Post #91 - Eighty-Eight Per Cent -

Last year, less than one per cent of TPG’s shareholders objected to how it pays its executives. This year, twelve per cent did. In between, the company earned one per cent on its continuing business, handed shareholders back $2.8 billion it got from selling the fibre network, and paid its chief executive eighty-eight per cent of the maximum bonus – in a year the premium brand added nobody, complaints ran near forty per cent adrift of its rivals, and a regulator opened an investigation it declined to describe.

The shareholders noticed. This is what they said.

There is a number a board never wants to see move, and it is not the share price. The share price is somebody else’s opinion, rendered daily, easily blamed on the weather. The number a board dreads is the one its own shareholders write down once a year, in a room, on the single resolution the law hands them purely to say what they think of how the executives are paid. For years at TPG that number was a rounding error. This year it was not. And the distance it travelled – from under one per cent to over twelve – is the sound of the shareholders reading the same accounts this series has spent a year reading, and reaching, at last, the same conclusion.

The Number That Moved

Put the two years side by side, because the company would prefer you didn’t.

At the 2025 annual meeting, TPG’s remuneration report drew a vote against of 0.87 per cent. Nine hundred and ninety-nine shareholders in a thousand looked at how the executives had been paid and raised no objection at all. It was the kind of result a board frames.

TPG Telecom Limited – Results of Meeting, as lodged with the ASX on 7 May 2025.

At the 2026 annual meeting, twelve months later, the same resolution drew 12.17 per cent against – a fourteen-fold increase in a single year, on the one vote shareholders are given to register displeasure and nothing else. It is not, for the pedants, a “strike”: that requires twenty-five per cent, and the board will cling to the gap between twelve and twenty-five like a man clinging to the difference between a warning shot and a hit. But a fourteen-fold surge in dissent is not noise, and it is not the weather. It is a specific accusation, made by the people who own the company, about a specific thing: the pay.

TPG Telecom Limited – Results of Meeting, as lodged with the ASX on 8 May 2026.

And here is the tell that turns a data point into a verdict. On the same poll, at the same meeting, the resolutions to actually hand the chief executive his equity – the short-term grant, the long-term grant – sailed through at 99.73 and 99.55 per cent. A year earlier those same grants had themselves drawn eleven-point-six per cent against; this year, next to nothing. The dissent did not disappear.

It moved – off the grants, which shareholders must approve or watch the same reward paid in cash instead, and onto the remuneration report, the one vote that changes nothing and therefore the only one worth spending on a message.

The shareholders did not object to the plumbing. They objected to the house. They waved the pipes through at ninety-nine per cent and marked the framework down by twelve, which is precisely what a shareholder does when he has stopped quarrelling with the mechanism and started quarrelling with the result.

Twelve per cent is not a rebellion. It is a board being handed a note. The interesting question is what the note is about – and for that, one opens the remuneration report the twelve per cent had just read.

Eighty-Eight Per Cent of the Maximum

Here is what the objecting shareholders saw when they turned to the numbers.

For the year ended 31 December 2025, the chief executive was awarded a short-term incentive of $3,053,206 – split, in the modern fashion, half cash and half deferred rights, so that the word restraint might be applied to a payment of three million dollars. That award represented, in the report’s own words, 87.64 per cent of the maximum. Not of target. Of the maximum.

In a year the continuing business – the going concern, the network and the brands and the whole of what TPG intends to keep – earned $52 million before tax, and $7 million before the taxman handed some back.

Read those two figures in the same breath, because the board did not.

A chief executive collecting the better part of nine-tenths of his maximum possible bonus, from a business that converted five billion dollars of revenue into fifty-two million of profit, and would have converted it into seven had the research and tax grant not intervened. The bonus scheme, asked to grade a year, returned an A-minus. The accounts, asked the same question, returned a one-per-cent margin and a return on capital below the cost of the capital itself – the technical definition of a business destroying value while it operates.

Nor did it stop at the framework. The board, having run the scorecard and arrived at its number, then exercised discretion to add a further $250,000 to the chief executive “one-off” – and, for good measure, $100,000 to one lieutenant and $85,000 to another.

Discretion is the word that matters, because discretion is the board’s own judgment, unmediated by any formula, applied after the machine had already delivered its verdict. Presented with a year the machine had graded at nearly ninety per cent of maximum, the board’s considered human addition was: more. The formula was generous; the humans were more generous still.

One studies the scorecard for where the generosity came from, and the answer is instructive. The company’s Net Promoter Score – its own house measure of whether customers are happy – was recorded, for the company’s brands, as an outcome at maximum.

Maximum.

