Shareholder money tossed like confetti in Qantas board’s remuneration fiesta

Qantas chairman Richard Goyder has tried to ameliorate the growing clamour for his now-inevitable resignation with a string of apologies in the company’s annual report, released yesterday, and the possible withholding of $14.4 million in bonuses to departed chief Alan Joyce and other executives.

The report has been delayed about two weeks as it was hastily tweaked to include said mea culpas. This was needed after revelations that the Australian Competition and Consumer Commission (ACCC) is eyeing $600 million in fines for the airline for allegedly selling tickets for “ghost” flights it had already cancelled in 2022 — as well as the body blow of the High Court backing the Federal Court’s finding (twice) that Qantas had illegally sacked 1,700 workers.

Like an opera diva hurling himself off the balcony to give his audience (superannuation funds) the ending he thought they wanted — and such dramatics have worked in the amateur theatrics circles of corporate Australia — Goyder is all show. After all, who can forget the minimalist bloodletting after the banking royal commission — sure, there were scalps to go round, but regulation-wise change was minimal — before returning to the business of rogering customers and closing branches?

“As we move through our recovery, management and the board are acutely aware of the need to rebuild your confidence in Qantas,” Goyder told shareholders. “We’re also conscious of the loss of trust that has occurred because our service has often fallen short of expectations, compounded by a number of other issues relating to the pandemic period.”

Those are the words. Here are the actions: Goyder’s annual pay in cash and kind from the cashed-up Red Rat is now a cool $750,000 — that’s up 14% from the previous year. This is for the part-time job at Qantas he juggles with other major, time-consuming roles heading the Australian Football League, fossil-fuel giant Woodside, the West Australian Symphony Orchestra and the Channel 7 Telethon Trust.

Indeed, the Qantas board collectively banked a pay rise of 8.3%. But this was distorted by departing director Michael L’Estrange getting a rise of less than 1%. If you take out him and Doug Parker, appointed in May, the remaining six long-serving directors averaged a 20% pay rise, with Maxine Brenner the biggest winner with a jump of 70% from $280,000 to $404,000.

Brenner is also a member of the Qantas board’s remuneration committee, along with Jacqueline Hey (chair), Todd Sampson and L’Estrange.

But hang on, maybe directors were just catching up on a COVID-era pay freeze like the one they enforced on staff? Well, no. Last year they handed themselves a 5% pay rise.

There’s a neat trick here. Shareholders occasionally vote for a total “cap” for directors pay — it currently totals $3 million — but in 2019 the board decided to cut back from 11 to eight directors, meaning there has been plenty more scope for it to feather its nests, without troubling shareholders to raise the total. Now sitting at $2.7 million, there is still scope for a decent bump next year. 

Yes, the Qantas board has decided to throw a remuneration fiesta, tossing customer revenue and shareholder funds around like confetti. For now, Joyce may be having $10 million or so in bonuses withheld, but he will still likely sail off with a stonking pay packet of $21.4 million, even if we slip into another part of the multiverse where all his bonus is withheld.

Reading Goyder’s message to shareholders, it’s hard to see that it has even sunk in that the company acted illegally in sacking workers — there’s just some vague “regret” about ruining countless lives. He even has the hide to say the High Court “endorsed” Qantas’ strategy.

The directors have also been taking care of the other senior executives, bringing them along for the remuneration celebrations. The report outlines chief executive Vanessa Hudson’s pay deal, including her defined benefit superannuation, with her having started with Qantas in 1994 when it was still government-owned. And with her pay review ahead, less than a year into her official tenure, her deal looks even sweeter.

Departing Qantas international and domestic chief Andrew David’s pay jumped 70% — remember he is the designated fall guy for the illegal outsourcing. And loyalty chief Olivia Wirth’s pay soared by 66.6%, despite her group underperforming compared with the rest of the company — remember, too, she was the beaten candidate for the top job. Wirth jetted off to Singapore in first class at the weekend, insiders told Crikey.

Qantas staff, however, have not been invited to the remuneration rave, left sitting home watching Netflix, their pay raised 1.2% on average over six years — including the two-year pay freeze. But they are sure to be cheered by the company’s decision to appoint a chief staff officer (who will undoubtedly be invited to next year’s pay party). This person, Goyder said, will “help increase the focus on what is our most important asset”. Pilots in regional subsidiaries readying to strike will doubtless be changing strategy upon hearing this.

Meanwhile, back at the airline’s actual operations, the signs that Joyce’s timing in stepping away was finely balanced between reaping as much reward as possible and exiting just as major capital spending was needed to both buy new planes and reboot ageing operations is becoming increasingly apparent.

Yesterday the Federal Court ordered the airline and the Transport Workers’ Union to attend a month of mediation with its former chief justice James Allsop. The largest compensation orders issued under the Fair Work Act’s adverse action laws could be its largest ever — in the region of $200 million.

“We have incredibly passionate people working for us and we’re continuing to invest heavily in skills development for pilots, cabin crew and engineers,” Goyder concluded.

Pilots, cabin crew and engineers who spoke to Crikey said Goyder must, somehow, be running a different company.