Snowy Hydro 2.0 bosses get $4.5m in bonuses

Nine executives on the Snowy Hydro 2.0 scheme were awarded $4.5m in short-term bonuses in the past year, despite the project facing major cost blowouts.

Malcolm Turnbull at the Tumut 3 power station in Talbingo, NSW, in 2017. Picture: AFP

Nine executives on the Snowy Hydro 2.0 scheme were awarded $4.5m in short-term bonuses in the past financial year, despite the project facing major cost blowouts and a delay of up to six years until completion.

The giant pumped hydro’s top bosses raked in a total of nearly $11m in their pay packets, which were up by more than 20 per cent on the year before. The payments were buoyed by a 30 per cent increase in bonuses.

The significant boost in salaries comes as the project continues to be beset by myriad delays, which have included the collapse of one of its main contractors, Clough, and the abrupt exit of its chief executive, Paul Broad.

Significant derailments in the project and closure of coal-fired power stations have triggered the Australian Energy Market Operator to warn of a supply crisis in the next few years unless new ­supplies come online or Snowy 2.0 can claw back delays.

The project’s key building partner has also been facing accusations of payment delays to contractors, while workers have threatened to strike after maggot-infested food was served onsite.

The project’s latest setback has seen its star tunnelling machine Florence forced to stop operations for some months after struggling with soft ground conditions in Kosciuszko, with the machine having moved only 150m since it was deployed in March 2022.

When it was announced by Malcolm Turnbull in 2017, the former prime minister promised first power in 2021 at a cost of $2bn. Latest estimates from Snowy Hydro suggest the project is expected to blow out to nearly $6bn and be completed at the end of 2027.

According to the project’s annual reports, Mr Broad increased his pay by more than $500,000 to $2.7m in the 2021-22 financial year after being granted a short-term bonus boost, compared with his $2.2m pay packet in the previous year. This was more than double the salary of the rest of the executive salaries, with Snowy Hydro chief commercial officer Gordon Wymer the second-­highest paid on $1.3m.

Mr Broad said he would have taken a “fraction” of what he got paid to do the job and taxpayers were getting good value for money. “Snowy Hydro was worth $4.5bn when I got there and today’s value is worth $20bn,” Mr Broad said. “Snowy Hydro is a fabulous company and the taxpayers should feel proud of it. I would have taken a fraction of that to do the job.”

The new figures were revealed by Finance Minister Katy Gallagher in questions on notice to Greens senator Barbara Pocock, who sought clarification on the justification of large increases to salaries and bonuses while general wage increases were “running at just a few per cent”.

In a detailed response, Senator Gallagher said there were a number of factors that contributed to a 19.6 per cent increase in executive salaries in the past financial year.

This included a 5.5 per cent increase in base salaries, 29 per cent increase in short-term reward payments, a 60.8 per cent increase in long service leave provisions and a $366,454 increase in long-term pay provisions.

The federal government last year ordered the Remuneration Tribunal to review payments awarded to the position of Snowy Hydro chief executive.

A spokeswoman for Climate Change and Energy Minister Chris Bowen said the government expected the review would set ­expectations for the rest of the management team, particularly in relation to bonuses.

The spokeswoman said the government expected government-owned enterprises to “ensure executive remuneration is appropriately governed and aligned to key performance ­indicators and relevant industry benchmarks”.

The federal government refused to reveal whether Mr Broad was awarded a termination payout after he exited the company last year, and instead said it would be disclosed in the company’s ­annual report later this year.

The annual report will also reveal the salary of newly appointed chief executive Dennis Barnes, but Senator Gallagher flagged key differences in his remuneration package.

Snowy Hydro was contacted for comment.