The Qantas Group paid Alan Joyce $21.4 million last financial year, but the former, controversial CEO risks losing up to around two-thirds of his final payment.
Released yesterday, Qantas Group’s annual report for FY23 revealed the size of Joyce’s golden handshake, but outlined his total remuneration would be subject to a $2.2 million deduction in short-term cash and equity incentives as well as an additional $8.3 million in restitution, pending the outcome of an ACCC probe into allegations Qantas advertised tickets “it had already cancelled but not removed from sale” in 2022.
When combined with additional long-term incentives already granted, the full extent of the ex-CEO’s remuneration subject to clawback and/or malus is up to $14.4 million, according to the report.
The Qantas Group’s annual report details the company’s financial performance in FY23, a year in which it saw a $2.47 billion underlying profit and a 132 per cent increase in flying compared to 2022.
However, among the positive financial updates, a series of controversies has engulfed the carrier.
On top of the ACCC claims, a Senate committee heard accusations the airline had misled the Australian public about the total value of the unredeemed flight credits held by Qantas ticketholders, while rumours floated about the airline’s involvement in a Federal Government decision to block a Qatar Airways expansion into Australia.
Most recently, the High Court ruled that the airline had acted illegally over the sacking of 1,700 ground crew members during the COVID-19 pandemic.
In the midst of this, Joyce announced his early retirement as CEO.
“Loss of trust”
In a statement on its annual report, Qantas Group chairman Richard Goyder acknowledged the group’s financial turnaround “comes at a time when the company is experiencing an acute loss of trust from the community”.
“Much of the loss of trust stems from allegations by the ACCC. We recognise the important role of the ACCC and the company has cooperated fully with its investigations, which only crystallised into material allegations when legal action was announced on 31 August this year. These allegations are concerning and have the Board’s full attention.”
Goyder also commented on executive remuneration for FY23 and into the future.
“The scorecard that determines short term incentive payments has a number of financial and non-financial measures, including safety, customer satisfaction and emissions reduction,” he remarked.
While lauding the Qantas’ operational performance, Goyder acknowledged customer satisfaction levels “are well below where they should be”.
“As a result, this part of the scorecard was judged at zero out of a possible 20 per cent and this had a corresponding impact on senior executive pay,” he stated.
“In addition, the Board has applied its discretion to reduce short-term incentives for senior executives for FY23 by 20 per cent in recognition of the customer and brand impact of cumulative events.
Goyder also confirmed that the board had “significantly increased the weighting on customer outcomes for remuneration in FY24 and introduced it as a metric on future long-term incentives”.
