NBN Co staff reap $66m in bonuses

NBN Co paid $66 million in bonuses to its staff last financial year, despite high levels of customer dissatisfaction.

NBN chief executive Bill Morrow received a bonus of almost $1.2m, boosting his total remuneration to more than $3.5m. Picture: Kym Smith.

NBN Co paid $66 million in ­bonuses to its executives and staff last financial year, despite high levels of customer dissatisfaction with the network.

The government-owned company revealed the bonuses, which were not specifically disclosed in its annual report, in an answer to a Senate committee.

The payments were based on a range of criteria, including connection of new services (30 per cent), customer satisfaction (20 per cent), and reaching the corporation’s revenue target (10 per cent).

An NBN spokesman said the corporation had met its 2016-17 revenue target, but it “did not meet its customer engagement metric”, which was reflected in the overall level of bonuses.

The spokesman said the majority of roles at NBN offered incentive payments as part of their remuneration packages, with payments based on individual and corporate performance.

NBN’s seven senior executives shared $2,447,525 in bonuses in 2016-17, including nearly $1.2m for chief executive Bill Morrow, boosting his total remuneration to more than $3.5m. The $66m in ­bonuses equates to about 8 per cent of NBN Co’s $745m ­remuneration bill for its nearly 6000 employees.

Michelle Rowland, Labor’s communications spokeswoman, questioned whether NBN Co’s revenue targets were being set ­artificially low to help staff achieve their bonuses. The corporation’s third-quarter report said it had achieved 74.3 per cent of its 2017-18 annual revenue target. The previous year, it had hit 66 per cent of its annual revenue target by the end of the third quarter.

“There are legitimate questions about whether NBN Co has set itself a 2017-18 revenue target that would’ve been almost impossible to miss,” Ms Rowland said. “It would be contrary to community expectations for executives to be receiving taxpayer-funded bonuses for hitting particular targets, if those targets would’ve been met irrespective of performance.”

NBN Co rejected the allegation. “The revenue target is not low. Activations were strong in the first half of the 2018 financial year and average revenue per user (ARPU) grew to $44,” a spokesman said. “The timing of activations and higher ARPU has set the company up well for total revenue performance for the full year.”

The disclosures come amid a surge in customer complaints in relation to the $49 billion network.

The Telecommunications Industry Ombudsman’s latest six-month report revealed a record level of NBN-related complaints, with 22,827 customers lodging ­official complaints against the network — a jump of more than 200 per cent on the corresponding period the previous year. This ­included more than 14,000 gripes about service quality, and more than 8700 complaints about ­establishing a new connection.

However, NBN Co has blamed telcos for the vast majority of the reported complaints, saying that fewer than 5 per cent (1052 complaints) were sent to NBN Co to resolve.

Mr Morrow, who is leaving his position after five years, has blamed the Turnbull gov­ernment’s multi-technology ­ap­proach for poor customer exper­iences with the network.

However, Labor — which had originally promised fibre connections to the majority of homes — has left the door open to adopt the ­Coalition’s current NBN technology mix if it wins the election.

NBN has previously argued its remuneration strategy is internationally benchmarked by Hay Group management consultants, and it pays at a median salary point “to remain an employer of choice”.