By Amelia McGuire and Angus Thompson
Former Qantas chief executive Alan Joyce’s final pay packet has been docked by $500,000 to $21.4 million as the board awaits more information on alleged consumer law breaches before deciding whether to claw back more of his pay.
The airline’s annual report, published on Wednesday, also revealed it was delaying the payment of a further $2.2 million in bonuses to Joyce after a horror month for the airline, culminating with his early departure and a consumer watchdog lawsuit alleging Qantas sold tickets for already cancelled flights in 2022.
Qantas has withheld up to $14.4 million in short-term bonuses for former boss Alan Joyce.Credit: Dion Georgopoulos
Joyce may walk away with significantly less than the $21.4 million if the board chooses to claw back a further $8.3 million in bonuses and revoke his short-term $2.2 million payment. If not, he could receive up to $23.6 million for the 2023 financial year.
Since Joyce announced he was leaving the airline earlier this month, following weeks of damning publicity, the board has faced intense pressure from investors to claw back some of the former CEO’s multimillion-dollar bonuses.
The board moved to reduce the short-term bonuses of executives by 20 per cent for 2023 and has withheld additional long-term incentives until after more detail is provided about the Australian Competition and Consumer Commission (ACCC) allegations.
Chairman Richard Goyder said he recognised customers had lost trust in the company.
“Much of the loss of trust stems from allegations by the ACCC. We recognise the important role of the ACCC and the company has co-operated 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 said.
The group has become embroiled in a series of scandals, which culminated in Joyce’s early exit, since it unveiled a record $2.47 billion underlying profit in August.
“There are already clawback provisions on significant amounts of remuneration awarded but not yet released that would be used if significant misconduct was ultimately found,” Goyder said. He added the business would give customer outcomes more importance when deciding future executive remuneration.
The annual report also showed Qantas’ new chief executive Vanessa Hudson – who until this month was the group’s chief financial officer – received $5.1 million for the 2023 financial year. Goyder was paid $750,000 for the 2023 financial year, up from $658,000 the year prior.
Meanwhile, Hudson was on Wednesday ordered by the Federal Court to clinch a deal with Transport Workers Union leader Michael Kaine in person over compensation for the airline’s sacked 1700 workers.
Qantas last week lost its final appeal against Federal Court judge Michael Lee’s 2021 finding that the national carrier had illegally outsourced the jobs of ground crew during the pandemic, partly to avoid industrial action.
Lawyers for Qantas and the TWU were back before Lee on Wednesday morning, a week after the High Court unanimously dismissed the airline’s last-ditch bid to overturn his judgment, preparing to hatch out compensation and significant penalties for the former staff.
“There’s [1700] people whose lives have been affected, together with their families, and I wish to ensure that this matter is resolved as soon as I can,” Lee told the parties.
One of the biggest concerns raised by shareholders since Joyce’s departure has been why he was given approval in June to sell about $17 million in Qantas shares – more than 80 per cent of his holding in the airline at the time – and what he and the Qantas board knew of the ACCC investigation at that time.
Qantas disclosed to the sharemarket two weeks ago that Joyce was issued 1.7 million shares, worth more than $10 million, for hitting key financial targets as part of his bonuses from 2020, 2021 and 2022 as well as a separate incentive scheme the airline business devised during COVID-19.
In 2022, Joyce was paid $5.5 million on a statutory basis, including $2.2 million in cash pay and $3.3 million in bonus shares that vested this year.
He’s estimated to have made more than $120 million in total realised pay over his 15 years at the helm.
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