We always knew Sol Trujillo was a smooth talker. Now we know just how smooth. His replacement at Telstra, David Thodey, will be paid at least $1m, and possibly as much as $4m, less a year.
Details of Thodey’s contract, released to the ASX this morning, actually say more about Trujillo than his successor. Trujillo may not have been able to bend the government to his will but he could sure strike a good deal with a pliant Telstra board.
Thodey, who colleagues say is a good negotiator, will be paid $2m a year. Trujillo got $3m. Thodey could top up his pay with another $7.2m in bonuses if he hits certain targets. Trujillo’s bonuses could run to $10m. If Thodey, and Telstra, hit every target in the coming year, he could earn up to $9.2m. Trujillo took home $13.4m last financial year.
Oh, and Trujillo got a $1m sign-on bonus and relocation costs when he moved here from the US to take on the Telstra gig in 2005. No such luck for Thodey, who’s already a Telstra executive and lives in Sydney.
True, it’s a different world to 2005. And the Telstra board, chastened after the failed Trujillo experiment, would have been crucified if they’d been as generous with Thodey.
But today’s contract shows just how desperate the Telstra board, and chairman Donald McGauchie in particular, were to get Trujillo after they axed CEO Ziggy Switkowski without having a replacement in mind.
Everyone – shareholders, staff, the government and Telstra’s rivals – hope this is a new era for the company after a bruising four years. That new chair Catherine Livingstone has managed to set more reasonable package for her top-paid executive is a good start.
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