Former Qantas CEO Alan Joyce—who brought forward his planned November departure to September as legal scandals and public anger engulfed the airline—has had his total remuneration for 2023 cut by $9.3 million (US$6.1 million).
The decision by the company’s board comes in the wake of an internal review that found “considerable harm” had occurred under his leadership, which began in 2008.
Although he was officially due $21.4 million in total earnings for the 2022/23 year, the board announced in September that it had withheld $10.5 million. Today, it also announced that he will lose $8.36 million of Qantas shares (based on today’s price) and that his short-term incentive, valued at about $900,000, will be cut by 33 percent.
Despite the cuts and reductions, Joyce will still receive over $12 million for the 2023 financial year. During his 15 years with the airline, he earned a total salary package of $125 million.
Joyce stepped down when Qantas was facing multiple issues, including widespread customer anger over withheld credits, poor service, and high airfares.
In May this year, the airline agreed to pay over $20 million to around 86,000 customers who had sold tickets on flights that Qantas had already decided to cancel and another $100 million in penalties after the ACCC took the matter to the Federal Court.
It also lost its High Court battle over the illegal sacking of ground staff in 2020.
“While there were no findings of deliberate wrongdoing, the review found that mistakes were made by the board and management which contributed to [Qantas’] significant reputational and customer service issues,” they added.
Other current and former senior executives at the airline will also have their short-term bonuses reduced by 33 percent, bringing the total down by $4.1 million.
“In reaching these decisions, the board has considered the individual and collective accountability of members of the Group Management Committee,” the board said, adding that it had also “taken into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline through that period.”
The board itself faces considerable shareholder discontent. At its annual general meeting (AGM) last November, 80 percent of shareholders voted against the proposal to compensate its executives—one of Australian corporate history’s most significant protest votes.
If shareholders aren’t placated, some or all members of the board could lose their places at the next AGM.
Issues Will Be Addressed: Chairman
The 19-page governance report, by independent advisor Tom Saar, described Qantas under Joyce as having a “’command and control” leadership style with centralised decisions and an experienced and dominant CEO.
“Leadership culture is part of the root cause dynamic that has underpinned the events under review,” it said.
“This contributed to a top-down culture, which impacted empowerment and a willingness to challenge or ’speak up’ on issues or decisions of concern except in relation to safety matters.
“In turn, that cultural characteristic underpinned some of the events that affected [Qantas’] reputation.”
Outgoing Qantas chair Richard Goyder and chairman-elect John Mullen “have committed to implementing actions to address” the issues raised in the report, which presented 32 recommendations.
Mullen said in a statement that it was important “the board understands what went wrong and learns from the mistakes of the past. It’s clear that we let Australians down.”
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