New CEO high-performance package

Investors will hope the appointment of Simon Moutter as chief executive of Telecom will bring...
Investors will hope the appointment of Simon Moutter as chief executive of Telecom will bring them rewards. Photo by the NZ Herald.
The appointment of Simon Moutter as the new chief executive of Telecom will have investors hoping for many happy returns as Mr Moutter returns to an industry he knows well.

Telecom announced yesterday that Mr Moutter would replace Paul Reynolds as the chief executive of Telecom. He takes up his new role on September 1.

Mr Moutter left Telecom as chief operating officer in 2008 to become chief executive of Auckland International Airport, steering one of the country's highest-profile listed companies through some difficult times, including an extended global financial crisis.

He returns to a different company with Dr Reynolds overseeing the structural separation of Telecom into new Telecom and Chorus, both of which are listed on the NZX.

Craigs Investment Partners broker Chris Timms said Mr Moutter was good for Auckland Airport and would be good for Telecom.

"It will be a disappointment for Auckland Airport but a bonus for Telecom," Mr Timms said yesterday.

"That has been reflected today in the share price with Telecom rising half a cent and airport falling 1.5c."

During his time at Auckland Airport, the company's share price had risen from $1.96 on the day he took over on August 4, 2008, to close on Friday at $2.55.

Dividends paid during Mr Moutter's time as chief executive had also increased.

Figures supplied by Mr Timms showed that during the period, Auckland Airport shareholders had received a 52% increase in returns through share growth and gross dividend income, a level of performance Telecom investors would certainly want him to replicate.

The new Telecom had a sole focus on customer solutions but without the backbone of infrastructure it once had. Mr Moutter had provided the same sort of customer focus and service at the airport that was needed in a highly competitive telecommunications industry.

"He can start with a clean slate and decide how to operate the new company," Mr Timms said.

Fund managers said Mr Moutter had a name for efficiency and was not afraid to pursue growth.

In 2010, Auckland Airport bought a 24.5% stake in North Queensland Airport, which operates the Cairns and Mackay Airports in Queensland, for $A132 million ($NZ167 million).

In the same year, the company controversially bought a one-quarter stake in Queenstown Airport for $27.7 million.

Telecom chairman Mark Verbiest said Mr Moutter's knowledge of the telecommunications industry in New Zealand was strong and deep and he was a proven chief executive of a significant listed organisation.

"As such, the Telecom board is confident Simon has the right skill-set to lead Telecom as it adapts to the opportunities and challenges driven by significant changes to its structure and operating environment."

Mr Moutter had a proven ability to lead companies in developing and delivering compelling services for customers, Mr Verbiest said.

He was instrumental in the transformation of Telecom in the early 2000s at which time the company pushed strongly into the IT services sector with the acquisition and expansion of Gen-i, the turnaround of Telecom mobile and the introduction of nationwide broadband services.

In a statement, Mr Moutter said he was excited to be returning to Telecom.

Auckland Airport chairwoman Joan Withers said chief financial officer Simon Robertson would act as chief executive once Mr Moutter left at the end of his four-month notice period.

The board would immediately start a process to find his replacement.

The appointment of Mr Moutter had ended speculation that Gen-i chief executive Chris Quin was the top contender for the job.

Outgoing Telecom chief executive Dr Reynolds replaced Theresa Gattung in 2007 after the company's relationship with the government broke downand former telecommunications minister David Cunliffe forced operation separation between the network and retail units. Dr Reynolds was brought in after overseeing a similar split at BT, in the United Kingdom.

 


Telecom chief's rewards

Simon Moutter

• A basic salary of $1.3 million with cash and share incentives based on meeting performance targets. It may be lifted if he exceeds the board's targets.

• A long-term performance incentive of up to $1 million through share rights.

• Receives a one-off grant of share rights at commencement with a value of $750,000. The share rights have a zero-exercise price and are subject to shareholder approval.


dene.mackenzie@odt.co.nz

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