iscover
One of the three major ‘proxy firms’ representing Qantas shareholders has recommended investors vote down one of CEO Alan Joyce’s bonus packages.
The Australian Financial Review reports that ISS has told its members that his targets aren’t “sufficiently challenging” ahead of a crucial annual general meeting on Friday.
Qantas said in response that Joyce was the only CEO on the ASX 100 not to receive a bonus in three years, and added that the group was the only proxy adviser to take such a stance.
“All of the other major shareholder advisers — CGI Glass Lewis, Ownership Matters, ACSI and the ASA — are supporting the FY22 remuneration report and incentives,” it said.
The disagreement involves the shorter-term ‘executive retention scheme’, which targets include keeping Qantas’ net debt below a target level; cutting $1 billion of costs by June; and returning the wider company to profitability by the end of the current financial year.
Should those goals be met, Joyce would receive shares worth around $4 million at current prices.
The dispute comes despite Qantas this month revealing it was on course for a remarkable turnaround that will see its target an underlying profit before tax of up to $1.3 billion in the first half of the current financial year.
The result comes despite the wider group recording an underlying loss before tax of $1.86 billion in its last full-year results and claiming the pandemic cost its airlines $7 billion in total.
Qantas appears to be taking advantage of pent-up demand for domestic travel and now believes its revenue for leisure travel is at more than 130 per cent of pre-pandemic levels.
The strong performance has led to support from key figures in the airline and wider industry.
Qantas chairman Richard Goyder, for instance, used a column in The Australian Financial Review to argue that Joyce and his executive team have done “exceptionally well” to steer the airline through a pandemic that “sent other airlines and their creditors packing”.
He said Qantas is now well on its way to fixing its problems, quipping, “If you haven’t heard this, it may be because the data showing the improvement received far less media attention than stories showing how bad things got.
“In the meantime, the corporate obituary writers have been busy. Their analysis has (mostly) been unencumbered by what’s happening at other airlines, or that Qantas’ performance has turned around.”
Flight Centre CEO Graham Turner also rode to Joyce’s defence, arguing “ineffective lockdowns” were more to blame for Qantas’ troubles than its CEO.
Joyce’s annual salary, however, has increased by 15 per cent to $2.27 million despite a string of problems to plague the business this year, including record delays and hours-long call wait times.
Steve A
says:Poor AJ. No bonus for 3 years? A shocking turn of events. The one-hundred millionaire will just need to watch the half price specials at Woollies like the rest of us.
So, what about the shareholders? Pre-Joyce? 28 to 35 cps pa. Joyce years? Dividends for just 3 out of the last 14 years with only 7 cps pa average.
And staff? Up to 17,000 dispensed with, and those that were left were bashed over the head for their last sixpence.
And Customers? Forced to sleep on the floor, have their holidays without their bags, and have their refunds for cancelled flights hung onto by Qantas to fund it through COVID. And, forced to fly around on old dungers, because aircraft ordered in 2011 were only just arriving a few months ago.
And the you and me taxpayers? Forced to give our taxes to Qantas free-of-strings-attached because it is too big to fail. Hmm… exactly the same amount that QF spent on share buy backs.
Is this a CEO who really should be paid a bonus?
John
says:The more serious issue that Goyder seems not to recognise is the degradation of the Qantas culture by Joyce and his behaviour. Any CEO who fails to understand the importance of culture will not last long but will also damage the value of the company.
AgentGerko
says:It’s not difficult to turn a profit now when everyone in the country is getting out and about again and you can get away with charging ridiculous prices. I had to quote someone to fly to Japan in Jan and the QF fare was over $8000rt for ECONOMY Class! Part of Mr Joyces agreement included reducing costs by $1billion, so in effect he’s receiving a bonus payment for sacking people. But as usual he’ll get the cash and give the finger to everyone else.
Craig
says:Qantas winging again when competition threatens it like Qatar they did this also against Emirates before joining in alliance with them
Ashley
says:Would be pretty concerned if QANTAS had no ‘wings’ on their aircraft, to be able to be ‘winging’.
Pretty odd choice of word, in the fact you’re denigrating the airline.
teiemka
says:Spot on Craig, QF is a flat track bully they’re only interested in international at the moment because there’s no competition; more than half the pre COVID international capacity hasn’t been restored. They also discovered that India exists, I guess some good came from those corporate welfare repatriation flights. Funny how now all of a sudden the CEO is pointing at the OEM for aircraft delays whilst sprouting that the airline was 11 weeks from death. I’m sure the OEM had no problem delivering any aircraft to him back then.