The boss of one of Australia’s largest for-profit childcare companies has been unable to tell an inquiry whether his bonuses were docked over a rise in safety breaches.
Tim Hickey, the chief executive officer of Affinity Education Group, appeared at a state parliamentary inquiry into the sector on Tuesday morning.
Mr Hickey told the inquiry his bonus payments were tied to his key performance indicator of delivering safe and high quality centres.
But when asked by the chair, Greens MP Abigail Boyd, whether he received the full amount in the past few years, he was unsure.
The inquiry asked Mr Hickey to explain the “significant decline” in quality and safety since his company was taken over by the private equity firm. (ABC News: Simon Amery)
“I’d have to get back to you on that. I don’t believe I have, but I don’t want to misinform the inquiry,” Mr Hickey said.
“It’s a significant amount of money though. I would know if I’d got my whole $300,000 to $400,000 bonus every year,” Ms Boyd said.
Mr Hickey said he could receive an annual bonus of up to half of his $625,000 base salary.
Labor MP Anthony D’Adam pressed the chief executive on what dollar amount was at stake if he failed on safety questions.
“Quite frankly, if I fail at a significant level of safety and quality I can receive nothing,” Mr Hickey said.
Inquiry told of breaches
Earlier, the inquiry heard the rate of breaches at Affinity Education Group centres climbed from 30 per cent above the state average to 70 per cent after the company was bought by Quadrant Private Equity in 2021.
Ms Boyd asked Mr Hickey to explain the “significant decline” in quality and safety since his company was taken over by the private equity firm.
“I don’t work for private equity, I work for Affinity, and my job is to sustain profitability in our centres so that we can reinvest back into the educators, back into the centres,” Mr Hickey said.
Investigating Australia’s childcare crisis
As ABC Investigations reported in May, Affinity Education Group centres were slapped with more than 1,700 regulatory breaches between 2021 and 2024.
In one case, a baby was slapped in the face by a childcare worker at an Affinity Education Group centre in South Strathfield, in Sydney’s inner west.
Some staff and parents told Four Corners the company’s business model prioritised profit over care.
CEO quizzed over financial penalties
The CEO of G8 Education, Pejman Okhovat, was asked whether he stood to suffer financial penalties over safety failures at childcare centres.
“I personally don’t wake up every morning thinking about that,” Mr Okhovat said.
The inquiry heard Mr Okhovat earnt $3.3 million last year, more than half of which took the form of bonuses and “long-term incentives”.
Ms Boyd quizzed Mr Okhovat about his bonuses. (ABC News: Simon Amery)
The CEO of the ASX-listed giant — which owns more than 20 childcare brands — faced questions about an incentive scheme that awards centre managers a 10 per cent bonus, largely based on occupancy rates.
“We’re hearing from people in the sector that this creates a culture of you sort of don’t speak up and do anything that might impact on profitability or the occupancy rates of the centres, because then you’re not going to get your bonus,” Ms Boyd said.
Mr Okhovat said a centre’s occupancy fundamentally reflected the local community’s trust in it.
“If you have a poor reputation, you do not get the occupancy,” he said.
Ms Boyd read out a series of breaches at G8-owned centres, including a child at St Marina Early Learning Centre in Parramatta being slapped and pinched on the face, and children being exposed to mould in cot rooms.
Mr Okhovat said the company had strengthened training, with 95 per cent of its centres now meeting and exceeding standards.
Senior managers at other major childcare providers, Little Zak’s Academy and Busy Bees, were also scheduled to give evidence.
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