Dr Reynolds was being paid the full incentive in cash and shares at 1.75 times his base salary of $1.75m a year. The bonus is payable next month.
Telecom chairman Wayne Boyd said Telecom had given Dr Reynolds the maximum bonus for an outstanding first full year in which he had negotiated Telecom obligations with the Government, The New Zealand Herald reported today.
Last week Telecom reported a 43.9 percent fall in net profit to $398m for the year to the end of June, although the company highlighted an adjusted net earnings figure, which fell 32 percent to $483m.
Mr Boyd said Dr Reynolds' deal with Telecom allowed the company to pay between 100 percent and 175 percent of his basic pay as a performance incentive.
The incentives are paid as 60 percent cash and 40 percent restricted shares.
On top of his $1.75m and performance incentive of $3.06m, he will receive special travel payment for his family to travel to and from Britain.
Details of Dr Reynolds' package, and some other Telecom pay deals, were included in the company's annual report for the year to June 30.
A Telecom spokesman confirmed Dr Reynolds' package amounted to more than $5m.
The Herald said Dr Reynold's package was a new record for a chief executive of a New Zealand public company.
While former Telecom chief executive Theresa Gattung picked up $5.4m in 2007, that was due to a special one-off payment of $1.8m because her contract ended early.