This in the year that the Telecommunications Industry Ombudsman’s tables show Vodafone complaints running some forty per cent adrift of Telstra and Optus, the two large rivals driving their numbers down while TPG’s stable drove its own up.

A satisfaction metric at maximum and a complaints metric at a multi-year high, in the same company, in the same year, purporting to describe the same customers – and only one of them was invited onto the scorecard.

Which prompts the question the whole bonus turns on: whose picture reached the boardroom.

If the version that arrives upstairs has been filtered on its way – if a delayed cancellation is booked as a save, if an unresolved fault is quietly auto-closed, if the satisfaction survey happens to find the customers who were just made happy with a credit – then the board is grading a company that does not quite exist, and paying itself on the difference. This masthead asserts none of those mechanisms; it observes only that the instrument the company builds and marks itself printed perfect, the instrument kept by the Telecommunications Industry Ombudsman printed worst in years, and the board wired its bonus to the first and left the second off the dashboard.

A company is entitled to measure itself. It is not usually so fortunate as to mark its own exam and bank the result.

The Scorecard That Learns Nothing Until It Is Watched

Which brings us to the most quietly damning entry in the whole file, and it is a matter of timing.

TIO complaints – the measure on which TPG spent 2025 conspicuously losing to its rivals – were, this masthead notes, added to the executive scorecard. For 2026. Prospectively.

The metric on which management performed worst was admitted to the instrument that pays management only after the year in which the failure occurred had been safely closed, its bonuses counted and banked. Accountability arrived, but with the immaculate timing of a smoke alarm installed the morning after the fire, and wired, one notes, to next year’s kitchen.

One is left to wonder what prompted the retrofit. A board does not ordinarily bolt a complaints metric onto executive pay in a year its own satisfaction score printed at maximum; the two moves sit oddly together, unless something had made the complaint figures suddenly, awkwardly visible – visible enough that a number the board had been content to leave off the executive dashboard for years abruptly required a place on it. The masthead notes only the sequence: the gap widened, the gap became public, and the metric appeared. In that order.

A scorecard that acquires a conscience only once its failures are being read aloud is not a scorecard. It is a mirror the board holds up to whichever audience is currently looking.

The Disclosure and the Raise

There is one more entry in the year’s record, and it is worth setting down plainly, because the company chose the words itself.

On 18 November 2025, TPG lodged a statement with the ASX confirming what it called a “tragic loss of life” following calls from a device that could not reach Triple Zero. The company added, in the same announcement, that its network had been “operational” at the time and that it had met its “regulatory obligations” by notifying affected customers to update their software.

It then explained why it was telling the market at that moment: it was providing the information “for transparency because of heightened public awareness,” while “currently undertaking the institutional component of the Reinvestment Plan.” The bookbuild, the statement noted a paragraph later, “received strong demand.”

The death and the capital raising were disclosed in the same announcement, under one continuous-disclosure header, with the raise named as the context. This masthead sets the fact down as the company recorded it, and leaves the reader to make of the pairing whatever the reader will.

Here’s Your Money Back

There remains the largest number of the year, and it explains what the pay was being paid for.

In November 2025, at an extraordinary meeting, shareholders approved a capital distribution of $2.826 billion – $1.52 per share by way of capital reduction, plus a nine-cent unfranked dividend on top. The company is admirably candid about the source, because the accounts leave it no choice: the distribution was, in TPG’s own words, “funded by proceeds from the Vocus transaction.” That is to say, funded by selling the fibre network. Nearly three billion dollars, returned to the shareholders, sourced not from anything the business earned but from a piece of the business the board sold.

Consider what that is, stripped of its ceremony. A company that generated $52 million from continuing operations handed its shareholders $2.8 billion of their own capital back, drawn from an asset sale, and unfranked – no tax paid at the company level for the credits to attach to, because there were no taxed profits behind it. It was not a dividend. It was a partial liquidation, conducted with a smile, and applauded as capital management.

When a board’s boldest financial act of the year is to sell a limb and distribute the proceeds, it is telling you, in the only language boards are truly fluent in, that it has run out of things to do with the money that would earn more than handing it back. That is not the behaviour of a growth company. It is the behaviour of a board quietly beginning to wind one down – returning the capital, trimming the network spend, and paying the management eighty-eight per cent of maximum for presiding over the exit.

And there is a question worth asking about whose exit. TPG’s register is not a crowd; it is a controlling shareholder – Vodafone Group, holding a shade over half the company through its subsidiaries – and a large legacy holding behind the Hutchison names, neither of which has behaved, of late, like an shareholder settling in for the long haul.

Vodafone Group carries north of thirty-six billion euros of net debt, has spent two years selling down its empire from Spain to Ghana under an openly stated policy of recycling capital, and has been reported by the Australian Financial Review, more than once, to be watching TPG‘s price in preparation for an exit it has pointedly declined to rule out.

