The stock market awoke to surprise news that Telstra CEO David Thodey will retire and hand the reins to current chief financial officer Andrew Penn.

Here are ten things you need to know:

It's been 'on' for a while

Though Thodey has spent the past year hosing down speculation of his future at the telco, internal discussions intensified over recent months. "I've been thinking about retirement for a while now," he told financial analysts and media today.

Succession planning started on day one

"When I became CEO it was a little bit rushed," Thodey said, a reference to the sudden departure of former chief Sol Trujillo and Thodey's appointment to the role some two months later. Unlike the intensity of leadership speculation at the time, Thodey noted Telstra's pleasure at being "able to quietly plan" succession this time around.

Part of that is almost six years of preparation. "I can still remember when I first became CEO, one of the first requirements was they said to me, 'David, you must build that management team so we have a number of great potential successors'. And that is what we've done."

Chairman Catherine Livingstone singled this out for praise. "It is a testament to David Thodey that we were able to select the next chief executive from within the business," she said.

He's still the chief

Although he is retiring, Thodey remains CEO of Telstra until May 1, when current chief financial officer Andrew Penn takes over. Even then, Thodey will help Penn transition until the end of the financial year. He will permanently exit Telstra sometime in August.

A break before back into business?

Post-August, Thodey's immediate plans are for "a break at the end of the year. Maybe I'll spend some time overseas, and then come back and look at what my options are," he said. "I've been in operational executive roles now for something like 37 years. I'm very keen to contribute back into the business community. I enjoy policy development and if I can find some opportunities to contribute in that way I'd be delighted". He flagged the potential to take on non-executive roles in 2016.

Thodey's biggest achievements

"Besides working through the NBN contracts" – where he not only secured a role for Telstra in the lucrative project, but also billions in value – "I think my biggest achievement has been really about how we as a company united together around customers," Thodey said. "With a company the size of Telstra, getting every part of the company aligned and a part of that journey has been both challenging but incredibly satisfying."

And his regrets?

None to speak of, but there are things he would have liked to do more of. "I would have always loved to have seen customer service improve further," he said. "[I'd also liked to have achieved] greater gender balance and greater equity" [at Telstra] but I think we've laid the foundations going forward." Thodey has been a strong advocate for gender equality in business throughout his tenure as CEO.

Thodey leaves big shoes to fill...

Thodey's leadership style was a marked – and much needed – change for Telstra after the antagonism generated by former leader Sol Trujillo. The Power Index praised the way Thodey repaired government and industry relations: his straightforward, understated style won him the respect of many, including his peers. "It's astonishing to believe that he could turn it around this quickly," former iiNET CEO Michael Malone told the Index.

... And Penn knows it

"I don't mind admitting I'm a little daunted about the challenge ahead, following David's legacy," incoming CEO Andrew Penn told media and financial analysts. "But I'm very excited and I'll approach it with great enthusiasm as I accept my new responsibilities very seriously on behalf of our more than 1.4 million shareholders."

But Penn brings some of the same qualities that won Thodey respect

"I'm a very authentic, open and straightforward sort of guy and that's how I'll approach all our relationships," Penn said. "I love to continue to challenge myself. I love to continue to learn and this is a fantastic opportunity for me to fulfil that aspiration."

And he has no plans to start rocking the boat

"You should expect no substantial change to our direction," Penn said. "In particular we must continue the journey to put the customer at the heart of everything we do."