The Woolworths executive team is expected to have their bonuses cut and potentially fall on their sword, as the scale of the Woolworths underpayment scandal unfolds further.
The Australian Financial Review today reports that Brad Banducci, the chief executive of the supermarket giant, “will pay the price” and resign due as they come to understand the scale of the unfolding underpayment scandal. Woolworths executives are also expected to not be paid their bonuses for the year.
“I fully expect to have a conversation with the board on the consequences of this,” Banducci said.
“It will impact bonuses for myself and maybe there will be other things that come out of it.
“But right now our focus is on addressing the issue and then we’ll work through what this means for the executive team later down on the track.”
Earlier this year, Peter Birtles, CEO of Super Retail Group, left his position after that company was found to have underpaid $43m to their workers.
Woolworths and Super Retail Group join a host of other big businesses, such as Bunnings, the Commonwealth Bank, the ABC, Sunglass Hut and Michael Hill Jewellers, to have revealed large scale underpayment issues.
However, as it stands, Woolworths’ underpayment of $300m is by far the biggest underpayment figure to date this year.
The AFR quotes an anonymous fund manager as saying that they expect senior Woolworths management to held accountable for the scandal and as such take a hit to their executive pay.
“It speaks to the complexity of the retail award but in an organisation this size with the resource they have it’s completely unacceptable,” the fund manager said.
“I believe the board needs to take accountability and forfeit director fees, at a minimum, or lose their seats, as this is a clear failure of governance and oversight.”
To make matters worse, the Fair Work Ombudsman Sandra Parker has revealed that the FWO will launch an investigation into Woolworths. Parker added was ‘shocked’ by the scale of Woolworths underpayment and ‘not satisfied’ with their apparent transparency.
“Lately, we are seeing a disturbing number of large corporates publicly admitting that they have underpaid their staff. Some of these matters go back many years and several comprise millions of dollars owed to workers. This is simply not good enough,” Parker said.