BCA boss Jennifer Westacott blasts bonuses for execs from JobKeeper cash

BCA boss Jennifer Westacott has criticised executives who received bonuses as their companies took billions in taxpayer-funded emergency support.

Business Council of Australia chief executive Jennifer Westacott said businesses on JobKeeper also paying dividends was a more ‘complicated’ issue.

Business Council of Australia boss Jennifer Westacott has blasted executives who received bonuses even as their companies took billions in taxpayer-funded emergency support through the COVID-19 crisis.

“In my view, companies should not be paying executive bonuses if they are receiving JobKeeper,” Ms Westacott said. “It doesn’t make sense. It wasn’t designed for that. It was designed to keep people working.”

During the recent reporting season a number of listed firms that received wage subsidy payments also paid bonuses or dividends.

For example, retailer Accent – which operates chains such as The Athlete’s Foot – received $13m in JobKeeper and gave its CEO a $1.2m bonus. Star Casino took $64m in taxpayer support, and announced a $800,000 equity bonus for its boss.

Retail landlord GPT, online job site Seek, and homeware retailers including Nick Scali and Adairs also announced large shareholder payouts as their bottom lines were propped up by the JobKeeper scheme.

But Ms Westacott was less willing to criticise those firms which chose to pass on government stimulus to shareholders via dividends, saying it was a “more complicated” issue.

“Dividends are usually part of a long-run policy of companies to their shareholders. And let’s not forget, who are many of the people who receive dividends? Self-funded retirees, mum and dad investors and of course everybody through superannuation.”

Nevertheless, Ms Westacott said: “If I were those companies, I would exercise some very careful judgment.”

Josh Frydenberg has refused to condemn businesses that used stimulus payments to pay executives bonuses or shareholders dividends.

“In my view, we want businesses to be profitable, but it’s up to businesses who are accountable to their shareholders and owners to take decisions about how much they pay their executives and how they distribute the dividends,” the Treasurer said last week.

Ms Westacott also said the government needed to “stay the course” and phase out the JobKeeper scheme over coming months, saying the measure was “having a lot of distortionary effects”.

“You hear of restaurants making a 75 per cent increase in profits when they haven’t been open — that doesn’t make any sense,” she said.

The wage subsidy program, and measures such as the business cash flow boost payments, drove a massive 15 per cent surge in corporate profits during the June quarter, even as overall sales dropped about 10 per cent over the same period, recent national accounts figures showed.

Companies have also received interest and rent relief from landlords and lenders.