Childcare operator’s major shareholder seeks details as share slide continues

A major shareholder in G8 Education has asked the embattled childcare provider to provide details of its staff screening processes and how it’s working with affected families, following revelations that an accused child sexual abuser worked at four of its centres.

On Friday, a day after shareholder advisers raised the prospect of clawing back some of G8 CEO’s Pejman Okhovat’s pay, the union representing workers in the for-profit sector also spoke out, questioning if CEO bonuses and company profits should instead be invested into child safety.

G8 Education CEO Pejman Okhovat. The childcare provider is facing instensifying scrutiny following revelations an accused child sexual abuser worked at four of its centres, which has triggered a dive in its share price. Credit: Glenn Campbell

A G8 spokesperson told this masthead that chief executive Pejman Okhovat and chief operating officer Shane Dann have been on the ground in Melbourne meeting with some of the affected families.

“As we learn more about what is unfolding, we are fully co-operating with Victorian police, the Victorian government and other relevant authorities as part of the investigation,” the spokesperson said.

“We are committed to supporting the legal process in every way we can.”

Almost $170 million has been wiped off the value of G8 Education since the sexual abuse allegations surfaced on Tuesday. G8’s share price dropped another four per cent on Friday to 96¢, dipping below the dollar mark for the first time this year.

On Friday, Tanarra Capital, founded by investment banking heavyweight John Wylie and one of G8’s largest investors, became the latest to sharpen their scrutiny of the company. Tanarra has close to a 12 per cent stake in G8, according to the childcare provider’s most recent annual report.

“Like the rest of the community we have been shocked and distressed at what has unfolded,” a spokesperson told this masthead.

“Our primary concern is for the victims and their families. People rightly want to know how this happened.”

The spokesman said Tanarra had “been in close contact with the [G8] Board and have proposed specific actions for the company”.

The proposed actions are understood to include how G8 deals with affected families and the community, as well as related to its governance, including procedures for employee checks and monitoring of staff.

“In this process, we want to ensure the primary focus is on supporting victims, their families, and affected communities. We also want to ensure staff who may have been in contact with the suspect in this case are supported,” the spokesman said.

“We expect there to be a detailed review of operations and screening procedures, and we will be liaising with the company in this process,” the spokesman said.

HESTA, one of several super fund investors in G8, also spoke on Friday, adding pressure to the company.

“The recent allegations against a former G8 Education employee are very concerning and our thoughts are with affected families,” a HESTA spokesperson said. “We are continuing to monitor the situation closely and the steps G8 take to ensure child safety.”

Meanwhile, Carolyn Smith, the national director of the United Workers Union which represents educators in for-profit early childhood care centres, said providers across the sector should rethink directing profits to bonuses given the litany of concerns that have been raised about quality of care, which were evident even before this week’s abuse allegations surfaced.

“If profits are going to CEO bonuses, it’s money not going into the service they provide, and it impacts the quality and also the safety of the service,” Smith said. “Most Australians would agree that children’s safety and quality of care has to be the focus of our early learning system ahead of profit.”

Okhovat received remuneration totalling $3.3 million in 2024. His total actual remuneration, which is sometimes used as a more accurate reflection of pay, totalled $1.53 million. As part of this, Okhovat received more than $300,000 as a short-term cash bonus, and $200,000 as a deferred cash bonus.

At G8’s annual general meeting in April, 90 per cent of bonuses were paid to leaders despite missing key targets.

Smith added: “A lot of people would be questioning CEO bonuses in this sector given what we’ve seen.

“Centres run by non-profit providers are consistently getting higher ratings,” Smith said. “I think there are some real questions and a conversation we need to have about the business model of providers, about whether they are focused on profits ahead of children’s safety.”

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