An investor-led lashing awaits Woolworths over a $300 million wages scandal that blighted an otherwise strong year for the supermarket giant.
Shareholders will vote on whether the company has shaved enough from its executive team’s pay packets following October’s revelation it had underpaid at least 5,700 staff by as much as $300 million over nine years.
Chief executive Brad Banducci has already given up a potential $2.6 million bonus and chairman Gordon Cairns has also taken a 20 per cent cut to his $790,531 board fee after the company only discovered it had been keeping cash from employees when shocked store managers complained they were earning less than their staff.
“To discover that we have underpaid so many of our team members has been incredibly disappointing,” Mr Cairns will tell Monday’s annual general meeting in Sydney.
The company said last month that returning the cash plus interest to staff will result in a one-off remediation charge of between $200 million and $300 million in February’s first-half results, although the final numbers of staff affected and wages underpaid could climb.
Woolworths is, however, defending itself against an employee class action which accuses it of substantially underestimating the scale of the underpayment bill.
Investors will also vote at Monday’s meeting on whether to push ahead with the first stage of the planned restructure and demerger of Woolworths’ hotel, liquor and gaming businesses.
The segment is set to become a new listed entity called Endeavour Group in 2020 if all goes to plan.
The underpayments scandal comes during what has otherwise been a successful 2019 for the company, with full-year profit up 7.2 per cent to $1.75 billion and comparable sales at its core food segment up 3.1 per cent in spite of 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 1,000-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.
Shares in Woolworths were worth $37.42 before trade on Monday, up 27.19 per cent in 2019 having touched a record high of $40.04 earlier this month.
AAP
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