Why fat cats are pocketing $6m in bonuses

The organisations said the cash handouts were critical in order to stop employees from being poached to the private sector.

Over the last financial year, Australia Post paid out $4.5m in bonuses to its current and former senior executives, while NBN Co gave $1.6m in bonuses.

In a letter, Finance Minister Katy Gallagher and Communications Minister Michelle Rowland asked the organisations to explain the reasons behind the bonuses.

The ministers also asked both companies to “support an improved governance and accountability framework for remuneration arrangements”.

An Australia Post spokesperson noted the organisation needed to remain competitive against Amazon and DHL.

“This involves competing with the private sector to hire from the same limited talent pools to ensure we continue to meet our strategic objectives as well as community expectations,” they said.

“In designing the FY22 variable remuneration frameworks, we have considered the Australian Public Service Commission (APSC) guidance and ensured alignment with its principles and targets are set to incentivise actual performance that produces improved outcomes for Australia Post, our customers, shareholders and the community.”

Public fury over executive bonuses paid out prompted a federal review last year into pay entitlements.

As a result, the APSC updated guidance, directing against the “broad use of performance bonuses”.

Australia Post’s top earner was chief executive Paul Graham, who was paid a $885,022 bonus on top of his base $1.15m base salary.

NBN Co chief executive Stephen Rue took home more than $2.93m in pay last year, including superannuation and long service leave.

An NBN Co spokesperson said the company’s short-term incentive program was “limited to a small group of senior executives”.

“NBN Co benchmarks senior executive remuneration against other comparable organisations,” they said.