Rail board approved lavish executive payout fearing Labor election win

A scandal-ridden NSW government rail corporation became so worried that it would be scrapped after the state election that it designed a package worth hundreds of thousands of dollars for its senior executives.

Confidential documents obtained by the Herald reveal that the board of the rail corporation, which was set up to artificially inflate the NSW budget, also sought a generous bonus scheme for chief executive Benedicte Colin and her executive team.

Transport Asset Holding Entity chief executive Benedicte Colin, centre, earns almost as much as Transport for NSW secretary Rob Sharp.Credit: Wayne Taylor

They show the board of the Transport Asset Holding Entity (TAHE) approved the redundancy scheme for Colin and her senior team on June 23 last year, the day after the government got wind of Labor’s plans to abolish the rail entity if it wins the March state election.

Under the changes, Colin would have been eligible for a redundancy payout of at least $272,000 – equal to 24 weeks of her $589,375-a-year salary – if it was wound up or faced any other “significant change in government policy”.

Under her existing contract, Colin, who started as CEO in September 2021, is eligible for a six-week payout if she serves less than three years.

Colin, who manages 35 staff, earns almost as much as Transport for NSW secretary Rob Sharp, who receives $613,975 for overseeing a 14,400-strong workforce. Another eight TAHE executives earn an average of $360,000 a year.

In confidential documents, the TAHE board justified the generous redundancy scheme because of extra “uncertainty about longevity” of the corporation. It argued the uncertainty “could cause employee attrition to become a serious threat to the functioning of TAHE”.

The Transport Asset Holding Entity was set up in 2015 to shift billions of dollars of expenses from NSW’s railways off the state budget.Credit: Steven Siewert

“The organisation has attracted significant media attention and political commentary with conjecture regarding the longevity and viability of the organisation,” the document said.

TAHE’s five-strong board chaired by Bruce Morgan approved the redundancy package last June and a month later voted to sweeten the deal with a generous bonus scheme.

At the time, TAHE was reeling from revelations that it had splashed out $1 million a year on swish new offices in Sydney’s CBD instead of remaining in rent-free space in a building it owned near Central Station.

Amid the crisis engulfing TAHE last year, the government decided not to approve the redundancy and bonus schemes. A spokesperson for Treasurer Matt Kean said: “The Treasurer did not ask for any changes to the CEO’s pay structure and did not approve any.”

Other documents reveal that the board approved a recommendation that Morgan and two other directors have their contracts extended in 2022 by up to three years. It will mean that Morgan, a former chairman of Sydney Water and PwC’s Australian arm, will remain on the board until June 2025.

A government spokesperson said it was government policy to “appoint board members to boards so boards can function appropriately”. “The TAHE appointments were made 12 months ago,” the spokesperson said.

The state-owned corporation was set up in 2015 to shift billions of dollars of expenses from NSW’s railways off the state budget and into the entity.

A Herald investigation into TAHE in 2021 triggered a parliamentary inquiry and led to the Auditor-General delaying signing off on the state’s finances due to “significant accounting issues” relating to the rail corporation.

Shadow treasurer Daniel Mookhey is asking the TAHE board to explain its intentions.Credit: Kate Geraghty

Shadow treasurer Daniel Mookhey said the board needed to explain why it had attempted to give out golden parachutes to its top brass.

“A hospital cleaner isn’t entitled to a redundancy package as generous as the TAHE board was prepared to give its executives,” he said.

A TAHE spokesperson said the proposal to change the terms of employment and redundancy arrangements for the chief executive was not pursued.

“TAHE senior executives are remunerated in line with industry and state-owned corporations benchmarks. No bonuses, incentives, or non-salary items have been paid to any TAHE senior executives,” the spokesperson said.

Colin became the state-owned corporation’s third CEO in a year when she joined in September 2021.

Later that year, the corporation paid a PR company $275,000 to devise a strategy to “reframe” its battered public image.

The PR firm SEC Newgate listed a series of targets for management including two “proactive” media stories, four LinkedIn posts each month and hosting two “significant” project-related events. It advised Colin to “complete two keynote addresses, an opinion piece and/or an exclusive media interview” in 2022.

Our Breaking News Alert will notify you of significant breaking news when it happens. Get it here.