Qantas argues ‘restraint’ after CEO Alan Joyce pockets pay rise

Qantas senior executives have defended CEO Alan Joyce’s pay rise amid widespread customer service problems.

Qantas claims no other ASX-listed company has shown the same “restraint” in terms of executive remuneration after Alan Joyce pocketed an estimated 15 per cent pay rise.

The airline’s chief executive took home $2.17m in the last financial year and was paid a total of $5.5m, including more than $3m in bonus shares which can be sold if Qantas turns a profit by August 2023.

Two of the national carrier’s senior executives defended Mr Joyce’s pay packet amid widespread customer service problems which have damaged the airline’s reputation.

Qantas corporate affairs group executive Andrew McGinnes and general counsel Andrew Finch were put in the hot seat at a Senate inquiry on Wednesday.

Mr McGinnes told the hearing: “You will not find a company in Australia or certainly not one on the ASX that has exhibited the restraint that Qantas has.”

“CEO pay is down 80 per cent versus pre-Covid-19,” he said.

“The driver for CEO pay prior to Covid-19 was the huge appreciation in share prices due to the fact that the company was performing extremely well after it hadn’t been, not least because of the competitive pressures we face.”

Mr Joyce was the only incumbent chief executive officer at a top 100 ASX-listed company not to receive a bonus in the past two financial years, according to a report by the Australian Council of Superannuation Investors.

Qantas boss Alan Joyce was regularly the highest paid CEO in Australia before the pandemic. Picture: Brendon Thorne / Getty Images

He was regularly the highest-paid CEO in Australia before the pandemic and his raise last year is believed to be due to his base salary returning to its standard level.

Mr Joyce has overseen an aggressive cost-cutting strategy during his 14-year tenure at the helm of Qantas, which included axing thousands of employees during the pandemic.

Many of these employees were rehired or replaced through outsourcing to internal shell companies and external labour hire firms.

Among them were 1700 baggage handlers whose sacking was found to be unlawful and partially motivated by the fact many of Qantas’ own ground crew were union members with stronger bargaining capability.

The airline is attempting to challenge that finding in the High Court.

Mr McGinnes and Mr Finch insisted on Wednesday the strategy of outsourcing staff and hiring new workers on “modern” awards was necessary for the carrier’s “survival”.

They told the inquiry employing staff under “legacy” conditions would entail “completely uncompetitive” terms which would inflate airfares.

Mr Finch said Qantas’ use of external labour hire companies was simply a method of “managing resourcing requirements” and that casuals were paid more than permanent employees would be.

He said in “most instances” these employees enjoyed the flexibility offered by casual work.

“So it’s a lose-lose situation from our perspective,” he said.

Qantas has been beset by customer service problems which have damaged the airline’s reputation. Picture: NewsWire/Sarah Marshall

Mr McGinnes claimed “no one is trying to take” existing “grandfathered” pay and conditions away from longer-standing employees.

He said no Qantas employee had had their pay “practically cut”.

Asked about a recent spate of safety breaches at Swissport, which provides baggage handling services for Qantas, Mr McGinnes accused the Transport Workers’ Union of trying to create an “ah ha moment”.

“The reason that dossier exists is because it’s a company that is trying to improve safety, as everyone in aviation is trying to do,” he said.

“It’s disappointing that sometimes those efforts to talk candidly inside those companies … are taken out of context as ‘look at this terrible list of things’.”

The incidents at Swissport, revealed by NCA NewsWire, included guns being left on arrivals carousels, dangerous goods being taken onto planes undocumented, aircraft being damaged and staff working while injured.

Mr McGinnes and Mr Finch made their remarks at an inquiry into proposed legislation to amend the Fair Work Act.

The changes would require that labour hire workers covered by certain modern awards are offered the same or greater rates of pay than directly employed workers.

The Senate committee examining the Bill is due to provide a final report on October 24.