Qantas AGM shaping up to be less fiery affair after support from influential proxy advisory firm

The Qantas board looks set to avoid a humiliating spill motion after an influential proxy adviser recommended shareholders vote yes to the national carrier’s remuneration report.

The Qantas board looks set to be spared a humiliating spill motion at the airline’s upcoming AGM, after an influential proxy advisory firm recommended shareholders vote in favour of the executive remuneration report.

Last year the remuneration report was voted down by a resounding 82.9 per cent of shareholders, angered by large salaries and bonuses for executives who oversaw the trashing of the Qantas brand.

The result prompted a review of corporate governance at Qantas, and led to the decision to deny former CEO Alan Joyce $9.26m in bonuses, and slash other executives’ short term bonuses by a third.

Other decisions taken as a result of the review by business adviser Tom Saar, included tightened protocols around the sale of shares by the CEO or group leadership team.

It followed the confounding approval by former chairman Richard Goyder of Mr Joyce’s $17m share sell-off in June 2023, when Qantas was being investigated by the consumer watchdog for the sale of tickets on already cancelled flights.

Whether those measures are enough to avoid a second consecutive rejection of the remuneration report, prompting a “spill resolution” to be put to the AGM, will be determined by shareholders on October 25.

Only 25 per cent or more need to vote no to the remuneration report for the spill resolution to be put, potentially forcing all board members to stand for re-election.

In its recommendations to shareholders ahead of this year’s AGM, influential proxy advisory firm Glass Lewis said they “recognised the board’s efforts to address shareholder concerns”.

“The company has made several adjustments to its remuneration framework, both during the past year and moving forward. We consider these adjustments positive,” said the advice, which goes to about a third of Qantas shareholders.

“Additionally, the company has enhanced transparency and disclosure within the remuneration report, providing detailed information on the short term incentive plan (STIP) group scorecard performance measures, targets and outcomes.”

Last year’s Qantas AGM, at which chair Richard Goyder ordered a shareholder’s microphone be turned off during questions about Alan Joyce’s share sale. Picture: Luis Ascui

Despite concerns the decisions pertaining to Mr Joyce “did not appear to be as punitive as they could have been”, Glass Lewis said they were “prepared to move forward” given the board changes, including the appointment of new chair John Mullen.

“Overall we recommend that shareholders support the company’s remuneration report,” said the advisory.

All other motions to be put to the AGM were also supported by CGI Glass Lewis, including an equity grant for CEO Vanessa Hudson worth $2.6m, the election of Mr Mullen and director Nora Scheinkestel, and the re-election of Tony Tyler.

It was noted four directors had departed the Qantas board since the fiery 2023 AGM, including Richard Goyder, Jacqueline Hey, Maxine Brenner and Michael L’Estrange.

“In light of these substantial board changes, we are now comfortable with the board’s response to the issues facing Qantas,” said CGI Glass Lewis.

“We note that Qantas’ share price has largely recovered since the event, reflecting a 46 per cent appreciation from $4.76 a share at the close of business on 27 October 2023 (the lowest point in 2023) to $6.98 a share as of the time of writing.”

On Monday, Qantas shares closed up 0.7 per cent, or 5c, at $7.05.

Other proxy advisory firms were expected to deliver their recommendations for the Qantas AGM in coming days.

Last year, five major proxy advisers including Glass Lewis recommended shareholders reject the remuneration report, resulting in the overwhelming “no” vote.

Several firms also advised against supporting the re-election of long-serving director Todd Sampson, but he scraped through after 66 per cent of shareholders voted yes.

At the time the advertising guru told shareholders “of all the times in Qantas’ history especially with a new CEO, this is when my experience will be most valuable”.

Mr Joyce has maintained a low profile since leaving Qantas on September 5, 2023, focusing on family and home renovations.

At the same time, Ms Hudson has worked to restore trust in the airline through increased spending on customer initiatives, a better on-time performance and a new rewards platform within the frequent flyer program.

Delivering Qantas’ annual results in August, a $2.08bn underlying before tax profit, Ms Hudson said their reputation score had increased by 16 points in just over a year, from 51 to 67 out of 100.

The airline’s highest ever reputation score was 80, she said.

Originally published as Qantas AGM shaping up to be less fiery affair after support from influential proxy advisory firm