Against that backdrop, a $2.8 billion distribution funded by an asset sale is not a neutral act of capital management. It is a very large cheque, written to a register whose biggest names appear to be looking for the door – and unfranked, so it arrives as the cleanest possible cash, the kind a departing shareholder values most. A capital return is meant to signal a board with no better use for the money. This one may simply signal a board with no better use for the shareholder.

And the dividends, the ordinary ones, tell the same story in miniature. Stripped of the special payment – which was a child of the Vocus sale and will not recur – the recurring dividend runs to some $334 million a year: two payments of nine cents apiece, both unfranked, which is the balance sheet’s own quiet admission that there were no franking credits to hand out because there were no taxed Australian profits to generate them.

Set that beside what the ongoing business earned – $7 million before tax – and the arithmetic stops being a dividend policy and becomes a confession. The company pays its shareholders, year in and year out, something like forty-eight times what its continuing operations make before the taxman is even consulted.

It is possible only by an accident of accounting: the dividend is covered not by profit but by the gap between depreciation and capital expenditure – the cash a company keeps when it charges its earnings for wearing out assets faster than it troubles to replace them. A real source, and a finite one, sustainable exactly as long as a network can be run down faster than it is renewed, which is to say sustainable until, quite suddenly, it is not.

And here is the detail that ought to stop a shareholder cold.

At its June Investor Day, the company signalled an intention to increase the dividend. One lingers on the word, because this series has met it before. The survey measured customers’ intention to stay. The guidance dealt in the intention to grow. Now the payout joins them – a company earning seven million dollars before tax announcing it intends to hand its shareholders more.

At TPG, intention has become the tense in which the future is always brighter and the present never quite arrives. A dividend paid from earnings is a company sharing its success. A dividend paid from the space where reinvestment used to be, and promised larger still, is a company consuming itself on schedule – and inviting the shareholders to admire the pace.

The shareholders were paid handsomely. They were simply paid out of the furniture.

What a Bad Year Looks Like

So let us do what the remuneration committee could not, and total the year the board graded at nearly ninety per cent of maximum.

Two deaths were disclosed during the year in connection with customers unable to reach Triple Zero on the company’s network – one confirmed by TPG in a formal statement to the ASX in November, a second the chief executive told a Senate hearing in December may also be linked – set down here as disclosed facts of the year the scorecard was grading, and left to sit where they fall, without embellishment, because they need none.

The premium brand added, net, nobody – 2,846,000 postpaid customers at the start of the year, 2,846,000 at the end – despite a doubled coverage footprint, a fifty-per-cent-off promotion, and the billion-and-a-half-dollar network-sharing deal sold as the engine of exactly this.

The continuing business earned one per cent on its revenue.

Complaints ran forty per cent adrift of the rivals, who were falling while TPG rose.

TPG announced a regulator, ACMA, opened an investigation the company disclosed in a single sentence and then declined to describe.

Other provisions swelled from two million dollars to a hundred and fifteen, attributed entirely to one cause and itemised against none.

The cash flow was flattered by selling the fibre network and by factoring the customers’ own phone instalments to a financier – at a derecognition cost of some ninety-five million dollars, very nearly the whole of what the continuing business earned before tax.

The stock drew an Underweight from Morgan Stanley and a raft of forward EPS cuts from the brokers who model it for a living.

Against that catalogue, the machine returned 87.64 per cent of maximum, and the board added a quarter of a million on top for good measure.

One is entitled, at this point, to ask the only question that matters, and it is the same one this masthead asked in March, before the shareholders had voted:

What, precisely, would a bad year have to look like?

If a flat premium base, a one-per-cent margin, a complaints record diverging from every rival, an undisclosed regulatory investigation, and a profit assembled from an asset sale together produce eighty-eight per cent of the maximum bonus – what is the maximum reserved for? What year, exactly, is the scorecard waiting to punish, if not this one? A grading instrument that returns an A-minus for a year like this one is not measuring performance. It is laundering it.

The remuneration report calls this “outstanding leadership through such a transformative year.”

The shareholders, reading the same words, wrote down 12.17 per cent – fourteen times what they wrote the year before.

It is the sound of a shareholder base that has stopped believing the adjective. Because “transformative” is doing, in that sentence, the work that “underlying” did at Qantas, and “challenging” does at every company managing its own decline: it is a word chosen to make the reader feel about the year the way management needs him to feel, rather than the way the numbers require.

And the tell, as ever, is that the audience has begun to feel otherwise. First the analysts cut their models. Then the customers filed their complaints. Now the shareholders have marked the pay.

