Add Category
The federal government has sought an explanation from government-owned businesses about executive salaries and bonuses worth tens of millions of dollars.
- Ministers have written to government-owned businesses about salaries and bonuses
- Senior managers have been asked to justify why the salaries are necessary and appropriate
- Australia Post's annual report shows it paid an additional $24 million in bonuses to more than 350 non-executive staff
Australia Post has been routinely criticised for offering senior staff generous salaries and bonuses, including Cartier watches, with management arguing they attract and retain experienced staff.
This week, the Australian Financial Review has reported that at least 24 public servants and government-owned business executives earned more than $1 million last year.
This includes senior staff from Australia Post, NBN Co and Snowy Hydro.
The scale of payments has alarmed Finance Minister Katy Gallagher and Communications Minister Michelle Rowland, who have both written to the organisations.
"We appreciate that executive and workforce renumeration is a matter for the board and a complex one, with the need to balance the government's expectations to manage restraint with regard to performance pay with delivering Australia Post's commercial strategy through the attraction and retention of high-calibre staff and leaders," the ministers said in a letter to Australia Post chair Lucio Di Bartolomeo.
"However, we are seeking information from a number of government business enterprises in relation to the application of performance bonus guidance and would like to better understand the basis for decisions on renumeration, including governance arrangements."
The ministers have asked senior management to justify why these salaries are necessary and appropriate within the industries they operate.
Assistant Treasurer Andrew Leigh suggested the payments were out of step with community expectations.
"Certainly, it raises an eyebrow or two in the current environment with Australians seeing real wages now lower than they were a decade ago," Mr Leigh said.
"It's a concern and that's why the minister has asked for a full explanation."
Australia Post's annual report reveals it paid an additional $24 million in bonuses to more than 350 non-executive staff, who were already paid more than $235,000.
In 2020, Australia Post scrapped bonus payments for its executive team after a series of scandals.
The letter calls on the board to explain how these payments were possible given that change.
It also said improving transparency around payments and bonuses would be "in keeping with community expectations".
In 2017, Australia Post chairman Ahmed Favour resigned after his $5.6 million salary was criticised by then prime minister Malcolm Turnbull.
In a statement, an Australia Post spokesperson said it was competing for staff with some of the "largest and most innovative companies in the world including Amazon and DHL".
"This involves competing with the private sector to hire from the same limited talent pools to ensure we continue to meet our strategic objectives as well as community expectations," the spokesperson said.
"Australia Post's variable remuneration is an at-risk performance-based component of total remuneration for eligible team members.
"Participation in these plans is typically limited to team members on individual employment contracts as part of their total remuneration package, which is benchmarked externally."'
An NBN Co spokesman said in a statement it also benchmarked remuneration against other comparable organisations to ensure it could attract and retain the talent needed to operate the network.
"The company's Short Term Incentive (STI) program is limited to a small group of senior executives with a reduced target STI opportunity in comparison with previous years," the spokesman said.
"The total pool is outlined in the company's annual report each year."