Telecom's Gattung to go in June 

Telecom has confirmed its chief executive Theresa Gattung is resigning.

Gattung will step down at the end of June after seven years as the boss of New Zealand's largest listed company.

Telecom chairman Wayne Boyd paid tribute to Gattung on Friday, saying she had led the company during a period of unprecedented change in the telecommunications sector.

"We thank Theresa for her dedication to Telecom. She has built and maintained a high performing team culture throughout the company and her energy, passion and intellect will be missed. In the three years I have worked with Theresa on the Telecom Board I have come to have a great deal of respect for her.

"She has been, and continues to be an inspiring and passionate leader and manager."

Gattung said it had been an honour to serve as Telecom CEO.

"This is a dynamic company in a complex industry. It's a sector with a great outlook. It has been a privilege to work in a company that is at the heart of such exciting change," she said.

Gattung was ranked the 49th most powerful woman in the world by Forbes magazine, just behind the Queen.  There is no word on what she will do when she finishes up at Telecom.

"No-one's crowned emperor for life, I was always going to move on at some stage.  Twelve years I've been at Telecom - that's three times longer than I've been at any other organisation and I've worked in many different sectors - so you know it's just time," Gattung said.

She had previously said she would like to leave by the end of this financial year.

Last month Telecom denied reports in the Sydney Morning Herald that Gattung was about to step down.

The paper reported the company's board was expected to begin a formal search for a replacement within weeks.

A spokesman for Telecom said at the time there was no search underway for a new CEO.

There had been speculation Gattung would go after billions of dollars were wiped from the company's share value when the government announced changes to the way the telecommunications sector is regulated.

ABN AMRO analyst Ian Martin says the timing is right for Gattung to go, but he is unsure who Telecom will get to replace her.

He says there are some good internal options who could continue the change Gattung has put in place, or they could get someone from outside to bring new ideas to the company.

Martin says Gattung has done a good job in her seven years as CEO, with her marketing skills being of great benefit to Telecom.

The company says a global search for a new CEO will start immediately and an update will be given at the next quarterly earnings briefing in early May.  Telecom says it is also looking for internal candidates from within the company.

"This is a big role - the pay is very high - $2.9 million.  I would imagine that the next chief executive might even be paid more than that - it's quite an attractive job," business analyst Brian Gaynor said.

Gattung's resignation overshadowed Telecom's half year financial result.

On Friday the company reported adjusted net earnings after tax of $461 million for the half year to 31 December 2006, an increase of 16.7% on the half year to 31 December 2005.

Telecom shares are down seven cents but analysts blame that more on a disappointing profit than the Gattung departure, which had been expected after years of market turbulence during her time at the top.

Tumultuous ride

At 37, Gattung was New Zealand's highest-paid woman. Her appointment in 1999 surprised some commentators, but she had long dreamed of running a public company.

At first the market believed in Gattung, with shares peaking above $9. But in the seven years since, the company's share price has tumbled to under $5.

By 2006, commentators were calling on Gattung to bow out.

The dotcom crash hit Telecom's share price hard, but Gattung also inherited a disastrous investment across the Tasman that drained $1 billion from the company.
 
Last year the share price dived again when Telecom botched its response to the government's decision to open up broadband to competition.

In the business world Gattung was known as an assertive, forthright leader who knew how to play the political game.

Gaynor says she has had a big influence in New Zealand because of her position - one which has been a rough and very public ride that has seen Telecom lose billions, and its image tarnished. 

"She has to take some of the blame for that. There was the presentation in Sydney that she made, where she made comments about the way we deceive customers and that's the way business operates, but the big faux pas was her misjudgement of the government's intention to regulate the industry - they didn't think it would happen."

But it did happen in May and many say the knives have been out for her ever since.

One business leader said the acid test of a chief executive was how much value they add to their company, and then pointed out that Telecom's share price had plummeted during her reign.

However Gattung says she does not have any regrets. "...I don't do regrets - I've done my very best. I've been fortunate enough to have fantastic people around me.  It's been an honour and a privilege to lead Telecom through a time of unprecedented change."