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.