Latest / Best of Business / Jolie Hodson: Spark NZ CEO defends bonus and pay bump amid job cuts

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Jolie Hodson: Spark NZ CEO defends bonus and pay bump amid job cuts · Best of Business

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  Speaker 2: Spark has reported its full year result today as a
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  Speaker 2: little bit of a mixed bag. The reported net profit
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  Speaker 2: is up ninety two percent to just shire five hundred
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  Speaker 2: million dollars, but when you adjust for things like the
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  Speaker 2: sale of the data center and the stake in the
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  Speaker 2: cell tower network, the adjusted profit was actually down about
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  Speaker 2: a percent. Jolie Hodson is Spark CEO. Hi Jolly, Hi, Heather,
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  Speaker 2: So how are you feeling about that result?
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  Speaker 3: Look, I think it's a good step in the right
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  Speaker 3: direction in terms of we set the strategy last year
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  Speaker 3: and we laid out what we wanted to deliver, and
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  Speaker 3: we've delivered within our guidance, and particularly for me, we're
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  Speaker 3: focused on the things that are important in terms of
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  Speaker 3: that strategy, which is about growing mobile and broadband, connecting
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  Speaker 3: New Zealanders to what they need to do, and continue
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  Speaker 3: to invest in the network and ensuring that we're improving
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  Speaker 3: that customer experience.
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  Speaker 2: Because I mean, look, your business has I mean I
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  Speaker 2: think it would probably be charitable or at least fair
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  Speaker 2: to say it's been beleagued in recent years and a
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  Speaker 2: turnaround was necessary. So far how far through that turnaround
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  Speaker 2: do you think you are? Like, at what point in
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  Speaker 2: it will? Were you?
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  Speaker 3: One of the five year strategy we laid out the
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  Speaker 3: end of last year. And so I'm pleased with the
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  Speaker 3: results were delivered. I'm not saying the job's done, because
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  Speaker 3: it's not just, but it's a start, and it starts
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  Speaker 3: with doing what you say you will, and that's what
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  Speaker 3: we've done with this result. And so for me, I'm
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  Speaker 3: really pleased for the business and our people because you
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  Speaker 3: know within that there's been a lot of hard work
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  Speaker 3: to achieve.
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  Speaker 2: That six hundred job losses and more to come is
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  Speaker 2: quite a lot. Why is it necessary to that level?
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  Speaker 1: In the today?
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  Speaker 3: We need to adapt to the environment where and I
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  Speaker 3: don't ever make decisions about people change like that lightly,
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  Speaker 3: but if we're seeing demand fall away and customer demand change,
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  Speaker 3: then we need to change the organization as well.
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  Speaker 2: Okay, so some of its customer demand is some of it.
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  Speaker 3: AI within our productivity program. We're using AI more and
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  Speaker 3: more and there will be some changes. But wouldn't it
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  Speaker 3: would be wrong to say a huge amount of that
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  Speaker 3: is related to Ai.
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  Speaker 2: Okay, Now very important obviously the fact that the chair
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  Speaker 2: is now gone. So what happens next?
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  Speaker 3: So we have the new chair was announced, so Vince
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  Speaker 3: who and I'm looking forward to working with him. He
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  Speaker 3: has been on our board. He joined late last year,
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  Speaker 3: so he's been part of the strategy we set and
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  Speaker 3: so really it's about us working together with the business
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  Speaker 3: and the board to deliver that strategy here.
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  Speaker 2: Yeah, I mean the reason I'm asking you this, Jollie,
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  Speaker 2: is because if the chair has gone, all the talkers,
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  Speaker 2: then the chair's first job is going to be a
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  Speaker 2: new CEO. So does that mean that you are at
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  Speaker 2: the end of your tenure potentially?
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  Speaker 3: Look at this point, ah No, I'm focused on delivering
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  Speaker 3: what I've been asked to do and what we've set
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  Speaker 3: out in terms of the organization and of the day.
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  Speaker 3: I work for the board and I guess ultimately will
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  Speaker 3: be their decision.
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  Speaker 2: Awkward, I have to ask you about money for yourself.
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  Speaker 2: How can you justify a nearly million dollar bonus when
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  Speaker 2: you are when ye're you're laying off six hundred staff
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  Speaker 2: and more to come.
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  Speaker 3: Look, I can understand on when you see a number
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  Speaker 3: like that on a paper that looks pretty stark. If
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  Speaker 3: you think about senior executive remuneration across companies in New Zealand,
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  Speaker 3: there's a component of that that is at risk. So
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  Speaker 3: if you think about twenty four and if I twenty five,
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  Speaker 3: when we didn't meet our performance hurdles, got zero in
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  Speaker 3: relation to that, and that's appropriate because we didn't. And
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  Speaker 3: if I twenty six, we have met the targets that
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  Speaker 3: were set out by the board and therefore that payment
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  Speaker 3: has been made.
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  Speaker 2: Dividend strategy, are you guys still confident you're doing the
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  Speaker 2: right thing If you're laying off six hundred staff, if
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  Speaker 2: your earning's outlook is flat for f y twenty seven,
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  Speaker 2: should you be paying a dividend?
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  Speaker 3: We reset our dividend strategy last year and so were
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  Speaker 3: rejuested divinum from twenty five cents to sixteen cents, which
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  Speaker 3: is what we've confirmed today. So that's taken into account
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  Speaker 3: the free cash flow that we're generating off the business,
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  Speaker 3: which is after we've done the investments that we need
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  Speaker 3: to do in the organization, and so that's an appropriate balance.
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  Speaker 3: I think in terms as we look forward, a growing
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  Speaker 3: cash flow will help support growing dividend, but we're making
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  Speaker 3: sure that we're investing the run amount in our networks
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  Speaker 3: and the customer experience and in our people.
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  Speaker 2: Okay, so where are we do you think with what's
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  Speaker 2: happening economically? Are you seeing things turn around slightly?
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  Speaker 3: I think, like many people coming on your show, hither,
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  Speaker 3: I'll talk about from what I see different sectors that
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  Speaker 3: are being affected Differently. If you think about agriculture and
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  Speaker 3: what's happening there, Suth Island seems to be more buoyant.
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  Speaker 3: I do think there are some promising signs as we
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  Speaker 3: look towards twenty seven, but I'd be far from saying,
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  Speaker 3: you know, we're in a buoyant shift now and we've
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  Speaker 3: done our plan based on like being able to deal
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  Speaker 3: with anything that happens. Really, it's good to hear.
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  Speaker 2: Jolly, Thank you as always appreciate it. Jolly Hodson Spark CEO.
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