News National Shareholder fury over Woolies underpayments scandal

Shareholder fury over Woolies underpayments scandal

Woolworths' third quarter sales fall 0.3 per cent overall.
Woolworths has copped shareholder angst over its wages underpayment scandal.
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Woolworths has admitted its wage theft is worse than first thought, with underpayment uncovered at other businesses, including Dan Murphy’s and Big W.

But chairman Gordon Cairns told the retailer’s annual meeting in Sydney on Monday that the extra cases were “nowhere near” the extent of underpayments found at its supermarket division.

He said the company expected the bill to remedy years of underpayment for thousands of staff would come in at the lower end of the $200 million to $300 million range it has previously flagged.

“We fully expected to (find more cases) and we have,” he said.

“But not to the same extent as in the supermarket business.”

Mr Cairns has already taken a 20 per cent cut to his $790,531 board fee, while chief executive Brad Banducci has given up a potential $2.6 million bonus, after Woolworths revealed it had learned it had been keeping cash from employees only when shocked store managers complained they were earning less than their staff.

Shareholders were to vote on whether the company has shaved enough from its executive team’s pay packets following October’s revelation it had underpaid at least 5700 staff over nine years.

Woolworths also faces an employee class action that accuses it of substantially underestimating the scale of the underpayment bill, something the company denies.

Mr Cairns – who took exception on Monday to one shareholder’s use of the term “wage theft” – said he did not have concrete guidance, but was hopeful the total remediation bill would be at the lower end of the $200 million to $300 million.

“To discover that we have underpaid so many of our team members has been incredibly disappointing,” Mr Cairns said.

The company’s remuneration report was approved by 94.23 per cent of shareholders, while Holly Kramer, Siobhan McKenna, Kathee Tesija, and Jennifer Carr-Smith were each successful in their bid for re-election to board.

Shareholders also gave Woolworths the go-ahead to restructure its $10 billion hotels, liquor and gaming businesses ahead of a planned demerger and likely spin-off in late 2020.

More than 99.5 per cent of shareholders approved the creation of a combined Endeavour Group via the merger of Endeavour Drinks – which includes Dan Murphy’s and BWS – and the supermarket giant’s majority stake in hotel and pokie machine operator ALH Group.

The underpayments scandal blighted what has otherwise been a successful 2019 for Woolworths, with full-year profit up 7.2 per cent to $1.75 billion. Comparable sales at its core food segment were up 3.1 per cent, despite a weak retail outlook and soft results at Big W and the liquor division.

The first eight weeks of FY20 were even better at its 1000-plus network of supermarkets, as Lion King Ooshies collectables helped to drive 7.5 per cent comparable sales growth.

Second quarter sales figures are yet to be finalised.

-with AAP

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