The scheme, set annually by the board, is designed to reward the CEO for achieving pre-specific target levels of performance such as ebitda. A Telecom spokesman said the company had a challenging year and Dr Reynolds' remuneration reflected that. In addition to his $NZ1.75 million ($A1.39 million) base salary, Dr Reynolds could receive up to $NZ2.1 million ($A1.67 million) under the "long-term incentive" component, taking his total salary and incentive package for the year ending June to $NZ5 million ($A3.98 million), compared to $NZ7.1 million ($A5.65 million) in the previous year.