Telstra punters voice anger

Ms Livingstone and chief executive David Thodey fielded scores of questions from angry and bewildered retail investors at the company's annual meeting in Sydney yesterday.

It was the first opportunity small shareholders have had to grill the duo since Telstra's world was turned upside down by the Federal Government's decision to build a $43 billion national broadband network (NBN) and simultaneously legislate to force the separation of Telstra's wholesale and retail arms.

Institutional shareholders have waged a campaign through the media against any Telstra acceptance of the Federal Government legislation, which is aimed at getting Telstra to voluntarily hive off its infrastructure, but is backed with a suite of punitive measures.

The 1000 investors who trekked to the Sydney Convention Centre would have come away disappointed on many scores, however, with the chairman and chief executive sticking to the mantra that negotiations with the Government were constructive, but that the company would not agree to anything destructive of shareholder value.

"We have to be realistic . . . and have to understand the Government's powers to bring that legislation into effect," Ms Livingstone said when one shareholder urged her to withhold co-operation from the Government and let the NBN "wither on the vine".

Although the vote in favour of accepting the remuneration package was 95.88 per cent, there was anger at executive payments. Australian Shareholders Association director Michael Perry said the $9 million paid to former chief executive Sol Trujillo for his final 10 months at the company was totally unacceptable.

"We've decided not to oppose the remuneration report, but we do have some serious concerns," Mr Perry said. "I believe the contract with Mr Trujillo was excessively generous, in both terms and quantum and this resulted in a very high payment to him . . . I would like you to take that on board."

Mr Perry said it was also unacceptable that Telstra networks boss Michael Rocca had received a $1 million "retention" payment without it being approved by the remuneration committee, and was in line to receive another.

Ms Livingstone said payments such as that to Mr Rocca now had to be cleared by the remuneration committee, and that the company had no choice but to honour Mr Trujillo's contract, including bonuses.

Ms Livingstone also emphasised that the executive bonus scheme has been restructured, and that Mr Thodey is being paid considerably less than Mr Trujillo was.

In other business, John Stocker, John Zeglis and Geoffrey Cousins were re-elected to the board, while John Stanhope, Steve Vamos and Russell Higgins were elected as directors.