Penn to step down as Telstra chief

Telstra CEO Andy Penn will step down after seven years to make way for CFO Vicki Brady, the company has announced.

Penn's term, which ends on September 1, has been one of dramatic transformation.

Figure 1: Before you go: Telstra CEO Andy Penn restructured the company into three separate entities, and sold off a 49% stake in the tower business for A$2.8 billion ($2.1 billion).
(Source: Telstra)

He steered the company through its largest ever disruption following the loss of the fixed-line access business to NBN Co and has it primed to take advantage of 5G and digital opportunities.

In the words of chairman John Mullen, the creation of the NBN "effectively cut Telstra in half and took away A$3.5 billion of profit and left the company in pretty radical need of transformation."

Penn's T22 plan has stripped out more than A$2.5 billion (US$1.9 billion) in costs, reduced the number of consumer service plans from 1,800 to 20 and shed a third of its workforce. (See Turning point: Telstra declares victory in transformation program.)

In the last 18 months Penn has restructured the company into three separate entities and sold off a 49% stake in the tower business for A$2.8 billion ($2.1 billion). (See Telstra edges Optus with $2.1B tower sale.)

Telstra is the runaway leader in 5G and has expanded into new areas such as health and energy retailing. In its latest financial filing it reported underlying EBITDA growth of 5% and 55% growth in underlying EPS. (See Telstra mobile business powering through in game of two halves.)

"There is no doubt the [T22] strategy has delivered beyond expectations and has laid the foundations for Telstra's recently announced T25 strategy and a renewed focus on growth and innovation," said Mullen.

Brady, 50, joined Telstra in 2016 from Optus, where she had been passed over for the top job. She headed Telstra's consumer business until her appointment as CFO in 2020.

Figure 2: In good company: Telstra CFO Vicki Brady becomes one of just four CEOS of top 20 ASX companies that are women.
(Source: Telstra)

Her task will be to steer the T25 plan, which aims to shed another A$500 million ($376 million) in costs and ride anticipated growth in 5G, fixed-wireless, NBN resale and new digital businesses. (See Telstra targeting A$500M in cuts and 5G growth.)

"With 5G rolling out, we have very clear leadership in 5G, and we have been very disciplined in monetizing that advantage," Brady told Australian Financial Review.

The top job at Telstra is unusually high profile for a telco CEO. Telstra is one of the country's top 15 companies by market cap and revenue and is the most widely held stock.

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It also puts Brady in a select group of female CEOs; just four of the top 20 ASX companies are headed by women. Across the Asia-Pacific region, only four other telcos – Optus, Spark, HKT and FarEasTone – are run by women.

Brady will be paid a fixed annual salary of A$2.39 million ($1.8 million), with bonuses of up to 300% of her salary if she exceeds performance targets.

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— Robert Clark, contributing editor, special to Light Reading