Former Qantas CEO Alan Joyce, who retired two months early in a bid to save the airline’s scandal-hit reputation, has been awarded a bumper AUD $21.4 million annual pay award despite the airline admitting on Wednesday that it is “experiencing an acute loss of trust from the community and accumulated disappointment from customers”.
Joyce, 57, originally intended to retire in November but unceremoniously brought his departure forward to September 5 after Australian competition regulators launched a massive legal case against the airline, accusing it of selling tickets for thousands of flights that had already been cancelled.
The disgraced former CEO was already under mounting pressure over Qantas’ post-pandemic operational performance, which had included almost routine delays and cancellations, lost luggage and questions about the way it treated staff during the pandemic.
Last week, Qantas lost a High Court appeal that concluded the airline illegally fired a group of ground workers in order to outsource their jobs to cheaper labour. The workers won’t be able to get their jobs back, but Qantas is expecting a huge bill in compensation.
Joyce has also faced questions about the role he played in blocking a request from Qatar Airways to launch additional flights to Australia from its Doha hub, as well as the airline’s role in lobbying Australian lawmakers on a number of other issues.
But despite the controversy, Joyce is expected to earn as much as $21.4 million, including $2.14 million in base pay in 2022/2023 and millions more in long-term incentive plan bonuses.
A further $2.2 million in short-term bonuses, however, is currently being withheld, and the airline says it could ‘clawback’ a further $8.3 million if the board of directors deems it necessary.
The short-term incentive plan bonus is made up of a number of internal metrics, such as safety and emissions, as well as customer satisfaction. Up to 20% of the bonus could be awarded for achieving good customer satisfaction levels, but the board decided to assess a zero outcome in the customer component of the bonus because the airline performed so badly last year.
The board was previously going to award a 2 out of 20 for customer satisfaction before the Australian Competition and Consumer Commission launched its probe into Qantas’ ticket-selling practices. A further 20% reduction has been ordered on short-term bonuses.
New chief executive Vanessa Hudson now faces the huge challenge of turning around Qantas’ scandal-hit reputation, although there are now calls for more heads to roll, including chairman Richard Goyder.
