Woolworths CEO Brad Banducci gives up potential $2.6 million bonus

Woolworths CEO Brad Banducci has missed out on millions of dollars in the wake of the supermarket giant underpayment scandal.

Woolworths chief executive Brad Banducci has walked away from a multimillion-dollar bonus after the supermarket giant was engulfed by an unprecedented underpayment scandal.

Late last month, it emerged that Woolies had underpaid nearly 6000 employees over the past nine years with repayments expecting to cost up to $300 million.

The massive slip up made international headlines as it was one of the largest underpayment cases to become public on record.

It was discovered during a review triggered earlier this year by the implementation of a new enterprise agreement with employees at all supermarkets and the smaller Metro stores.

The underpayment affected “salaried team members”, not checkout and supermarket floor staff.

Woolworths CEO Brad Banducci said the pay cut was the right thing to do. Picture: AAP Image/Wayne Taylor

But several weeks on from that revelation, it has been announced Mr Banducci has given up a whopping $2.6 million as a direct result of the crisis.

Chairman Gordon Cairns will also drop his earnings by 20 per cent.

According to the Sydney Morning Herald, Mr Cairns raked in $670,000 in directors fees in the last financial year, which means he could wind up with a $134,000 pay cut this time around.

“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,” Mr Cairns said in a statement.

Mr Banducci said he had little choice but to take the pay cut.

“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,” he said.

Mr Cairns’ and Mr Banducci’s pay decision was supported by the Woolworths board.

The Woolworths underpayment scandal is one of the biggest in history. Picture: AAP Image/Richard Gosling

“As a Group, we have let many of our salaried team members down. And our priority right now is to ensure that they receive the money they are owed as quickly as possible,” Mr Banducci and Mr Cairns said in a joint statement.

“Our goal remains to finalise a full review of this issue by the end of the financial year.”

But don’t feel too sorry for Mr Banducci — he will still take home $5 million in vested long-term incentives awarded to him in 2017 and a salary of around $2.6 million, the Sydney Morning Herald reports.

The Woolworths scandal follows a number of other high-profile retail networks and hospitality businesses which also failed to meet industry standards in recent months.

These include Neil Perry’s Rockpool Dining Group, which owes staff at least $10 million, and fellow celebrity chef George Calombaris, who repaid workers $7.8 million, with the Fair Work Ombudsman expressing frustration at adding another major company to the list last month.

“(We are) shocked that yet another large, publicly listed company has today admitted to breaching Australia’s workplace laws on a massive scale,” the Ombudsman Sandra Parker said in a release at the time.

“It is particularly concerning that many of these corporates have enterprise agreements in place that they negotiated but then failed to properly uphold the minimum standards.”