Telstra chief executive's departure a 'mutual decision'
The decision, reached today between the board and a sick Switkowski, conference calling his board in Sydney from his Melbourne home where he is suffering from a virus, will see the chief executive officer stay on with the controversial carrier until July 1, 2005 -- two and a half years before his contract is up -- or before if a suitable candidate can be found.
In a mid-afternoon press conference McGauchie praised Switkowski's work with Telstra but said he would not be the right person to see Telstra through the company's "likely" full public listing , which could last for up to five years.
"As we go through our timetable for the further sale of the company - which if you map it out ... we are likely to see as taking place by the end of 2006 -- it's important that we can project forward a minimum of three years' service [of the CEO]. That is why we are doing this now," McGauchie said.
"We looked at whether of not we would extend the contract and it was not where we wanted to go".
McGauchie also put the board's decision down to changing market trends over the last 15 months, including the unexpected popularity of broadband services, a dramatic change in the makeup of parliament and outcomes from the company's network review.
"We have a different picture to what we had a year or two ago," McGauchie said.
Switokwski will walk away with a minimum payout of AU$2,092,000. He will receive more if a replacement has not been found before his finish date. As of yet Switkowski has not released any details of his planned departure or future thereafter.
Telstra shares began to pick up just over a week ago as speculation about the cutting of ties started to circulate, but while Switkowski's revenue forecast for the current economic year will stand, McGauchie said he could not back the 4 percent projected revenue growth for Telstra through 2006.
Details of Switkowski's latest performance review were also kept tight.
McGauchie said the board's appointments committee will be fielding candidates to take Switkowski's place. He did not rule out senior staff members at Telstra, or "well-rounded" members of the IT or telecommunications sector, nor did he rule out changes in senior management positions in the lead-up to Switkowski's departure.
"Clearly we are looking for the best person we can find to manage this very complex company in what is a very competitive and demanding marketplace," McGauchie said.
"We are looking at this as a five-year exercise. We decided to make this decision now and announce it well ahead of any timescale we had.
"In a company this size there will always be some changes going on -- I think we would want to make sure it is business as usual in the company and that all the profits we say we will make will be made".