Star Entertainment Defends Paying Executive Bonuses
Star Entertainment’s Chairman defended the decision to pay massive executive bonuses in the middle of the COVID-19 pandemic. The company paid executive bonuses worth $1.4 million despite thousands of its staff being out of work.
It is no secret that the Australian gambling industry is struggling. The ongoing COVID-19 pandemic has resulted in thousands of people losing their jobs. Revenues for the big casinos are way down on previous years. It’s meant to be a time everyone pulls together as one. Meant is the operative word.
Chairman John O’Neill spoke at Star’s Annual General Meeting last week. Shareholders demanded to know why board members receive $1.4 million worth of executive bonuses at a time when Star took advantage of the government’s JobKeeper rescue package.
Managing Director and CEO Matt Bekier deferred shares worth $830,000. This is on top of commanding a salary of $2.3 million. O’Neill pointed out Bekier received $3.3 million in 2018 and $4.4 million in 2018. He also revealed Star awarded the JobKeeper money to its employees; these bonuses are separate.
“For FY2020, The Star passed on JobKeeper payments of $64.8 million to eligible employees. Every dollar was used for the purpose the Government intended. 85% flowed directly to team members who were stood down or working reduced hours. The remainder was used to return team members to their roles; an option that otherwise would not have been viable.
“There was no connection between JobKeeper and bonuses. Bonuses in FY2020 were equity incentives, not cash. They were new issue shares.
“Apart from the strategic achievements outlined earlier, there was also consideration given to retaining key talent as we prepare for a competitive casino landscape in Sydney.”
Poor Timing For Executive Bonuses
Executive bonuses have always been a bone of contention among normal working people. They’re usually astronomical in size compared to the average salary of the executive’s staff. These executive bonuses are no different.
Star laid off 90% of its workforce when the first COVID-19 related lockdown occurred. Almost 8,100 employees lost their jobs. Eligible workers received some wages via the JobKeeper scheme, but these executive bonuses are a kick in the teeth for those hard workers.
The Star secured $1.6 billion worth of funding during lockdown, which added insult to injury. Star didn’t spend this eye-watering sum of money on its staff or running costs. It used the money to help the progression of its Brisbane casino and entertainment complex development.
Star reported a $94.6 million loss for the 2020 financial year. No casino has enjoyed the past 12 months because COVID has destroyed balance sheets. Almost all casinos refused to pay their shareholders dividends, too. So why should executive bonuses be paid during these difficult, testing times?
Those In Power Are Out of Touch With The Real World
This round of executive bonuses confirms what we already know: those in power are out of touch with the real world. Paying $1.6 million in bonuses when you have thousands of staff sat at home is immoral.
The ongoing Crown inquiry adds further weight to this statement. Its board members and executives decided rules and laws don’t apply to them. James Packer received insider info and doctored financial reports to get a better price for his shares.
His Chairwoman and senior directors all but admitted they turned a blind eye to foreign VIPs. There’s now another inquiry into anti-money laundering and anti-terrorism at Crown.
Executive bonuses are rewards for success and progression. Remuneration for guiding a company to record profits. Show some awareness of those around you before making them. Bekier deferred $830,000 of share on top of a $2.3 million salary. Some of those laid off staff won’t even receive $830.