Qantas ex-CEO’s pay rises 900%, but bonus cut due to scandals
Qantas ex-CEO's pay rises 900%, but bonus cut due to scandals
Qantas CEO Takes Pay Increase of 872% as Lawsuits Loom
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SYDNEY, Sept 20 (ANBLE) – Qantas Airways, Australia’s leading airline company, has revealed that its former CEO, Alan Joyce, received a staggering 872% pay increase as he collected years’ worth of long-term incentives upon his departure. However, the company has decided to reduce and withhold substantial bonuses due to ongoing lawsuits that could result in heavy fines and further damage to its reputation. This announcement comes in the wake of a regulator lawsuit accusing Qantas of selling tickets for thousands of already-cancelled flights.
Joyce, who retired early this month, received a massive AUD 21.4 million during the 2023 financial year, as stated in Qantas’ annual report published on Wednesday. The majority of this amount comprised share-based incentives that Joyce was allowed to cash in after they vested. In comparison, his total pay for the previous year was a modest AUD 2.3 million.
Recognizing the customer and brand impact caused by a series of disruptive events, Qantas has taken the step of reducing Joyce’s short-term incentives by one-fifth of the AUD 2.7 million available. This portion of his bonus has been withheld pending the outcome of the ongoing lawsuits. Chairman Richard Goyder acknowledged this decision in the annual report by stating, “In recognition of the customer and brand impact of cumulative events, the Board has applied its discretion to reduce short-term incentives” for Joyce and other executives.
Furthermore, the report reveals that Qantas has been able to recall AUD 8.4 million of the share-based bonuses that Joyce received during the year but is not yet allowed to sell. The company also has the option to “claw back” unvested stock bonuses currently valued at AUD 6 million.
Joyce’s final pay package encapsulates his fifteen-year tenure as the head of Qantas, which dominates the Australian air travel industry. While the company achieved a record annual profit for the year ending in June 2023, it faced public outrage due to numerous flight cancellations and employee dissatisfaction resulting from the dismissal of 1,700 ground staff during COVID-related border closures.
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In addition to these challenges, Qantas now faces a lawsuit filed by the Australian Competition and Consumer Commission, alleging the company violated consumer law by selling fares for 8,000 flights that were already cancelled soon after the border reopened in mid-2022. Qantas has revealed that it is currently considering its response to the lawsuit.
Adding to the company’s woes, the High Court recently ruled the 2020 staff dismissals as illegal. As a result, Qantas must return to the Federal Court to determine the penalties and compensation it is required to pay to affected employees.
Goyder, in his report, acknowledged Joyce’s actions in addressing the challenges faced by the airline, stating, “Alan … openly recognized that there were elements of the COVID restart that could have been managed better and took action to start turning that around.”
The overall situation highlights the complex nature of running a major airline, as even profitability and record-breaking achievements can be marred by turbulence and legal battles. Nevertheless, Qantas continues to navigate these challenges and endeavor to maintain its dominant position in the Australian aviation market.
($1 = 1.5504 Australian dollars)
(This story has been refiled to remove an extraneous letter in paragraph 7)
