Telstra Share Price Flat on Shock CEO Retirement [ASX:TLS]
Telstra Corp Ltd [ASX:TLS] is in the spotlight after long-serving CEO Andrew Penn retired. Will Telstra’s approach and strategy change?
Despite the surprising announcement, TLS shares were flat in late afternoon trade on Wednesday.
Over the last 12 months, Telstra shares have largely tracked the market, gaining 14%.
Telstra CEO resigns
Telstra announced today that long-time CEO Andrew Penn is retiring after seven years at the helm.
His successor, Vicki Brady, is to officially take over on 1 September.
Like Penn, Brady served as Telstra’s chief financial officer before transitioning to the top job.
Telstra management acknowledged that the outgoing Penn would leave a ‘positive and enduring legacy for the transformation he has led during his time as CEO.’
Speaking about the impact of Penn’s tenure, TLS Chairman John Mullen commented:
‘Andy has led Telstra during a period of significant change and will be known for his courage in setting a bold ambition through the T22 strategy to deliver a transformed experience for customers, shareholders and employees. There is no doubt the strategy has delivered beyond expectations and has laid the foundations for Telstra’s recently announced T25 strategy and a renewed focus on growth and innovation.’
Penn’s leadership at Telstra coincided with rapid digitisation, which Penn was quick to register and pivot towards.
Penn oversaw the simplification of Telstra’s product offering, the streamlining of customer experience, and a heavy investment in 5G.
He also oversaw a $2.5 billion cost reduction across the company.
Telstra said that due to his efforts ‘over 17,000 people now work in agile teams across Telstra.’
Of course, part of that agility involved launching a redundancy program as part of the T22 strategy, which will see about 8,000 roles cut.
To date, about 90% of the T22 workforce cutback is complete.
Telstra’s new boss
Telstra’s incoming CEO has been painted as no stranger to Telstra’s trials and tribulations, having served as CFO and group executive of strategy and finance since 2019.
Brady has managed the company’s financial performance and corporate strategy in prior roles, with knowledge of reporting and guiding shareholder interests and values.
TLS chairman Mullen said of Brady:
‘Having started her career with KPMG, Vicki subsequently worked in a range of finance, commercial and strategy roles before moving into broader business leadership positions. She has made a significant contribution to Telstra including her work in developing our new go to market plans as part of the T22 strategy. She has played a key leadership role in the development of Telstra’s T25 strategy and is well placed to lead the company through its next phase. She could not be more qualified to take over the reins to deliver on our T25 commitments.’
Telstra share price outlook
Over the past seven years, Andrew Penn has been involved in major strategic revamps for Telstra.
There was the recent partnership with TPG, the broadening of Telstra’s 4G and 5G wireless networks, and securing favourable terms for the acquisition of Digicel, the Pacific’s largest telco.
Despite the big strategic moves made under Penn’s leadership, the Telstra share price is lower today than it was when Penn took over as CEO.
Will the new CEO fare better?
Time will tell.
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For The Daily Reckoning Australia