New CEO, chairman named in Telstra leadership shake-up

Friday 8th May 2009

David Thodey has been appointed the new chief executive of Telstra Corp., with Australia’s largest phone company opting for an internal replacement for Sol Trujillo, whose term was characterized by clashes with the government over reforms.

Catherine Livingstone will succeed Donald McGauchie who resigned his position as chairman, Telstra said in a statement.

Thodey has been a senior executive at Telstra for eight years, and is currently responsible for the company’s corporate, government and large business clients in Australia, TelstraClear in New Zealand, and the group’s international sales division. Livingstone joined the board in 2000, and will succeed outgoing chair McGauchie immediately. Chief financial officer John Stanhope was also appointed to the board as an executive director.

Thodey “was chosen from among an outstanding group of internal and external candidates,” said new chair Livingstone, in a statement. Outgoing chairman McGauchie “led the board through the transition of Telstra to a fully privatised company” during a complex restructuring of the company, she said.

The company posted its first decline in half-year profit in two years in February, when earnings sank 20% to A$1.7 billion. Trujillo announced his resignation the same day.

Since Trujillo came to Australia’s largest phone company in 2005, the company’s stock has tumbled 36% compared to the benchmark S&P/ASX 200 index’s 9.6% decline.

The shares rose 0.9% A$3.27 in Australian trading today, and its New Zealand stock was unchanged at $4.28.

Peter Willcox also resigned as a director of the company.

Trujillo told a Macquarie investment conference he oversaw the successful multi-billion dollar transformation of the company that avoided a “cost blowout.”

He said the company had “grown market share in key segments” and predicted more revenue growth across all sectors.

During Trujillo’s management of the company, he clashed with Australian Prime Minister Kevin Rudd and his predecessor John Howard over how to regulate the country’s telecommunications industry.

In 2006, Trujillo claimed rules to open access of its copper wire and optic fibre to its rivals below cost would “destroy” the company’s value.

The Australian telecommunications company was initially left out of the bidding round to roll-out the country’s high-speed broadband after it failed to include a small business plan in its November proposal.

Businesswire.co.nz

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