Retention bonuses of up to $500,000 were paid out to five Australia Post senior employees over a three-year period, a Senate committee has heard.
The bonuses were paid on top of employee base salary and incentive bonuses, some of which were worth six figures.
While the amount of all of the retention bonuses were not available, an estimates hearing was told the highest amount paid during the three-year period was $500,000, paid out over three years.
Australia Post chief executive Paul Graham said the payments were necessary to avoid senior staff being poached by the private sector.
"It was appropriate to retain those people - these skills are very, very difficult to find both in the Australian market and indeed in the international market," he said.
"The damage that their departure would have done would have been significant ... it is not an unusual process to pay retention when people are under threat of moving to a major competitor."
Greens senator Sarah Hanson-Young said the amount paid out in bonuses was "extraordinary" for a public organisation and labelled it out of touch.
It comes after it was Australia Post chair Lucio Di Bartolomeo denied the service gave average bonuses of up to $168,000 for employees who earn $300,000 and $400,000 a year.
Instead, he said the payments were "short-term incentives" for staff.
"Clearly performance outcomes from year to year may well see different payments being made," he told estimates.
"They're not increasing pay, they're not increasing bonuses, they're just simply getting more of what was at risk for them, rather than, obviously (what) occurred the previous year."
The amount paid out in bonuses is more than eight times the value of the controversial Cartier watches.
Four luxury watches worth an almost $20,000 combined were handed to senior employees as a gift for securing a lucrative contract.
The scandal over the watches left to then-chief executive Christine Holgate standing aside.
