The chief executive of icare will receive a quarter-of-a-million-dollar boost to his salary as part of $3.5 million in pay rises to be shared among executives after the scandal-ridden state insurer replaced controversial executive bonuses with a fixed increase for top staff.
Icare’s new remuneration scheme will guarantee 116 executives a pay rise worth 60 per cent of their maximum bonus, which lifts the salary of CEO Richard Harding – one of the top-paid public servants in NSW – above $1 million, icare has confirmed.
Icare chief executive Richard Harding, one of the top-paid public servants in NSW, will receive a $247,000 pay rise to take his salary over $1 million.
Seven of its eight group executives will receive pay increases of more than $100,000 despite another challenging year for the insurer, which had to be bailed out by the NSW government at a cost of $1.9 billion in the latest state budget.
NSW Labor has slammed the steep pay increases, saying there was no case for rewarding executives while the insurer had lost billions, but an icare spokesman said it would lower the insurer’s overall remuneration budget and was necessary to attract talent.
Icare has been the subject of intense scrutiny since an investigation by the Herald and ABC TV’s Four Corners in 2020 revealed the underpayment of claims to injured workers while senior executives claimed almost $4 million in salaries and bonuses. Harding was among several executives who joined icare in 2021.
The insurer, which provides workers’ compensation insurance to 3.6 million public and private sector employees in NSW, has since been forced to repay $38 million to 53,000 injured workers. A subsequent parliamentary inquiry also exposed a litany of problems, with some staff members alleged to have stolen tables, televisions, crockery and iPads from its office.
A separate review by former judge Robert McDougall, QC, found icare’s workers’ compensation scheme suffered from a failure of governance, sloppy execution and difficulties in getting injured workers access to their entitled benefits.
Chairman John Robertson earlier this month announced the insurer would “remove performance incentives” as part of its strategy reset following the McDougall review. Instead, Robertson said it would “adjust” the fixed pay of affected employees.
But that means a guaranteed sharp increase in executive pay packets – an average of $29,784 across each of the 116 employees, according to Labor’s calculations based on bonus figures released under a parliamentary call for papers – after the insurer did not pay any bonuses for the past three years.
Robertson told the Herald on Monday that attracting and keeping talent was key to icare’s operations. “To do this it must remunerate appropriately and competitively,” he said.
“Executive remuneration at icare was covered in the McDougall review, which acknowledged senior executive packages were far below those for private sector insurance companies. The review found executive remuneration at icare is appropriate given the organisation’s size, purpose and responsibilities.”
He said that “independent benchmarking” had confirmed the chief executive’s remuneration ($1,066,069) was “well below private sector peer equivalents and is appropriate relative to similar public sector organisations”.
“Setting an effective remuneration framework is ... essential for ensuring icare is able to continue to progress its ambitious change program and deliver improved outcomes for the people of NSW,” Robertson said.
Labor’s treasury spokesman Daniel Mookhey said the insurer’s new pay policy was “proof the government has lost touch with reality”.
“The government is telling teachers, police officers and paramedics to cop a real-wage cut. Yet icare’s top executives are all getting massive pay increases,” he said.
“There is no case whatsoever to reward icare’s top brass with even more money when they’ve lost billions of dollars.”
Labor also wants legislation governing the insurer to come before the upper house after the government blocked its attempt to strip icare executive bonuses in the lower house earlier this year. However, the government has not scheduled a debate.
The Herald put questions about icare’s new remuneration scheme to Finance Minister Damien Tudehope, and asked whether the government would schedule a debate before the end of the year, but a spokeswoman for the minister directed questions to icare.
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