No pay till July for Jayne Hrdlicka as Virgin boss shares the ‘pain’ with employees

Virgin Australia’s CEO tells staff she won’t be paid until 2021, in the hope they will vote in favour of new work agreements.

Virgin Australia CEO Jayne Hrdlicka has told employees she’s not taking a salary until June 2021. Picture: Britta Campion

Virgin Australia CEO Jayne Hrdlicka has told employees she will not be paid until July, in an email encouraging them to vote in favour of new work agreements reducing their pay and conditions.

Voting on the enterprise agreements opened Friday morning and will close at 1pm on Tuesday.

In an email seen by The Australian, Ms Hrdlicka urged workers to support the EAs, pointing out that “sacrifices were being made in every area of our business” to contribute to its long term success.

“To recognise these sacrifices we are asking all of you to make, I will not take a salary as your CEO until June of 2021,” Ms Hrdlicka wrote.

“And when my annual remuneration begins in July of 2021, it will be below market.”

She said it was important to understand that Virgin Australia was in financial trouble even before the COVID-19 pandemic began, with costs outstripping revenue.

“Even our Boeing 737 operation was not covering its cost of capital,” said Ms Hrdlicka.

“It was this business’s priority before COVID to reduce our cost base and that continues to be our top priority now. Every single stakeholder right across the group is joining together to ensure that Virgin Australia doesn’t just survive, but it thrives, grows and ensures our stood down colleagues can come back to work.”

Ms Hrdlicka pointed out that former shareholders walked away with nothing as a result of the administration, and suppliers took “very significant reductions to their contract rates”.

“Our corporate and head office teams are also going through significant change with many job losses already announced and wage and incentive payments frozen,” she said.

“Once we complete the restructuring further wage freezes will also be in place for our corporate and head office teams for the same duration as they are in place for our frontline teams.”

She noted that the Virgin Australia Regional Airline flight and cabin crews had already voted in favour of new EAs, with more than 85 per cent voting yes.

Other employees are believed to be concerned about the changes to pay and conditions being asked of them, agreed to by unions.

Ms Hrdlicka’s email addressed the question of what would happen if workers voted down the agreements on offer, implying that they would not have a future at Virgin Australia.

“There will be no increase to the cost envelope that is implied in each of the agreements,” she said.

“We cannot afford more than is on the table and no matter what has happened previously in past negotiation periods, there will not be a better offer coming.”

The former Jetstar boss is among a number of company executives to halt or drastically reduce their salary during the COVID crisis.

Ms Hrdlicka’s mentor and Qantas Group CEO Alan Joyce went for four months with no pay from April to July, and is now paid 65 per cent of his $2.2m annual base salary.

Medicare boss Craig Drummond, Mirvac chief executive Susan Lloyd-Hurwitz and NAB chief Ross McEwan also took pay cuts.

Ms Hrdlicka indicated it was likely to be some time before Virgin Australia was in a strong financial position, with travel behaviours changing and fares likely to be “structurally lower for some time” as demand for flying was rebuilt.

“Thank you for taking the time to make a considered decision as you vote over the next few days. We are all in this together,” she wrote.