The Qantas Group annual general meeting (AGM) took place in Melbourne today, where the Qantas board faced an investor backlash over the Group’s recent performance.
The ABC reported that 80 investors attended the in-person meeting at the Melbourne Convention Centre today, which began at 11 a.m. AEST.
On the awkward agenda were threats to executive pay packets, including former CEO Alan Joyce’s final annual salary package of $21.4 million, questions on service and the current state of the Qantas brand, as well as concerns over the re-election of some board members and a share price that’s fallen 20 per cent in the last six months.
Here’s what’s happened
Qantas Group Chairman Richard Goyder, planning to step down in 2024, opened the AGM, saying, “It’s clear there has been a substantial loss of trust in the national carrier. And we understand why.
“There are things we got wrong. Things we should have handled better. Things we should have fixed faster. And for all of those, we apologise.”
“We also acknowledge the impact of the ACCC’s allegations and a High Court decision on the ground handling matter, which landed within two weeks of each other,” he said.
Goyder also thanked former CEO Alan Joyce, saying, “Alan was the founding CEO of Jetstar for five years before becoming CEO of the group for 15 years. He guided this company through some of its biggest challenges, which meant making some tough decisions.”
“Indeed, it is easy to forget the challenges Qantas faced in surviving through the pandemic, effectively closing down and re-starting an airline safely, and ensuring we had a future.”
With regard to executive pay packets, Goyder continued by saying he had spoken to many shareholders and is aware there would be a clear vote against Qantas’ remuneration report.
“In the leadup to this AGM, I’ve spoken directly with many of our shareholders.
“We’ve also seen the votes cast in advance of today’s meeting, as well as recommendations from proxy advisers. It’s clear that there will be an overwhelming vote against our remuneration report, which is almost a complete reversal of the 90-plus per cent support in recent years.
“But please know this: we hear the message this strong vote sends, particularly in response to broader frustration with past events, and it galvanises our efforts to restore your confidence,” Goyder said.
Qantas Group CEO Vanessa Hudson apologises
New Qantas Group CEO Vanessa Hudson followed on, saying she is resolute in ensuring Qantas restores its reputation.
“As the new CEO, I am determined to make Qantas one of the most trusted brands in this country again,” she said.
“Determined to be the company that you, as owners, are proud of – that delivers value for all stakeholders and gets the balance right.
“Doing this won’t be easy, and it will take time.
“But I’m confident we’ll succeed because of the incredible passion our people have for Qantas and what it has long represented.
Closing her address, Ms Hudson said that Qantas is determined to tackle its “big challenges” and has an “exciting future”.
“Later this month, Qantas will turn 103. There are few companies in Australia, and even fewer airlines globally, that have reached that milestone,” she says.
“While we arrive at this moment with some big challenges, we also have enormous opportunities and an exciting future.
“A future that will see our brand recover, our fleet renew, our network expand, our emissions reduced, and our people offered more opportunities.
“Collectively, we have the experience, the focus, energy, and the financial strength to achieve this. And we intend to restore your trust in the process.”
Qantas’ unredeemed COVID flight credits balance is now sitting at $520 million
Ms Hudson told shareholders the Group is now holding around $520 million of unredeemed flight credits following flights cancelled through the pandemic.
Qantas had scrapped the expiry on COVID-19 credits in August following a concerns notice from the consumer watchdog, the ACCC, which also launched legal action against the business over alleged consumer law breaches.
Alan Joyce’s remuneration package could be clawed back
Qantas Committee chair Jacquie Hey said the Qantas board still has levers available to “claw back” a substantial amount of former CEO Alan Joyce’s final payout, with $14.4 million, in addition to another $2.19 million held.
Ms Hey said the board will decide what to do with this final payout amount based on evidence, including legal challenges that the airline is facing.
Shareholders voted overwhelmingly against the airline’s remuneration report
Qantas shareholders have voted overwhelmingly against the airline’s remuneration report by a whopping 83 per cent. Only 17 per cent of shareholders voted in favour of adopting the report.
The Sydney Morning Herald reports that this is the first time Qantas has received a remuneration strike and is one of the biggest strikes ever recorded in Australian corporate history.
In response, the meeting room was reportedly filled with applause and cheers from shareholders physically attending the AGM, with Chairman Richard Goyder saying it sent a “clear message”.
What does this mean now? While the vote doesn’t have an immediate effect, it essentially puts the Qantas board on notice by shareholders to improve.
It’s a message that if the airline doesn’t turn things around by next year’s AGM, they could face a second protest vote, which could deliver a second strike — which would mean the board could be facing a spill.
