Telecom has rebuffed efforts by a US hedge fund to add new directors to the board, saying it's headed in the right direction and promising to pay healthy dividends.
The company's share price is under pressure, as its earnings falter under new rules to promote competition.
But at its annual meeting in Wellington on Thursday, shareholders backed the company's leadership.
Elliot International nominated two New Zealanders, Mark Cross and Mark Tume for the board, emphasising the need for fresh blood
Telecom did not support their election, with chairman Wayne Boyd saying four new people had been appointed to the board in the past two years.
It countered by putting up marketing guru Kevin Roberts and sought the reappointment of Rob McGeoch, who said this will be his last term if elected.
With Mr Boyd holding 1.1 billion proxies, representing more than 60% of Telecom's shares; Mr Roberts and Mr McGeoch were in and Mr Cross and Mr Tume, out.
Shares in Telecom have lost 34% in value so far this year and hit a 16-year low of $2.60 at the end of last month.
Mr Boyd told investors the board shares their frustration and said the company will pay quarterly dividends of 6 cents per share for the next two years, to provide certainty as Telecom transforms itself.
The company is investing heavily in new fibre and mobile networks. But chief executive Paul Reynolds admits it has to regain the trust of its customers.