The Telstra board has been instructed by Peter Costello, Australia’s Treasurer, to justify to its shareholders, including the Australian government, the Aus$2.6m bonus paid to its chief executive, Sol Trujillo.

At the same time some of the firm’s biggest shareholders are clubbing together to launch a protest vote against the appointment to the board of a former advisor to Australian Prime Minister, John Howard.

Geoffrey Cousins is a former communications consultant to Howard and is due to be appointed at the company’s annual general meeting on November 14. However, his appointment has produced an increasingly vocal backlash that has seen Howard dubbed a “political thug” by Australia’s opposition party.

If a coalition of protesters emerges – probably headed by at least two of Telstra’s biggest shareholders – Howard’s attempt at bulldozing Cousins’ appointment could cause further embarrassment for the PM and Telstra.

The Australian government and Telstra have not see eye to eye since Cousins’ nomination which Howard has backed despite harsh criticism in the Australian media. This has been significantly worsened since news of Trujillo getting an Aus$8.7m pay package – including the Aus$2.6m bonus.

Treasurer Costello told the Australian Age newspaper: “Normally, you get a bonus for meeting certain benchmarks in share value. I would think the company should explain how the bonuses were arrived at and what the benchmarks were and how Mr Trujillo met them.”