Rich rewards on the way for top Virgin Australia execs following return to ASX

The three Virgin Australia executives who guided the airline’s IPO stand to be richly rewarded for their work, the prospectus has revealed.

Virgin Australia’s top executives including CEO Dave Emerson are in line for eye-watering bonuses and one-off payments when the company relists on the ASX later this month.

The prospectus outlining Virgin’s financial position, lodged with the Australian Securities and Investments Commission on Friday, details the rich rewards for executives under a new incentive scheme if they can successfully get the offer away.

The prospectus also details the generous travel benefits for executives and directors, including two return international business class tickets within the Virgin network for each immediate family number and six return domestic business class tickets.

As well as his $1.3m fixed remuneration, Mr Emerson stands to receive a one-off transaction bonus of $1.35m, more than $7m in short and long term incentives — including a $3m one-time equity grant — plus $4.13m in conditional and deferred transaction bonuses.

In total, Mr Emerson should pocket $13.9m, making him one of Australia’s better paid CEOs.

Chief financial officer Race Strauss and Velocity chief executive Nick Rohrlach will also collect the $1.35m one-off transaction bonus, and various other payments on top of their fixed salaries of $954,208 and $789,476, respectively.

Mr Strauss and Mr Rohrlach also stand to pocket seven figure bonuses under the short term incentive scheme, with a total value of $61m, and a long term incentive scheme worth $4.4m.

While executives count their millions, employees will each receive $3000 worth of share rights, amounting to just over 1000 shares on the $2.90 listing price.

Virgin Australia Velocity CEO Nick Rohrlach. Picture: Dallas Kilponen

However, the share rights will not vest for two years, and will be forfeited if the employee leaves Virgin Australia before that time.

Velocity Beyond membership is also offered for executives, directors and their partner, and an annual health assessment worth up to $2000.

After leaving Virgin, the CEO and chair remain entitled to their full travel benefits for a period equal to their length of service, unless they go to work for a rival airline.

Other items of note in the prospectus include the revelation Virgin Australia has paid $80.6m to Bain Capital for “advisory services” since the US private equity firm bought the airline from administration in 2020.

On completion of the IPO, Virgin will have to fork out a further $15m as a termination payment, ending the advisory services agreement.

In the current financial year, Virgin Australia is expecting to achieve a net profit of $331m, up from $259m, on the back of 8 per cent growth in passenger revenue.

The Velocity frequent flyer program is also holding its own, with revenue up 12 per cent to $457m, delivering underlying earnings of $130m.

Virgin Australia will return to the ASX on June 24, ending a five year hiatus. Picture: Brendon Thorne/Bloomberg

Looking ahead to the 2026 financial year, Virgin Australia expects demand for air travel to keep growing with the airline set to add 12 Boeing 737-8s and four Embraer E2s to its fleet.

As previously flagged, Virgin Australia named former Macquarie Group chair Peter Warne to lead its board, with Mr Emerson also accepting a director’s seat along with experienced company director Melissa Conrad.

Mr Warne said the decision to transition the business to a publicly listed company would provide an opportunity for “new investors to share in the success of Virgin Australia”.

“I commend all those involved in orchestrating Virgin Australia’s remarkable turnaround and setting the business up for long-term success,” he said.

Mr Emerson said Virgin was a “simple, focused business with a transformed operational and commercial model”.

“We have a clear strategy and an incredible team of people who deliver wonderful flying experiences to our customers every day,” Mr Emerson said.

On the subject of dividends, the prospectus said Virgin Australia may not be able to, or choose not to, pay dividends in the future, with numerous capital factors taken into consideration by the board.

Virgin Australia’s float will raise $685m. No.2 shareholder Qatar Airways and airline staff will sustain their present stakes of 23.4 per cent and 6.4 per cent respectively; Bain Capital will go to 40 per cent from 70.2 per cent ownership. Investors buying into the IPO will represent 30.2 per cent of the listed company register.

Investors have fully committed to the IPO. Meanwhile, market enthusiasm has delivered a bump to the Qantas share price of 3.5 per cent to $10.76 on Friday.

Originally published as Rich rewards on the way for top Virgin Australia execs following return to ASX