The newly released Telstra annual report has again drawn attention to the sheer size of the pay package offered to its ex-CEO.
David Thodey, Telstra’s former CEO, earned 163 times the average telecommunications worker’s salary in the 2014-15 financial year.
According to Telstra’s most recent annual report, Thodey was given a total pay package of over $14.5 million. This included $2.65 million in base salary, $3.4 million as a short-term cash bonus and $7.5 million of long-term bonuses.
He also received about $910,000 in shares accessible under the short-term bonus plan plus was offered about $12,000 of home security and car parking services.
This $14.5 million was a 13% increase from the $12.8 million that he earned in the 2013-14 financial year. This, in turn, was a 33% increase from the $9.6 million he was given in the 12 months prior to that.
The Australian Bureau of Statistics says the average salary of a fulltime worker in the information, media and telecommunications industry is approximately $89,000 per year. This gives us an interesting comparison with Thodey earning this same amount in just over two days.
Thodey has spoken out previously about his level of salary. "I can't sit here and defend my salary against all the guys who are out there working every day and I wouldn't try to," he told Fairfax Media in April.
"I think there's a real issue with income disparity between what an average person gets and some of the really big salaries."
John Cowley, a spokesman for the Australian Shareholders Association, explained why Thodey’s level of pay was so high. "The reason is that the benefits he's getting from his role at Telstra are based upon shares that were $3 when he started and $6 when he finished," he said.
Thodey stepped down as CEO of Telstra in April 2015 and begins a five-year position as chairman of CSIRO in November.
According to Telstra’s annual report, he will continue his employment without any change in pay until 21 August, a period of six months after his resignation. He will also be given a short-term incentive payment of more than $370,000 for 2016.
