Is there a worse look during an economic crisis than a government agency showering its executives with millions in cash and other perks?
It cost Australia Post’s CEO Christine Holgate her job when it was revealed her executives took home $20,000 worth of Cartier watches.
Yet this morning the government has been strangely silent on a far larger example of corporate largesse by another publicly owned company.
NBN Co revealed it paid an extraordinary $77 million in short-term bonuses to executives and employees over five months — between July and December 2020 — right in the middle of Australia’s first recession in decades.
The amount is eye-watering and well and truly eclipses Australia Post’s watch indiscretions (indiscretions Scott Morrison called appalling and “disgraceful”).
Yet the figures emerged only as part of a political football in the Senate after NBN responded to questions on notice 47 days after they were due.
Far from Morrison’s vocal indignation over the Australia Post affair, the government has so far declined to comment, with Labor accusing NBN and Communications Minister Paul Fletcher of going so far as to try to prevent the Senate from getting the information.
So who got the money?
More than $3 million went to the executive team. CEO Stephen Rue took home $1.17 million in bonuses for the year. His bonus alone is twice Morrison’s salary, and takes his total salary to $3.14 million, making him one of the best paid government employees.
The rest was paid to NBN employees through a short-term incentive scheme.
But not every employee was well looked after. The bonus scheme was paid out not only in the middle of a recession but at a time in which the agency shed more than 800 jobs in a long-anticipated downsizing.
Incredibly, NBN chairman Ziggy Switkowski noted the poor timing in the company’s annual report but said that since bonuses were not calculated on head count they would be paid regardless.
Will Morrison decide that $77 million in bonuses is as bad a look as four luxury watches? So far he remains silent.
Our humble and obedient servants are paid quite significantly by their security. The fattest cats should be paid no more than (say) five times the wages of the thinnest. In fact it would be rather pleasing to find that the fattest pigs in private industry were capped in the same way.
These NBN guys would have the same job security as the private sector. All contract based with termination clauses.
None of them are public servants.
Ziggy “Nuclear Meltdown” Switkowski. I’d almost forgotten about him.
What’s in it for Scomo is always my question. Perhaps Jen had the answer…
Isn’t it always donations/revolving doors/Rupert says? In this case, a dysfunctional NBN was what Rupe ordered and Turnbull arranged. The lead gangsters are rewarded.
I’m not against bonuses, per se, in what are state owned enterprises. If corporates get them, these guys have to, and it’s mostly guys.
But bonuses are everywhere and always counter-productive and mostly BS. They encourage short term thinking over long term strategy, apply the band-aid quick fix rather than the root and branch solution, and lead to ‘yes-men’ cultures.
Actual public servants should never get them, but neither should employees of state owned enterprises or employees of corporates.
The bonus system needs to die, a product of the US principally, and glorified and made normal by all those appalling ‘business schools’ propping up universities with outrageous fees for glorified cult degrees, MBAs and the like.
Totally agree DB. I would add that in my experience as a former public servant, the bonus system was a form of theft. It encouraged managers to steal the credit from employees further down the ladder who came up with innovative ideas and discouraged these employees from taking their work seriously.
Totally agree – I call it the MBA-isation of the world – the idea that you can apply a standard set of principles to running a business/department/university/etc regardless of your knowledge of the industry or field. A whole generation has grown up on the idea that as long as they have this degree they can run anything, and deserve huge rewards in return. The world is littered with entities (university departments, parastatals, utilities etc) that have been rendered “efficient” by MBAs and now provide a fraction of the value to society that they used to.
Clearly shows that Morrison’s confected outrage over the Cartier watches was nothing but a ‘look over there’ moment that the media fell for. And this $77m is going to be ignored in the shadow of the Brittany Higgins matter.