Telstra’s leadership team will be held to account for the hundreds of millions of dollars the company is investing in artificial intelligence, after the telco became one of the first big Australian companies to directly link executive pay to the value being added by the technology.
The board of Australia’s largest telecoms company has taken the novel step of linking its 2027 executive bonuses to “AI impact”, demanding progress on 11 projects it expects will actually make or save money or improve the customer experience.
It is a slim portion – 5 per cent – of the short-term incentives in Telstra’s remuneration policy, but is a significant change, replacing a more generic set of digital product targets.
The move will put pressure on Telstra’s bosses to demonstrate the value being created through a $100 million-per-year deal with consultancy giant Accenture agreed last year to advance the use of AI across the organisation.
The change, explained in the 2027 remuneration report, shifts the focus “from AI adoption to measurable impact” or, put another way, changes the criteria from “measuring activity, usage and capability build to rewarding tangible operational outcomes”.
In its full-year results on Thursday, Telstra chief executive Vicki Brady told analysts and investors what those 11 projects were. Under the rem report, she must reach a target in eight of them to earn her AI impact bonus.
The initiatives include:
- Using AI to reduce the number of times customers are transferred when they call Telstra’s call centres.
- Using AI to scale Telstra’s B2B sales operations.
- Using AI to detect fraud more cheaply and effectively.
- Using AI to increase engineering output.
The STI metric for AI was first proposed by Telstra’s executive team, and approved by the board after being recommended by the People and Remuneration Committee.
“This is a company-wide measure because AI transformation is not limited to one function, team or leadership group,” a company spokesman said.
Telstra’s seven-year deal with Accenture formed a joint venture in April last year that involves 1200 people working from offices in Australia and India. The venture is 60 per cent owned by Accenture.
So far, the partnership has involved putting the telco’s staff go through the consulting giant’s Technology Quotient training, and boosted what it describes as “AI-assisted migrations”.
These use AI to “proactively detect and help address payment or credit transfer issues before customers need to call for support,” it told investors in its annual report.
Beyond that, though, the telco has said little publicly about what the first 16 months of the partnership have achieved.
Kim Krogh Andersen, the head of Telstra’s network, product and technology, rejected the suggestion the new incentives meant the company wasn’t moving fast enough on AI and said Telstra had been building its AI foundations.
“We’ve already seen significant value from our AI investments across customer experience, network operations, software engineering, productivity and business performance,” he said.
“By linking AI impact to enterprise performance, we’re making AI value realisation more transparent, accountable and connected to the outcomes that matter most to our strategy.”
Some of the projects the Accenture partnership has worked on include Ask Telstra – a generative AI chatbot that has helped 8000 call centre staff deal with customers more quickly – and an AI assistant to help Telstra customers in their app or on the website. There are also centralised platforms called Control Plane, Responsible AI and Switchboard.
“We’re in a better place today in terms of our AI capability than we would have been, I believe, if we had not done the Accenture joint venture,” Brady said when asked about the joint venture at results on Thursday.
“It’s absolutely delivering for us, particularly foundational capability inside our business, like our data and AI Control Plane, which gives us full visibility of AI use cases. It means we can monitor cost, performance.”