Greedy hypocrisy of Telecom bosses
At the same time Telecom are attempting to force their staff employed as lines engineers to become dependent contractors, a move that will more than halve their income, the company continue to defend paying multi million dollar salaries to their top executives.
To make matters worse, Telecom CEO Paul Reynolds recieved his full performance bonus despite Telecom recently announcing a 43% drop in profits. The EMPU estimate his total remuneration package for the year is $7 million. Six other top executives receive a total of $11 million to share amongst themselves.
This problem is not new, and despite the excuses has nothing to do with the recession. A 2007 survey by Sheffield of 501 chief executives* found the proportion of bosses not reaching targets rose from 28 per cent in 2006 to 43 per cent in 2007. Those who missed targets were still paid three quarters of their targeted performance pay. Its highly unlikely these same bosses were so understanding when it came to paying their own workers based on performance.
Telecom chairman Wayne Boyd said Reynolds got the maximum bonus for his outstanding first full year in which he had negotiated the company's obligations with the government. It says a lot that Telecom believe Paul Reynolds deserves $7 million for his work attempting to influence the Government. It says a lot because this demonstrates how skewed the priorities of the company have been ever since it was privatised - protect the monopoly, or something as close to the monopoly is the goal - not providing decent telecommunications services.
As John Minto says, Telecom have been a boil on the country's backside for almost 20 years since it was privatised by Labour and National. Minto also notes the company employs over 90 lawyers and suggests this monster legal team is there to protect Telecom's near monopoly.
Telecom's relations with government have sometimes resembled Elizabethan style patronage, where monopolies were given out to loyal courtiers, who undertook a little price fixing to ensure they were enriched at public expense. This is an close description of the privatisation of the company, yet most people have no problems describing Elizabethan examples as political corruption. Telecom would have loved the 16th century - even if there were no phones.
Quite by accident, I did a google search in New Zealand with the words outstanding and CEO. Funninly enough its a rather boring platitute hosted on a lot of CEOs. Its just false flattery, in the mode of 'Oh, your majesty' (note capitalisation is a political issue).
Just this week, a telecommunications watchdog, the Independent Oversight Group found that Telecom had breached its operational seperation undertakings by offering wholesale discount deals to its customers. The IOG called these breaches 'non-trivial', which is another way of saying these breaches were serious. So Telecom is up to its old tricks, fighting and suppressing competition whenever it has the chance to occur. Why am I thinking about the prospects of a 'dissolution of the monasteries' right now? If that's going a bit far, at least make operational separation a genuine separation and break the company up.
It is also up to its old tricks in its relations with its employees. Even National MPs are recommending the engineers refuse to sign the nonsense contracts offered by Telecom
Telecom are not offering their engineers a genuine 'business opportunity' as they are setting all the terms of the contract. Work will only be offered on Telecom's terms - these workers will be nothing like real independent contractors, and will lose the overtime payments they receive now. Telecom are offering no redundancy, yet the engineers are being given the 'opportunity' to front up with $60,000 for their own vans and equipment. The income of the lines engineers will drop by up to 66%, which of course is the reason why Telecom is attempting to pull this stunt. Please support the engineers and their families - in this situation they have little option but to go on strike.
Instead of gifting their new CEO all sorts of travel allowances when Paul Reynolds shifted from the UK, why didn't Telecom ask him to bring his own plane?
* Source: Dominion Post (6/3/2008), "Bosses collect despite targets"