The Qantas Board has reduced its $23 million payout to former CEO Alan Joyce by $9.26 million as other senior execs faced similar cuts as part of key review recommendations instigated in October 2023 to address the reputational and litigation damage caused to the national carrier in the preceding 12 months.
The Qantas Board tapped business advisor Tom Saar to oversee an independent governance review and report on areas of improvement, some of which are already underway or implemented such as the earlier installation of Group CEO Vanessa Hudson last September.
His 32 recommendations included senior management remuneration amendments and more detailed reporting on customer metrics and employee engagement amid the airline’s erosion of trust with internal and external stakeholders.
What went down
It also follows as Qantas lost its High Court case over the illegal sacking of 1,700 ground staff in 2020 and a recent settlement with the Australian Competition & Consumer Commission (ACCC) over the false advertisement of tickets for cancelled flights in 2022.
Joyce’s remuneration amendment includes Qantas shares worth $8.36 million and docking his short-term incentive bonus by 33 per cent to $900,000.
The Qantas Board will also cut short-term bonuses for current and former senior execs by 33 per cent, making an overall reduction of $4.1 million for FY23.
The Qantas Board warned last year that Joyce’s total payout amount would be pending the outcome of the ACCC probe.
In a statement to the Australian Securities Exchange (ASX), Qantas said: “The events that damaged Qantas and its reputation and caused considerable harm to relationships with customers, employees and other stakeholders were due to a number of factors.”
“While there were no findings of deliberate wrongdoing, the review found that mistakes were made by the board and management which contributed to significant reputational and customer service issues.”
Qantas responds to the review
Board Chair-Elect John Mullen said the review provides clear direction for the Qantas Board and management to build a better, stronger airline and restore pride in the national carrier.
“It’s important that the board understands what went wrong and learns from the mistakes of the past as it’s clear that we let Australians down,” Mullen said.
“Vanessa and her new management team have made positive progress towards delivering better outcomes for customers and employees, but there is still a significant amount of work to be done to rebuild the trust of all stakeholders.
“The implementation of the recommendations in the report will result in stronger governance and better decision-making within Qantas and ultimately better outcomes for our stakeholders.”
Current Chair Richard Goyder announced his retirement from the Qantas Board last year, effective on 16 September 2024 ahead of the AGM in October.
TWU reacts
The Transport Workers’ Union (TWU) has welcomed the news but says the airline still has a long way to go righting the wrongs of the recent past.
“The millions that have been withheld from Joyce and the board are a drop in the ocean compared to what they’ve already received but it is the right decision,” TWU National Secretary Michael Kaine said.
“Under incoming Chair John Mullen we are beginning to see signals of a positive movement back towards the Spirit of Australia. But a deeply-embedded culture of antagonism towards workers is not going to change overnight. The scale of devastation wrought by Alan Joyce is immense and will require a seismic shift in culture and attitudes.”
“1700 illegally outsourced Qantas ground staff still have not received a cent of compensation for the anguish they’ve endured the past three years. We need to see those workers receive compensation, and we need to see Qantas 100% committed to the cultural change it has promised and is in desperate need of.”
Read the full report here.
