Sharebroking firms have been quietly selling their clients out of Telecom shares since late last year when the first XT mobile phone network failure became public in December.
Since then, individual investors have been selling out of the shares as the XT failures continue.
The only private shareholders remaining appear to have been there since the company first listed and retain their faith that the company will recover.
Chief executive Paul Reynolds started on September 27, 2007, when the share price was $4.44.
Yesterday, the shares were hovering around $2.35 before closing at 5pm at $2.30 after reaching a low of $2.28.
Shares reached a low of $2.19 on November 7, 2008, under the watch of Dr Reynolds.
The Otago Daily Times yesterday canvassed the opinions of financial industry leaders about the future of Dr Reynolds with Telecom, suggesting it was time he put his hand up and said goodbye.
Unanimously, the people spoken to believed Dr Reynolds should stay because there was no-one else available with his experience to work on fixing the problem and there were some major questions around how much of the problem he inherited from decisions made before he arrived.
Frank Mount, Telecom's chief transformational officer who received nearly $1 million in base salary and cash incentive in the year ended June 2009, took the fall yesterday.
Dr Reynolds said it was in the interests of Telecom's customers, its team and New Zealand that he regretfully accepted Mr Mount's resignation.
Mr Mount was praised for the successful delivery of Telecom's Crown undertakings schedule on operational separation.
Dr Reynolds acknowledged under questioning that the resignation was directly related to the XT failure.
On Monday, Alcatel-Lucent, the French firm responsible for installation of the troubled mobile phone network, announced the resignation of its New Zealand head of operations, Steve Lowe.
But the time for saying sorry has passed.
Dr Reynolds needs to get this problem fixed and quickly.
Telecom's board has been quiet up to now but they should be representing the interests of the shareholders - all of them.
Wayne Boyd is paid $435,000 to be chairman of the telecommunications company.
Total director remuneration for the year ended June was nearly $1.3 million but that did not include an extra $1.06 million in retirement allowances paid to three directors.
Mr Boyd, who has a home near Arrowtown, will have been affected by the outages in the XT network and could have made some public comment before now on the matter affecting many of his friends and neighbours.
One director who should be considering his future is Ron Spithill, a former senior executive of Alcatel.
Before being appointed to the Telecom board, Mr Spithill had a 43-year career with the company and was the senior Alcatel executive with responsibility for Australia when Telecom signed its landmark network outsourcing deal with the company in 2003.
He was paid $175,000 in fees in the past year.
The danger for Telecom could be that the people responsible for the close alignment with Alcatel have already departed.
Some are already running other New Zealand companies.
Someone has to take responsibility for the XT debacle but it will not be Dr Reynolds.
If too many of his team jump overboard, then New Zealand's largest listed company could limp along for another year.
However, shareholders will be surprised if Dr Reynolds does not feel his base salary of $1.75 million is adequate recompense this year.
The pay package
For the 12 months to June 30, Telecom chief executive Dr Paul Reynolds reportedly earned (according to Telecom's annual report):
• $1.75 million in base salary
• $3.06 million through a performance incentive scheme; the maximum possible (60% in cash, 40% in restricted shares, payable this August)
• $243,950 in special costs, including costs for relocating from the UK.
• $2.1 million through a performance rights scheme (paid in the form of 668,790 Telecom shares, which will vest over the next three years)
In total, Dr Reynolds made more than $7 million (although that amount could vary depending on Telecom's performance on the NZX during the next three years). Dr Reynolds compensation surpasses Telecom's previous record, held by his predecessor Theresa Gattung with $5.4 million (including a $1.8 million exit package).
