‘No superannuation fund has done more’: Hostplus fires back on Employment Hero founder’s ‘tirade’

- March 13, 2024 3 MIN READ
hostplus, Sam Sicilia
Hostplus chief investment officer Sam Sicilia
Hostplus says Employment Hero CEO Ben Thompson wants them to “pay to play” to promote the super fund on the employee platform, but they’ve turned it down because it’s “undisclosed advertising”.

In a statement to Startup Daily in the wake of Thompson publishing the letter from Hostplus to fellow investor, VC fund Airtree, which called on the Employment Hero’s board to consider whether his “position as CEO remains tenable in the light of his conduct”, Hostplus declined to say whether in had followed through on its March 5 threat to report Thompson to the corporate regulator, ASIC.

Thompson once again accused Hostplus of lying and abusing its market power in a third jab on LinkedIn this Tuesday, saying “everyone should see the consequences of contradicting the Hostplus agenda”.

The $100 billion industry super fund said in response that his “recent tirade of claims on various platforms… are completely false” and his key motivation was the company’s bottom line.

“Mr Thompson’s inconsistent and at several points, incoherent opposition to our proposed reform is the clearest proof that his concern rests not with the employee, but with the financial interests of his company,” the Hostplus statement said.

“Mr Thompson is not a champion of the employee as he claims. His intent lies only in intent lies only in protecting the source of revenue his company receives under the ‘pay to play’ model — whereby superannuation funds enter private, undisclosed, commercial arrangements with the platform to receive favourable promotion.”

Banning ads

Last week the Employment Hero CEO’s self-described “tin pot campaign” featured a LinkedIn post offering Hostplus CEO David Elia $1 million worth of advertising on Employment Hero.

The super fund declined on the basis that it objects to advertising on workforce management platforms like Employment Hero more broadly and wants it banned.

“Mr Thompson has several times invited Hostplus to participate in that model. This includes presenting us with a public “whitepaper” brochure which, in a revealing example of Employment Hero’s model, describes the Government’s employee-focused stapling reform as ‘leading to unfortunate outcomes’,” the Hostplus statement said.

“That is his company’s words. Notwithstanding our investment in the company, Hostplus has and will continue, as a separate mater, to decline Employment Hero’s offers and solicitation.”

The war of words began a fortnight ago when Thompson took Hostplus to task on the former Twitter over its submission to Treasury, responding to a consultation paper on superannuation.

He accused Hostplus of trying to put Employment Hero, which is valued at $2 billion, “out of business”.

The super fund’s view is that banning advertising in this particular sphere – Hostplus spends millions on sports sponsorships and in other marketing – creates a level playing.

“Our proposed reforms, if implemented, will ensure that no workplace platform can advertise super funds on a platform — for example, by promoting potentially underperforming “featured funds” that have entered into fee paying arrangements with the platform,” Hostplus told Startup Daily.

“The result will be an entirely objective and open process of superannuation fund selection by the employee on the platform based on proper considerations of fund performance. Any person genuinely concerned with the best interests of the employee would embrace that outcome.”

The fund pointed to comments from the CEO of Employment Hero rival Tanda, Jake Phillpot, who supports an ad ban, saying he: “can’t see any tangible benefits to employees from this practice. Although there are many benefits for software companies and their owners who pocket millions of dollars in advertising revenue.”

Continuing to invest

Meanwhile, the public slanging match has led to concerns that it may damage relations between the superannuation sector, investors and startups.

Hostplus backs companies directly, including Canva, and has also poured millions into VC funds run by the likes of Blackbird, Airtree and Square Peg. It said no superannuation fund “has done more for technological advancement in Australia” that it has, adding that without it “there would never have been an institutionalised VC ecosystem in this country”.

The fund said it “will continue to invest in technologies that help Australian employees” but has “a paramount responsibility” to protect its members from anything that undermines their financial interests.

“To that end, we will continue to engage with the board of Employment Hero regarding our corporate governance concerns raised not only by its business practices, but by the concerning behaviour of its CEO in opposition to responsible reforms aimed at benefiting our members,” Hostplus said.

Meanwhile, Airtree, which received the 4-page letter from Hostplus last week, must be left feeling like a UN observer in Ukraine.

“It’s our job as VCs to be both trusted custodians of capital and support founders in building exceptional businesses,” an Airtree spokesperson said.

“While we’re not on Employment Hero’s board, we are working with both parties to find a common understanding of the issues they’ve put forward.”

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