.

Mr Fegan, who left St George after it was taken over by Westpac, was hired to become Telstra's executive in charge of strategy - including mergers and acquisitions - and corporate services at the start of this year.

Analysts said Mr Fegan's financial services background made him a solid candidate to take over from retiring chief financial officer John Stanhope. This would have put him in strong contention to eventually take on the chief executive role.

Mr Thodey is expected to remain at Telstra for several years. He has steered the group through its complicated negotiations for participation in the national broadband network, improved Telstra's profitability and reclaimed market share.

Other executives widely regarded as candidates to replace Mr Thodey include Gordon Ballantyne, who is in charge of consumer-facing businesses, which account for three-quarters of the group's revenue; Kate McKenzie, who runs pricing, product development and marketing; and chief operating officer Brendon Riley.

Tony Warren will be acting managing director of strategy and corporate services from mid-January. He has played a key role with Telstra in recent years, leading negotiations on the complicated national broadband deal with the government and NBN Co.

In an internal memo to staff, Mr Thodey confirmed that Mr Fegan had resigned, praising him for bringing "a strong commercial focus " to the businesses he ran.

Mr Fegan was unavailable for comment yesterday but told staff, in a memo, Telstra had "strong future momentum" and that he had enjoyed the experiences and challenges of the strategy role.

"Telstra is well positioned to capitalise on the opportunities that these market conditions present," he said.

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Frequently Asked Questions about this Article…

Why did Paul Fegan quit Telstra and what happened?

Paul Fegan resigned from Telstra shortly after he was passed over for the chief financial officer role. Telstra's CEO David Thodey chose to appoint Andy Penn from outside the company as CFO, and Mr Fegan — who had been Telstra's executive in charge of strategy and corporate services — subsequently stepped down.

Who was appointed Telstra's new CFO and where did they come from?

Telstra appointed Andy Penn as its new chief financial officer. Mr Penn is the former chief executive of AXA Asia Pacific and was recruited from outside Telstra.

What role did Paul Fegan have at Telstra before he resigned?

Paul Fegan was hired at the start of the year to lead Telstra's strategy work, including mergers and acquisitions, and to run corporate services.

Did analysts think Paul Fegan was a strong candidate for Telstra's CFO or future CEO roles?

Yes. Analysts said Mr Fegan's financial services background made him a solid candidate to succeed retiring CFO John Stanhope and that taking the CFO role could have put him in strong contention for the chief executive position in future.

Who will take over Fegan's strategy and corporate services responsibilities on an acting basis?

Tony Warren will be acting managing director of strategy and corporate services from mid-January. He has played a key role at Telstra in recent years, including leading negotiations on the national broadband deal.

Which Telstra executives are being mentioned as possible successors to CEO David Thodey?

The article names several executives often regarded as potential successors to David Thodey: Gordon Ballantyne (who oversees consumer-facing businesses), Kate McKenzie (who runs pricing, product development and marketing), and chief operating officer Brendon Riley.

How has David Thodey influenced Telstra’s performance and major projects?

According to the article, David Thodey has steered Telstra through complicated negotiations over participation in the national broadband network, improved the group's profitability and helped Telstra reclaim market share. He is expected to remain at the company for several years.

What did Telstra and Paul Fegan say about the company's outlook after his resignation?

In an internal memo, David Thodey praised Mr Fegan for bringing a 'strong commercial focus' to his roles. Mr Fegan told staff he had enjoyed the strategy role and said Telstra had 'strong future momentum,' indicating both the company and Mr Fegan spoke positively about Telstra's prospects.