Aussie CEO ignites war with $1m challenge
A war has broken out between two Aussie CEOs with one offering the other $1 million in free advertising and challenging his rival over his company’s sports advertising spend.
A war has broken out between two Aussie CEOs with one offering the other $1 million in free advertising and challenging his rival over his company’s sports advertising spend.
Employment Hero’s CEO Ben Thompson has gone to war with Hostplus CEO David Elia, accusing the super fund of “anti-competitive” behaviour and of wanting to shut the tech company down.
Central to the disagreement is a tech solution that Employment Hero provides to over 300,000 Australian companies to help onboard new employees, known as workplace management products (WMP).
Such software gets new starters to nominate a superannuation fund and includes advertising for different super funds.
Employment Hero said this promotes choice in the super industry but Hostplus said it is undermining the super system.
Mr Thompson said Hostplus is acting out of self-interest to prevent the super fund’s 1.7 million members moving to other super funds.
“Hostplus is being anti-competitive and are afraid that the efficiency a digital platform offers is too competitive,” Mr Thompson said.
“They don’t want that competition. And they’re trying to legislate it out of existence to stop Australians having the choice to move to another fund.”
He has also questioned the amount of money Hostplus spends on sport advertising as a way to retain existing members and attract new ones.
Hostplus is an official partner of the AFL, a platinum partner of the Richmond Football Club and the naming rights partner of the South Australian National Football League (SANFL).
Mr Thompson issued the challenge to Mr Elia on LinkedIn: “I’ve got a challenge for you David Elia. As you well know, a trustee of a superannuation fund has a fiduciary duty to spend their member’s hard earned savings in the best interests of the members.”
“I believe you’ll find that digital advertising on Employment Hero massively outperforms the $30m+ you currently spend on sport advertising, including the $2.9m you spend with your beloved Richmond Tigers.”
“So here’s the challenge. Rather than asking the government to shut us down I’m offering Hostplus $1m of free advertising on Employment Hero.”
“Once it’s spent we can compare advertising attribution performance between Employment Hero and all your sports sponsorships.”
“If Employment Hero performs best then you pay for the advertising and stop trying to shut us down.”
“If sports advertising is proven to outperform Employment Hero then it will cost us $1 million.”
“Are you up for the challenge David Elia? I think you owe it to your members.“
The dispute broke out following Hostplus’s response to a Treasury consultation on Securing Australians’ Superannuation.
“We are concerned that the way that many WMPs have operated to date, and we believe will continue to operate absent government intervention, proves that the software can and is being designed and implemented in a manner that undermines the superannuation system and harms employees,” the Hostplus submission said.
“In particular, we remain highly concerned by instances of WMPs automating the fund selection process and designing that automated system in a manner that distorts and sidesteps the critically important selection of an appropriate fund for consumers.”
Mr Thompson said that Employment Hero already has to follow advertising regulations and that super funds advertising on its WMP was no different to Hostplus advertising at sporting stadiums.
He said that, in effect, Hostplus was asking the government to pass laws which would ban WMPs from helping Australian employees consider alternative super funds and “could put Employment Hero out of business”.
A Hostplus spokesperson told The Australian that it is not suggesting WMPs should be banned but wanted to address the practice of WMPs limiting super fund choice within the platform to those that have undisclosed commercial arrangements with the platform.
The spokesperson added that WMP’s “have the capacity to provide employees with the means to search for, compare and choose from a range of superannuation funds.”
“That innovation is something we welcome and is reflected in our own member engagement channels, which encourage members to compare the performance of our product against our peers.”
The great irony of the situation is that Hostplus is an investor in Employment Hero via Airtree Ventures, an early stage venture capital company that Hostplus uses as an investment manager in the private equity space.
news.com.au contacted Hostplus for comment.
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