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1 November, 2022

Multimillion dollar bonuses for Qantas execs criticised ahead of AGM

Ahead of Qantas’ annual general meeting (AGM), shareholders have been advised to reject a scheme that will see multimillion-dollar bonuses for CEO Alan Joyce and other senior executives to retain their services.

An Australia proxy adviser, ISS, has accused Qantas of setting insufficiently challenging performance targets and criticised the airline’s plans to repudiate votes by investors against the resolution.

“Shareholders are being given a false choice because the company intends to make a cash equivalent payment rather than an equity award if shareholder approval is not obtained,” the ISS report said.

Joyce set three performance hurdles for himself to receive 698,000 performance rights on shares worth more than $4 million, which ISS took issue with. One of these profits includes Qantas reporting a profit this financial year.

These hurdles are all on track to be met as travel kicks off.

Qantas’ shares rose last month after the airline forecasted a $1.2-1.3 billion profit for the first half of FY23 – despite high inflation and soaring jet fuel prices impacting consumer spending.

Joyce dismissed the idea that Qantas’ good reporting could worsen tensions between employees and travellers who have struggled with lacklustre service and working conditions, saying the challenges were widespread across the industry.

“What’s become clear is delivering pre-COVID levels of performance requires more than pre-COVID levels of resources,” Joyce said at the time.

Other proxy advisers don’t seem concerned about the bonuses and have supported the resolution and renumeration report.

“ISS is the only proxy adviser to recommend votes against any of the resolutions. All of the other major shareholder advisers – CGI Glass Lewis, Ownership Matters, ACSI and the ASA – are supporting the remuneration report and incentives,” a Qantas spokesman said.

“Our executives weren’t paid annual bonuses in [financial year] 2022, for the third consecutive year, and their contracted base pay remained frozen. Overall their pay was 64 per cent below what it was pre-COVID in [financial year 2019].”

Joyce has not received a pay rise since 2018, according to the spokesman, and is the only CEO in the ASX 100 to have not received an annual bonus in the past three years.

Featured Image: Alan Joyce (ABC)

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ACSI alan joyce Annual Bonus ASA CGI Glass Lewis Executive bonuses ISS Ownership Matters qantas