Controversial Telstra boss Sol Trujillo will leave the company on 30 June after four years at the helm of Australia’s biggest telecommunications company.
Trujillo, who will return to his native United States, told the board of his decision yesterday. Trujillo and chairman Donald McGauchie agreed that the notice period will provide enough time for Telstra to find and appoint a new chief executive.
McGauchie says the search for a replacement is “well advanced” and a successor will be appointed before the end of June.
Trujillo announced his departure on the same morning Telstra announced a first-half net profit of $1.92 billion, down from $1.94 billion in the previous corresponding half.
The company also reduced its outlook for earnings before interest and tax (EBIT) growth for the full year to between 3% and 5%, down from the previous forecast of 6% to 8%.
But Trujillo defended the company’s performance. “Telstra’s share price has outperformed the ASX200 by 19% over the last 12 months. While many other companies have reported falling earnings, margins, cashflows and even dividends, Telstra’s underlying results continue to be strong.”
Reviews of Trujillo’s time in charge are likely to be mixed.
While McGauchie praised Trujillo for his role in completing Telstra’s privatisation, integrating the Next G and Next IP networks, expanding into China and launching the T[life] chain of retails stores, his tenure has been marked with controversy.
Trujillo and trusted lieutenant Phil Burgess were locked in constant battle with the Federal Government over regulatory issues, and recently Telstra was locked out of negotiations to build the national broadband network by Communications Minister Stephen Conroy.
It could also be argued that Trujillo’s reign has not been a happy time for shareholders: Telstra’s share price has fallen from $5.07 on the day he was appointed chief executive in July 2005 to around $3.73 this morning.
Trujillo, who is leaving Telstra before his five-year transformation plan is complete, has not said what role he plans to take up upon his return to the US. Trujillo’s annual salary was recently set at $13.4 million, but the size of his final payout is yet to be announced.
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James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
