Incoming Qantas chair to decide whether Alan Joyce becomes the $170m man

Qantas has hired a high-profile consultant to examine whether the former chief executive deserves to receive his $16m in bonuses.

Alan Joyce, left, could miss out on a $16m bonus in an early test for incoming chairman John Mullen, top right.

Former Qantas CEO Alan Joyce faces a challenge to claim a $16m windfall, with the airline hiring a high-profile consulting chief to question senior leaders on whether a series of bungles will void the payment of lucrative ­bonuses.

Former Boston Consulting Group strategy chief Colin Carter was asked by the Qantas board to provide independent advice on whether the payment, double previous estimates, must be made given the litany of failures that occurred during the final years of Mr Joyce’s reign.

Mr Carter has advised Australian prime ministers and Australian Airlines during his lengthy career, and the board’s decision shapes as one of newly named chairman John Mullen’s biggest early tests at the aviation giant.

Sources said Mr Joyce and members of his executive committee, plus select board members, were currently being interviewed.

The stakes are high both for Mr Mullen, who will want to start afresh from a chequered few years under its former boss, but also for the diminutive Irishman, whose legacy in recent times is best described as mixed.

The former CEO is fighting hard for his long-term bonuses of $13.97m plus a short-term bonus of $2.19m – figures that have been confirmed internally – which hinge on meeting specific financial performance measures, while a part payment could also be considered.

The potential windfall comes on top of the $21.4m pay cheque already cut for Mr Joyce for the year, taking his total tally at the airline to about $170m for 15 years as chief executive.

The combative former airline chief may not have failed any tests associated with receiving his board and shareholder-backed bonuses.

If Mr Carter and the external lawyers King, Wood and Mallesons determine he has not failed on any pre-agreed methodology, it will create a jarring reality for the Qantas staff and customers who felt badly let down from the latter years of his leadership.

During his 15-year reign at Qantas he shook up the power balance with its 14 unions in a combative manner, including the decision to deliberately ground all flights rather than bowing to the demands of a few militant groups. He also steered Qantas through border closures and lockdowns during the Covid pandemic, undoubtedly the toughest challenge to face aviation since the September 11, 2001 attacks in the US.

But the financial quicksteps that saw him lauded by markets were followed by the missteps. During the pandemic, he illegally fired 1700 baggage handlers and post the pandemic under his reign the airline sold tickets on so-called ghost flights that had already been cancelled. The airline would not refund tickets for flights grounded during the pandemic, and made travel credits near impossible to cash in.

Richard Goyder as chairman was fully supportive of Mr Joyce.

As passengers queued for hours to clear security when lockdowns ended, Mr Joyce declared they weren’t “travel fit”, and when the airline was struggling with record passenger baggage losses and 10-hour hold times on the phone, he ducked off to Europe for a ­holiday.

To top it all off, the board approved Mr Joyce selling $17m worth of shares when he and they knew (but the market didn’t) that the airline was being investigated over the ghost flights.

In the end, the former Qantas chief executive exited the airline several months earlier than ­planned.

Still, some observers thought that was several years later than many thought he should have, with the former boss enjoying the full backing of now-outgoing chairman Richard Goyder right up until the end.

In a statement, Qantas said it had withheld short-term incentives for senior executives for the 2023 financial year by 20 per cent and withheld payment pending further information in relation to the ACCC Federal Court action and the outsourcing of ground handling.

“An independent review into these matters and a broader review of governance was commissioned by the board,” it said.

“These will be considered in the coming months and any outcome in relation to executive remuneration will then be shared.”

What Mr Mullen could do in that situation remains to be seen. At the moment he is still the chairman-in-waiting and Mr Goyder has not disclosed when he will leave the board he has sat on for almost seven years and chaired for almost six.

Last week Mr Mullen came out against companies pushing their social licence agendas such as the Indigenous voice to parliament.

Qantas under the control of Mr Joyce and Mr Goyder was an outspoken advocate for issues such as same-sex marriage and more recently the voice, a topic that it backed with “yes” decals on some aircraft and a joint press conference with Anthony Albanese.

Qantas’s support for the voice came as it “won” the title of the competition watchdog’s most complained about company for the second year running, and as the airline suffered an 83 per cent vote against its remuneration ­report.

But since then, and under the new reign of Vanessa Hudson, Qantas is quietly working through many of its pain points. The airline has invested $230m on customer initiatives such as a new category of frequent-flyer reward seats and dramatic improvement in on-time reliability. In the past three months, its on-time arrivals (not departures) were in line with long-term average, coming in at 80 per cent in May, 79 per cent in April, and 78 per cent in March.

The airline has also resolved the ACCC case on ghost flights and is in talks with the TWU over fines and compensation for illegally firing its baggage handlers.

Originally published as Incoming Qantas chair to decide whether Alan Joyce becomes the $170m man