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Telstra boss Andrew Penn is leaving the telecom giant after more than seven years in the top job, as it faces increasing pressure from TPG and Optus, plus keeping internet-hungry consumers satisfied.
Mr Penn will hand the reins to chief financial officer Vicki Brady on September 1, who will become the telco’s first female chief executive, beating out both internal and external candidates for the role.
Mr Penn started with Telstra as CFO in 2012 and was appointed CEO in 2015, leading the telco through several major transformations including its T22 cost-cutting program, in which the company slashed $2.5bn in costs and sacked around 8000 workers.
Ms Brady will now lead the telco through its T25 strategy, which has been described as a “strategy for growth”, and will face challenges including renewed competition from Telstra’s rivals, along with executing new initiatives including an energy product, and a possible looming Foxtel IPO.
“Andy has led Telstra during a period of significant change and will be known for his courage in setting a bold ambition through the T22 strategy to deliver a transformed experience for customers, shareholders and employees,” Telstra chairman John Mullen said in a statement.
“There is no doubt the 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.”
Mr Penn – who along with Telstra chairman John Mullen has faced questions over succession planning given their extended tenures – told The Australian last month at the company’s most recent earnings call that he had no intention of moving on. But Telstra had a team with ample talent in the event he was “knocked over by the proverbial bus”, he said.
“I am incredibly proud to work with a very capable team. And your job as CEO, regardless of your own plans, is to make sure that there is always succession within the team,” he said last month.
“And I’m lucky to work with the most talented management team in the country.
“There’s plenty of succession opportunities in there. In the meantime, I’m very happy doing what I’m doing.”
Mr Penn there was no specific moment he decided that it was time to move on, but that the leadership transition was ‘the right thing for the company’.
“These decisions obviously in life are always difficult…It’s mixed emotions. I love this job. It’s an incredible privilege and I love the company,” he said.
“But also what’s most important for me is to do the right thing for the company, for all of our stakeholders, and I think this is an excellent transition point. We’re on the cusp of delivering T22; we’ve completed a very, very significant transformation and we’ve announced what comes next.”
As CEO, Ms Brady will take home $2.4m per annum in fixed remuneration, inclusive of super contributions – on par with Mr Penn’s fixed payout and a significant jump on the $1.2m she was paid, according to the telco’s 2021 annual report.
Ms Brady began her career with KPMG and also served as a senior executive with Optus and its parent company SingTel before joining Telstra
Mr Mullen said that a number of external candidates had been considered to replace Mr Penn, but that Ms Brady “could not be more qualified” for the job. Both internal and external candidates were considered to replace outgoing CEO Andy Penn, and the chairman said he hopes to minimise any disruption from unsuccessful internal candidates.
“Contemplating this decision, we started to canvass the market, and we extensively canvassed domestic candidates as well as international candidates around the world,” Mr Mullen told media and investors on a conference call.
Mr Mullen said he personally met with quite a number of candidates, but ultimately Ms Brady was unanimously supported by the telco‘s board.
“Specifically about internal versus external, I think one would always rather go with an internal candidate, but never at the cost of quality or professionalism,” he said.
“I‘d be very disappointed if there was any [internal] fallout from from these changes but time will tell.”
During his time as CEO, Mr Penn had developed a strong team to ensure the ongoing successful leadership of the company, he said.
“The greatest testament to this is the ability to announce an internal successor to the role of CEO and I am thrilled to be able to announce Vicki in the role today,” Mr Mullen said.
