The chief executive of furniture retailer Nick Scali is set to receive a multimillion-dollar dividend payment after the company’s fortunes were boosted by jobkeeper payments.
Nick Scali received more than $3.5m from the federal government under the jobkeeper scheme – which was designed to help businesses hit by the coronavirus crisis keep staff employed – during the second half of 2020.
Over the same six months, its profit almost doubled, rising by 90% compared with the same time the previous year to reach $40.6m, the company told the ASX on Thursday.
It declared a dividend of 40c a share, to be paid at the end of March, worth a total of almost $32.4m.
Because he owns 13.6% of the company, the chief executive, Anthony Scali, is entitled to receive $4.41m when the dividend is paid.
Scali also received $2.5m from dividend payments declared last year, when Nick Scali received $3.9m in jobkeeper subsidies.
The payment of dividends and executive bonuses by companies that received jobkeeper has been controversial, with opposition frontbencher Andrew Leigh calling on Nick Scali to follow the lead of other companies and pay back the subsidy.
Leigh said the company’s own corporate governance guidelines committed it to transparency and “the highest standards of behaviour, ethics and accountability”.
“If the company wants to live out these values, then it faces a test today,” he said.
“Will they follow the lead of Super Retail Group, Toyota Australia, Domino’s and Iluka by handing back jobkeeper they didn’t need? Or will they enjoy a near-doubling in profits, and simply funnel taxpayer support through to their shareholders?”
Last month Super Retail handed back $1.7m and Toyota returned $18m. Iluka repaid $13.6m last week.
After receiving a request from Leigh, the auditor general is to investigate the operation of jobkeeper, including whether the Taxation Office, which runs the scheme, has put in place “effective measures to protect the integrity of jobkeeper payments”.
Research by corporate governance advisory group Ownership Matters shows that last year 17 companies in the top 300 listed on the Australian stock exchange received government subsidies, including jobkeeper, and went on to pay dividends totalling more than $250m.
The program is due to expire at the end of March.
Nick Scali has been contacted for comment.
AAP contributed to this report.
