NBN 'exceptional' performance sees execs share bigger bonuses

Hailing the operating performance of NBN over the 2015-16 financial year, the company has paid over AU$3 million in short-term bonuses to its senior executives.
Written by Chris Duckett, Contributor on

Bill Morrow, the chief executive of the company in charge of rolling out the National Broadband Network (NBN) across Australia, has seen his annual pay jump by 18.7 percent to AU$3.6 million as the project gathers pace.

Morrow's remuneration package for 2015-16 included a base salary and fees of AU$2.31 million and a AU$1.24 million bonus, according to NBN Co's annual report [PDF], released on Tuesday.

For the year prior, Morrow was paid a total of AU$3 million, the bulk of which was made up of a base salary and fees totalling AU$2.28 million and a AU$483,000 bonus.

Across the company's senior executive team, AU$2.4 million in cash was paid in short-term incentive (STI) bonuses, with AU$587,000 deferred. Last year, NBN paid AU$1.6 million in cash for STI bonuses.

"Board approved an STI payout that reflected its judgment that operating performance for the year had been exceptional," NBN chair Ziggy Switkowski wrote in the report.

The annual report showed that for the full year ended June 30, 2016, NBN recorded IT costs of AU$149 million, up from AU$126 million last year; outsourcing expenses of AU$93 million, down from AU$112 million; and communication and public information costs of AU$51 million, a significant increase on the AU$28 million spent last year.

"Communication and public information costs increased by AU$23 million (82 percent) compared with FY2015 ... reflecting the growth in available NBN footprint," the report said. "This expenditure is associated with advertising and media campaigns, as well as educating end users on how to connect to the NBN network."

On Monday, NBN announced it had partnered with a former reality TV star to create a "Virtual Trainer" workout program. The cost of this partnership to NBN was not announced.

During its "exceptional" year, NBN faced an increasing number of complaints, with retail service provider (RSP) Activ8me saying last week that the NBN satellite service installation process is an absolute bugbear.

"The issues are so far removed from things that we can control as an RSP, because the NBN do all of the installs, and they sub-contract that to Ericsson, who then sub-contract that to Skybridge, and that communication about that installation process is done by those third parties," Activ8me general manager Ian Roberts said.

"[But] the first point of call for the customer when the install fails or the installer doesn't turn up, or things don't work, is to come back to us, and they might be things that we can't resolve."

Also during the year that it exceeded its short-term goals, NBN suffered a series of damaging leaks on the state of its network, which culminated in federal police raids on the offices of Senator Stephen Conroy in May, and a similar raid on Parliament House in August.

The leaked documents have been claimed by Conroy to be covered by parliamentary privilege, with the privileges committee to make a determination on the status of the documents.

Conroy, the minister responsible for the creation of the NBN, resigned from the Senate last week, and will leave the chamber at the end of the month.

In April, it was revealed NBN spends over AU$60,000 a day on legal costs. In response to Senate Estimates Questions on Notice, the company stated that between September 14, 2015, and January 31, 2016, it spent a total of AU$8,694,204 in external lawyers.

Earlier this month, NBN received AU$1 million from the federal government to help cover the cost of meeting its data-retention obligations.

Even though it is a layer 2 provider, NBN is still covered by the data-retention legislation that came into effect last October. It sees customers' call records, location information, IP addresses, billing information, and other data stored for two years by telcos, accessible without a warrant by law-enforcement agencies.

Morrow recently urged the public to forget NBN's price tag -- currently pegged between AU$48.6 billion and AU$54 billion -- and focus on the technological advances the NBN could afford in health, education, and entertainment.

All companies should be considering how to make the most of the NBN, Morrow said, urging them to get their "NBN strategy in shape".

With AAP

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