One of Australia's most beloved companies has received an embarrassing first strike on executive pay from shareholders upset that bonuses were not slashed further following the deaths of two workers in separate incidents.
Woolworths cut the short-term incentive pay of roughly 9000 managers by 10 per cent following the deaths, with more cuts to possibly follow once an investigation is complete, chairman Scott Perkins told shareholders at Woolworths' annual general meeting on Thursday.
But 28 per cent of shareholders apparently thought that wasn't enough, and voted to reject the remuneration report, with just 72 per cent voting in favour.
A 75 per cent majority was needed, so the board receives a strike under the Corporations Act 2001. If Woolworths receives a second strike next year, that will trigger a board spill, with all directors having to stand for re-election.
Both deaths were equipment-related. In December, a contract cleaner was killed after being crushed against a wall by a floor polisher while cleaning a Woolworths store in Newcastle about 5am.
In June, a worker was killed and two others injured after they were hit by pallets from a jammed pallet-stacker at a distribution centre in western Sydney.
"We are fully co-operating with SafeWork NSW to ensure a thorough review is completed with no stone left unturned," Woolworths Group chief executive Brad Banducci said.
Mr Perkins said depending on the outcome of the investigation, the reductions in executive bonuses could be material. He defended the board's approach as having sent a strong signal on safety, but said it would reflect on the feedback.
Meanwhile Mr Banducci said Woolworths was putting in place additional measures to support its employees after more than 3000 acts of violence, threats and abuse were reported over the past 12 months.
It is investing in CCTV upgrades, two-way radio headsets and virtual reality violence and aggression training, and providing team members with an app that provides resources related to wellbeing and safety.
Woolworths - which has more than 200,000 team members, making it Australia's largest private employer - is also working closely with the government to advocate for legislative changes to further protect retail workers, he said.
"To be honest, it just feels like a dissonance in society," Mr Banducci said, responding to a shareholder question about the aggression.
"We accept that people are under pressure, but respect is fundamental."
Woolworths felt uncomfortable taking this step, Mr Banducci added.
"It's our grand obsession to do everything for our customers - so to ask our customers to treat us with respect is something that has taken us a long time saying, because of the DNA of Woolworths, but unfortunately, we feel compelled at this point."
The group on Wednesday reported that sales for the 14 weeks to October 1 increased by 5.3 per cent to $17.2 billion, driven primarily by its Australian supermarkets business.
Big W sales were down 5.5 per cent on the prior year, but there was a modest improvement in the latter part of the quarter.
"While customers continue to be cautious and are trading down within categories, we are seeing solid growth in summer clothing and in opening price point products that offer real value," Mr Banducci said.
The Christmas trading period will be key in determining the success of the half, he said.
