Woolworths chairman Gordon Cairns has apologised for the company’s wage underpayment case revealing it will cost the retailer close to $200 million as shareholders backed the company’s $10 billion drinks and hotel spin off.
Mr Cairns also revealed to shareholders at Woolworths’ annual general meeting on Monday the company had founder further examples of underpaid employees at its Big W, Dan Murphy’s and BWS stores, which it had flagged as a possibility in October.
“We fully expected to [find more cases] and we have,” Mr Cairns said. “But not to the same extent as in the supermarket business.”
When announcing the underpayments earlier this year, which involved over 5700 staff being short-changed due to discrepancies with the general retail award, the company estimated the full amount would be between $200 million and $300 million.
Mr Cairns said the company had already paid 70 per cent of affected workers back for the past two years of missed wages and said the full quantum would be “at the bottom end” of its previously stated $200-$300 million range.
At the four-hour-long AGM, Mr Cairns and chief executive Brad Banducci attempted to shine a positive light on the company’s wage scandal.
Despite Mr Cairns saying the issue was “incredibly disappointing”, he claimed the extensive investigation and executive pay cuts were a testament to Woolworths’ ethics.
Woolworths announced last month that Mr Banducci will forgo his short-term incentives, worth $2.6 million, and Mr Cairns’ chairman fee will be slashed by 20 per cent in response to the scandal. The company re-affirmed more consequences for executives are being considered by the board.
“The overwhelming reaction from our team, customers and shareholders has been positive affirmation for the way the company has behaved,” he said.
Numerous investors voiced concern over Woolworths’ handling of the wage underpayments throughout the meeting but shareholders kept their protests verbal. The company’s pay deal for executives received support from 94.2 per cent of shareholders.
We fully expected to [find more cases] and we have. But not to the same extent as in the supermarket business.Woolworths chairman Gordon Cairns
Other resolutions, including the re-election of director Holly Kramer, opposed by the Australian Shareholders Association, all passed comfortably with the support of at least 94 per cent of shareholders for each.
Woolworths shares rose 0.56 per cent to $37.63 on Monday.
Endeavour gets full support
Similarly, Woolworths received support from 99.5 per cent of shareholders for the restructure and eventual demerger of its $10 billion drinks and hotels business.
Anti-gambling advocates, including corporate activist Stephen Mayne, pushed the board to disclose the amount its patrons lose through the group’s network of poker machines and to better clarify its reported revenue from its gaming division.
However, Mr Cairns told the meeting the company was taking a responsibility-first stance on pokies and reinforced the Endeavour demerger was not predicated on Woolworths’ desire to extract itself from gaming.
Other topics raised at the at-times-combative meeting included the treatment of Woolworths’ supply chain workers, the company’s Business Council of Australia membership and its climate change policies.
Mr Cairns said he did not believe Australia could rely on the government to make the changes required to prevent the worst impacts of climate change and disputed the use of Kyoto carryover credits.
However, he stopped short of committing to publicly pressure other corporates to make positive change, opting instead for “lateral diplomacy” through private conversations.
Woolworths also indicated its trading for the first half of the financial year has been “pleasing” thanks to a strong performance from its Lion King Ooshies and Discovery Garden collectables, even in an “uncertain” consumer environment.
Source: Thanks smh.com