TPG was hit with a first strike over executive pay as its smaller shareholders lodged a protest vote at its annual general meeting.
Almost 30 per cent of shareholder votes went against TPG’s remuneration package for 2016/17 at the AGM.
If there is a no vote of at least 25 per cent at TPG’s next AGM, there would be a board spill, under the current “two strike rule”.
At the AGM, TPG Telecom chairman David Teoh acknowledged that the National Broadband Network rollout has crimped the telco’s margins but he was confident its investments in in mobile and fibre infrastructure will deliver in the long-term.
“Your directors are all shareholders in the company and each of us is, of course, disappointed about the margin headwinds that the group is facing as a result of the building of the NBN network, and the consequential decline in the company’s share price over the past year,” Mr Teoh told shareholders at TPG’s annual general meeting.
“However, I am confident that the strategies we are implementing will continue to create excellent value for shareholders over the long term.”
TPG’s shares have dropped 11.6 per cent since the start of the year. They have plummeted 49.9 per cent to $6.03 over the last 18 months.
TPG has estimated it will need 500,000 subscribers to break even on its earnings before interest, tax, depreciation and amortisation.
Mr Teoh said TPG had taken “transformational steps” for the next stage of its growth into the mobile market.
“Whilst TPG’s success to date has come largely in the fixed line segment of the market, we have long recognised the importance of wireless connectivity to the future needs of consumers, and in FY17 we took decisive steps towards positioning our Group to become a powerful participant in the mobile sector both in Australia and in Singapore, vastly expanding our future opportunities,” Mr Teoh said.
TPG has paid the government $1.26 billion for a slice of the nation’s 4G mobile spectrum and says it will spend $600 million over three years building a network that will cover 80 per cent of the population.