A parliamentary question scrutinising Western Power's decision to end performance bonuses for executives and incorporate the amount into base pay and superannuation, focusing on the decision-making process, advice sought, and performance monitoring.

AnsweredQoN 7172Legislative Assembly
Asked
21 February 2012
Portfolio
Energy

QuestionView source ↗

(1) On what date was the decision made to end the system of performance bonuses for Western Power executives and roll the amount into their base pay and superannuation entitlements and who made the decision?
(2) Was the Minister briefed on the proposal or intention to end the system of performance bonuses for Western Power executives and roll the amount into their base pay and superannuation entitlements, and if so on what date or dates?
(3) When was the Minister advised of the actual decision?
(4) Did the Western Power Board’s ‘People and Performance Committee’ recommend the change?
(5) What professional advice was sought and from whom, including any consultants, about the arrangement?
(6) Was any modelling undertaken of the likely financial benefits that would be derived by the beneficiary executives, including superannuation entitlements, and if so, what did that modelling indicate?
(7) What performance monitoring arrangement was put in place to ensure the executive teams meet expectations?
(8) What will be the consequence for any executive who fails to meet performance targets?

AnswerView source ↗

Answered
20 March 2012
Responded by
Minister representing the Minister for Energy
Response time
28 days
(1) The Western Power Board resolved to cancel Western Power's short term incentive plan on 13 June 2011. While General Managers and Managers received a salary increase as a result of this change, the increase did not offset the previous incentive payment available.
(2) Yes. The Board Chair, Mr Mark Barnaba discussed the proposal to cancel the short term incentive plan with the Minister on more than one occasion between March and June 2011.
(3)  In a letter from the Chairman dated 22 June 2011.
(4) Yes.
(5) Industry benchmarking was provided by Hay Group and legal advice by Allion Legal.
(6) There was no formal financial modelling done on the likely financial benefits.
(7) Performance agreements and development plans have been in place for all Executives since 2006 and they remain in place today linking employee performance to the corporate key performance indicators and values.
Consequences for employees who do not achieve the outcomes of their performance agreements include development in skills gaps, performance improvement plans, redeployment to a more appropriate role and may include termination.
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