Howard foists Cousins onto Telstra, despite strong opposition

Stuart Corner
Wednesday, 15 November 2006 10:35

IT Industry - Deals

The Federal Government has angered Telstra's major shareholders by using the dying days of its controlling shareholding to force onto a reluctant board a highly unpopular director of prime minister John Howard's choosing and to approve the remuneration report despite serious concerns by shareholders.

Votes against Cousins' appointment amounted to 31 percent of the non-government shares. More significantly the 1.83 billion shares that were voted against his appointment represented 88 percent of the non-government votes cast in the ballot. Just eight percent of non-government shares were voted in favour of Cousins' appointment.

This, for the Government, highly embarrassing result, lead the Financial Review's Chanticleer columnist to call for Cousins (who did not attend the AGM) to "seriously consider resigning from the Telstra board," saying that his appointment "breaks every principle of good board governance."

It is widely believed that the Government forced Cousins on the board at the behest solely of prime minister John Howard. His Government also used its majority shareholding to ensure approval of the remuneration report and the re-election to the board of the remuneration committee chair, Charles Macek. This despite strong opposition from a number of bodies representing institutional investors and despite Howard, some time ago encouraging shareholders to vigorously question CEO Sol Trujillo's pay deal at the AGM.

There has been concern expressed that the remuneration report, which details the performance incentives and other aspect of the pay packages of the top tier of Telstra executives, is short on details. Shadow finance minister Lindsay tanner, claimed that it "lacks transparency".