Australia Post boss defends $170,000 bonuses for highly paid staff

Australia Post has defended rewarding highly paid staff with bonuses averaging almost $170,000 last financial year, with five senior employees receiving additional sums to keep them from being poached by a competitor.

A Senate estimates committee on Tuesday heard one senior Australia Post staff member would receive a $500,000 “retention bonus”, to be paid over three years, on top of his salary and annual performance bonus.

The five employees who received retention bonuses in 2020-21 were all male, with one working in the executive team while the other four were senior managers.Credit: Jason South

Thirty-one Australia Post employees who earned a base salary between $300,000 and $400,000 took home, on average, a “short-term incentive” bonus of $168,000 in 2020-21 – an increase of 22 per cent on bonuses paid to employees in that salary band the previous year.

Australia Post chair Lucio Di Bartolomeo disputed the characterisation of the payments as bonuses, saying they were part of contractual remuneration arrangements.

“We certainly don’t see them as bonuses at all,” Mr Di Bartolomeo told the Senate’s environment and communications legislation committee. “With our senior executives, we have contractual arrangements around the remuneration that provides two components of remuneration.”

He said one component of the salary was fixed while a short-term incentive was payable subject to performance, based on “identifiable, time-targeted and measurable performance outcomes”.

“Clearly, performance outcome from year to year may well see different payments being made. They are not increases in pay, they are not increases in bonuses. They are just simply getting more of what was at risk for them, rather than obviously occurred the previous year,” Mr Di Bartolomeo said.

In a separate estimates hearing on Tuesday, Finance Minister Simon Birmingham contradicted Mr Di Bartolomeo, saying short-term incentives could be called bonuses.

“A short-term incentive, which is paid against certain KPIs, I would shorthand that as a bonus,” he said. “A long-term retention payment, I wouldn’t necessarily shorthand that in the same way.”

In total, Australia Post paid more than $78 million in bonuses to 2706 employees in 2020-21. Of this, 15 employees earning $400,000 to $500,000 had an average salary top-up of almost $233,000 in bonuses.

This marks a stark contrast with the $20,000 spent by former chief executive Christine Holgate on Cartier watches for four senior employees in 2018. Ms Holgate resigned in November 2020 as a result of the watch controversy, which was fuelled by Prime Minister Scott Morrison condemning her actions on the floor of the Parliament.

The five employees who received retention bonuses in 2020-21 were all male, with one working in the executive team while the other four were senior managers.

Under questioning by Greens senator Sarah Hanson-Young, Australia Post general counsel Nick Macdonald said the largest of the retention bonuses was $500,000.

“That’s a lot of money from a public organisation. That’s extraordinary. Talk about out of touch,” Senator Hanson-Young said.

Chief executive Paul Graham said the retention bonuses were “appropriate” to retain staff with specialised skill sets.

“These skills are very, very difficult to find both in the Australian market and in the international market. They were being coaxed away by a major competitor and I felt that the damage that their departure would have done would have been significant,” Mr Graham said.

Public fury over executive pay prompted a government crackdown last year, with the Australian Public Service Commission issuing updated guidance to Commonwealth entities that bonuses should not be paid unless there were “exceptional circumstances or a contractual obligation”. But the new guidance will apply only from this financial year onward.

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