Woolworths CEO cuts bonus pay after company shortchanged staff
27 November 2019, Written by Matt Ogg
Two key leadership figures at Woolworths Group (ASX: WOW) have decided to give their pay packages a haircut in the wake of the retailer's staff underpayment scandal last month.
A review from Australia's biggest retail chain found 5,700 of its employees had been underpaid to the tune of $300 million since 2010.
The Fair Work Ombudsman (FWO) Sandra Parker expressed shock at the findings, noting an investigation would take place and Woolworths would be held to account for breaching workplace laws.
"Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff," Parker said.
Today Woolworths CEO Brad Banducci and chairman Gordon Cairns acknowledged their leadership responsibility for the payment shortfalls.
"I have made the personal decision to forgo my F20 short-term bonus because I believe it is the right thing for me to do as CEO," says Banducci, whose target short-term bonus for F20 was $2.6 million.
Banducci earned $12.6 million in FY19 including a $6.9 million of long term incentive (LTI) bonus. His target remuneration had been $7.9 million and the board had laid out a maximum remuneration target of $11 million, which he exceeded.
As of September, Banducci's family trust held 195,808 shares in Woolworths, worth around $7.67 million today.
Cairns opted to cut his board fee by 20 per cent from last year's $670,000.
"I accept that, as the chairman of the board, I have a higher level of responsibility than my board colleagues, and therefore have decided to take a 20 per cent reduction in my Board fee for F20," he said.
Both leaders admitted the board had let their salaried team members down.
"And our priority right now is to ensure that they receive the money they are owed as quickly as possible," Banducci and Cairns said.
"Our goal remains to finalise a full review of this issue by the end of the financial year. Once this is finalised, further consequences will be considered by the Board.
"Woolworths Group will provide further updates at the Group's Half Year F20 results in February."Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Author: Matt Ogg