Telstra execs lose bonuses over network outages

Telstra's senior executives lost out on their annual customer service bonuses this year as punishment for a damaging series of network outages in the first half of 2016.

Andy Penn

The telco's CEO Andy Penn and chairman John Mullen told shareholders at the telco's annual general meeting today that the "network service interruptions" played a large part in the incentives not being paid out to executives.

They did not detail how much in dollar terms had been withheld in total. It means senior Telstra executives only received around 40.5 percent of their maximum short-term incentive opportunity in 2016.

“.. overall in 2016 Telstra delivered solid results for shareholders, however we did not make enough progress on improving customer service," Mullen said.

"The remuneration outcomes for the 2016 financial year therefore reflect this underperformance and, as a result, no incentive payments were made to senior management in respect of customer performance."

While Mullen apologised for the impact of the network outages on customers, he insisted the telco's networks were solid.

“There is nothing, I repeat nothing, inherently wrong with Telstra’s core networks,” he told shareholders.

The telco said it would add a new "service experience index" to its incentive plans in 2017 that will "measure the experience that our customers receive each time they actually use us or are in contact with us to fix a problem", Penn said.

Telstra in August committed to spending an extra $3 billion over the next three years to improve its networks and customer experience. It also revealed at the time that its net promoter score had fallen by four points as a result of the network troubles.

It had previously pledged to invest $250 million over the next 12 months on its networks.