‘It’s clear that we let Australians down’: Alan Joyce loses millions in Qantas bonuses
Former Qantas CEO Alan Joyce will have his final pay pocket docked by a cool $9.26 million after the airline agreed to implement all 32 recommendations from its review.
The Qantas review commenced last October, and “scrutinised the decision-making and governance processes of the Board that led to the loss of trust amongst stakeholders”.
The review “involved external and internal input on several separate key governance matters identified by the Board,” who appointed Tom Saar to steer the review, which “found that mistakes were made by the Board and management which contributed to the Group’s significant reputational and customer service issues. There were no findings of deliberate wrongdoing”.
Saar said of his findings: “While some of the recommendations will take some time to embed across the organisation, if the current momentum is maintained, my expectation is that tangible benefits will occur within a short period.”
An update to the ASX on Thursday morning reads: “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.
“As part of a settlement with the ACCC, Qantas has admitted to misleading customers in relation to flight cancellation processes and subject to Federal Court approval will pay a $100 million penalty. Qantas has also agreed to a $20 million customer remediation program. Penalties and compensation arising from breaches of the Fair Work Act are still to be determined.”
The Board has determined that former CEO Alan Joyce will have his FY23 remuneration reduced by $9.26 million, with 100% of his 2021-2023 Long Term Incentive Plan, valued at $8.36 million, to be forfeited, plus a 33% reduction in his short term incentive in FY23 valued at approximately $900,000.
“In reaching these decisions, the Board has considered the individual and collective accountability of members of the Group Management Committee,” the ASX update reads.
“The Board has also taken into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline through that period. The combination of these factors is reflected in the reduction in the short term incentives.
“Mr Joyce was the Chief Executive Officer of the Qantas Group. In this role he had overall accountability and responsibility for the outcomes of the business and this is reflected in the forfeiting of his 2021-2023 LTIP shares that vested in August 2023.”
Qantas Chairman Richard Goyder has also announced his last day with Qantas as Chairman and Non-Executive Director will be Monday, 16 September, 2024. Current Chairman Elect John Mullen, will then assume the role of Chairman, with his role on the Board be put to a shareholder vote at the AGM.
“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.
“As the national carrier it is our duty to make sure we always act in the best interest of stakeholders and hold ourselves to the highest level of accountability.
“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. I’d like to thank Tom Saar for his work on the review.
“On behalf of the Board, I’d like to recognise the contribution that Richard has made during almost six years as Chairman of the Qantas Board, particularly guiding the airline through the unprecedented challenges faced during the pandemic.”
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Nathan Jolly is the Features Editor at Mumbrella. He joined the team in July, 2023.
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Will someone please explain to me why both of the Qantas Board and former QANTAS CEO Alan Joyce have not been charged with Insider Trading in accordance with The Corporations Act.
In the full (but yet to be announced) knowledge of the dramatic downturn in QANTAS’ financial performance, the Board acquiesced in Joyce request that he be authorised to privately sell a very significant tranche ($17 million!) of QANTAS shares which resided in him via his Employment Contract .
Both the Board and Joyce were in possession of privileged information that they knew – or should reasonably have known, would have generated a very significant decline in the QANTAS share price once released to the market.
Despite this, and despite the earlier (but only weeks before) announcement pumping up QANTAS’ financial and management performance, the Board allowed to requested share sale to proceed.
And, as a consequence, the QANTAS share price tanked and “mum and dad” shareholders were badly burned.
But Joyce, in the full knowledge of the real – but yet to be released – financial performance information, sold his shareholding at the top of its price journey.
Dodgy as!
And, when are we to expect legal papers to be served?
Hmmmm…… probably never!
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