Childcare CEO Bonuses Under Fire Amid Shocking Allegations

The board of the ASX-listed childcare provider that employed an accused sexual abuser has been criticised for lacking “sufficient expertise” to oversee child safety, with shareholder advisers questioning the CEO’s multi-million dollar pay packet amid rising reputational and financial challenges.

Roughly $120 million has been wiped off the market capitalisation of G8 Education in the two days since confidence in the childcare sector was rocked by allegations that Joshua Dale Brown committed multiple child sexual abuse offences while working at a range of early education facilities across Victoria, including at G8’s Creative Garden Point Cook, from 2017 until this May.

The revelations have so far led to a wave of snap reforms in Victoria to apply greater pressure on childcare providers to oversee staff, including a mandatory ban on mobile phones, and triggered calls for a national register of staff to more clearly communicate issues with specific workers across jurisdictions.

Scrutiny on the role of for-profit operators has also sharpened, with advocates questioning the governance of for-profit companies such as ASX-listed G8 and private equity-backed operators like Affinity.

On Thursday, the Australian Shareholder Association (ASA) raised concerns about G8’s board, which includes former CEO of Fantastic Furniture Debra Singh as chair, as well as Peter Trimble, former chief financial officer of fallen childcare major player ABC Learning, and Toni Thornton, a founding director of the private childcare enterprise Habitat Early Learning.

“While early childhood education providers carry a significant responsibility to ensure the safety and wellbeing of children, it is ultimately the board’s duty to oversee risk, ensure accountability, and uphold effective governance structures,” ASA CEO Rachel Waterhouse said.

Waterhouse said the board’s composition “continues to lack sufficient expertise in early childhood education and child development”.

“This may limit its ability to provide informed oversight of critical matters including child safety, early learning outcomes, and workforce policy. These are not only central to G8’s public purpose but also to its regulatory compliance, operational effectiveness, and long-term sustainability,” she said.

Market sources, not authorised to speak publicly on the issue, told this masthead that some big investors were on Thursday seeking meetings with G8 in the aftermath of the allegations and resulting knock to its share price.

G8’s largest shareholders are made up of investors and super funds including Allan Gray, Tanarra Capital, Wilson Asset Management, Australian Retirement Trust, Hostplus, Dimensional Entities and Vanguard.

Also on Thursday, Macquarie analysts downgraded their outlook for G8.

“There is high uncertainty concerning the quantum of potential reputational or financial impacts the incident could create,” the analysts warned.

G8 chief executive Pejman Okhovat received remuneration totalling $3.3 million in 2024. His total actual remuneration, which is sometimes used as a more accurate reflection of pay, totalled $1.53 million.

Waterhouse flagged that Okhovat’s pay packet should be examined, as the full extent of the reputational harm becomes clear.

“In the context of ongoing investigations, the Board may need to consider at the appropriate time whether any bonus payments to the CEO remain appropriate,” Waterhouse said. “Clear and timely communication will be important to maintain stakeholder confidence,” she said.

Clawback provisions exist in G8’s corporate governance practices, with leaders’ incentives able to be cancelled or unvested in “exceptional circumstances”.

At G8’s annual general meeting in April, 90 per cent of bonuses were paid to leaders despite missing key targets.

In response to the ASA’s claims, a G8 Education spokesperson said, “child safety and wellbeing are embedded into our leadership, governance and culture and are detailed in our policies and procedures”.

“The G8 Board is horrified and appalled at the nature of the allegations and deeply saddened that they occurred at a G8 centre,” the spokesperson said.

“G8 assures investors, families, team and other community that the safety and wellbeing of every child in our care is our highest priority. We are deeply committed to providing a safe, nurturing, and supportive environment for all children and families.”

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