The narrative is intact only inside the building. Everywhere the accounts are read by someone who does not draw a salary from them, the story is coming apart.

There is, as there always is at this company, a date in the diary. The half-year results land in late August, reviewed if not yet audited, and with them the first trading detail struck after the network fell over on 19 June and after the shareholders lodged their protest in May. On that day the scorecard meets the tape again. The board will call it transformative. The tape will call it whatever it is. And the twelve per cent who declined to applaud this year will be waiting, with the other eighty-eight, to see which of the two was telling the truth.

The bonus, one suspects, will be fine either way. The scorecard has never yet found a year it couldn’t grade generously – not a flat premium base, not a one-per-cent margin, not a complaints record diverging from every rival, not even this one. Whatever the tape says in August, the machine has already returned its verdict on the year gone by, and it came to eighty-eight per cent of the maximum. That is the number the shareholders were finally, formally, objecting to. It is also, on the evidence of every year that preceded it, the number the board intends to keep printing.

Right of Reply

TPG Telecom Limited, its Board, its Remuneration and Governance Committee, Vodafone Group PLC, CK Hutchison Holdings, and any director, executive, shareholder, adviser, or entity who considers themselves referenced or implied in this article are warmly invited to correct, clarify, or add context to anything set out above – including the remuneration outcomes, the scorecard construction, the capital distribution, the characterisation of the share register and any shareholder intentions, and the annual meeting votes, every one of which is drawn from the company’s own audited accounts, its own lodged poll results, or mainstream public reporting.

Verified responses sent to vodafailed@gmail.com will be published in full and without editorial amendment, alongside the original article.

This right of reply remains open indefinitely – considerably longer, one notes, than the deliberations that produced the discretionary quarter-million.

Disclosure, Disclaimer & Legal Notice

This article is independent commentary and analysis on a matter of public interest, drawn entirely from publicly available material: TPG Telecom‘s audited full-year 2025 statutory accounts and remuneration report; the poll results of its 2025 and 2026 Annual General Meetings as lodged with the ASX under Listing Rule 3.13.2; quarterly complaint data published by the Telecommunications Industry Ombudsman; and publicly reported broker commentary and coverage of the June 2026 network outage. No confidential, privileged, or non-public information has been used in its preparation.

All views expressed are the author’s honest opinions, formed on reasonable grounds from that public material, and are published in reliance on the protections afforded to honest opinion, fair comment, and publication in the public interest under the Defamation Act 2005 (NSW).

Remuneration figures, incentive outcomes, scorecard results, dividend and capital-distribution details, and voting figures are quoted or derived from the company’s own public disclosures.

The observation regarding the timing of the addition of a complaints metric to the executive scorecard is a matter of publicly disclosed record offered as governance commentary; no assertion is made as to the motive of any person, and any inference as to causation between public attention and that decision is expressly disclaimed.

Complaint figures are drawn from the TIO’s published quarterly reports and are subject to the limitations of external estimation. References to network coverage and performance reflect commentary on publicly reported events, not a technical assessment of any network.

Nothing in this article alleges or implies that any remuneration was paid in connection with, or as a consequence of, any regulatory investigation, customer harm, or complaint outcome. The juxtaposition of remuneration decisions with operational and financial outcomes reflects publicly disclosed facts, presented for the purpose of governance analysis and comment.

This is not financial, investment, or legal advice, and nothing in it constitutes a recommendation to buy, hold, or sell any security. TPG Telecom, Vodafone, and related names are trademarks of their respective owners, used here for identification, commentary, and analysis only, with no affiliation or endorsement asserted or implied. No assertion of any breach of any law, regulation, or standard is made against any person or entity.

The author has an active dispute with TPG Telecom Limited (ASX: TPG), has made protected disclosures under Part 9.4AAA of the Corporations Act 2001 (Cth), and holds an immaterial shareholding in TPG Telecom Limited. These interests should be weighed when reading this commentary. All entities and individuals retain the presumption of lawful conduct unless a competent authority determines otherwise.

Previous posts in this series:

Post #65 – When The Music Stops

Post #66 – The $2B Problem TPG Can’t Afford

Post #67 – The Bonus Year: Thin Earnings, Thick Optics

Post #68 – Buying the Narrative

Post #69 – The Smart Money Just Left the Building

Post #70 – Who’s Watching the Watchers?

Post #71 – Nine Lives: The Ad Agencies Vodafone Burned Through on the Way to Zero Growth

Post #72 – Marked Safe from the Whistleblower Policy

Post #73 – The Story Nobody Will Publish

Post #74 – Nothing Out Here

Post #75 – The Gift That Keeps Giving