Qantas investors demand accountability

Australian Council of Superannuation Investors said they were yet to see clear accountability from the Qantas board and management.

Qantas chairman Richard Goyder with now former CEO Alan Joyce. Picture: NCA Newswire/Gaye Gerard

Shareholders in Qantas have called for “accountability” from the board with concerns remaining over the handling of Alan Joyce’s pay and a string of reputational hits after it allegedly wrongly sold tickets on already cancelled flights.

The Australian Council of Superannuation Investors - which represents pension funds that control over 10 per cent of Qantas shares - said they were yet to see clear accountability from the Qantas board and management.

ACSI chief executive Louise Davidson said the annual report published on Wednesday was “interesting for what it did not say”.

“There is no discussion of board accountability for ongoing customer issues, the recent High Court decision and the ACCC investigation,” said Ms Davidson.

“That is what investors would like to understand.”

Ms Davidson said it was “a surprise” to read Alan Joyce was eligible for an annual bonus of over $2m, given the issues the company was facing “including poor customer outcomes”.

“The ACCC investigation might impact that bonus but the issues are broader than just that investigation,” she said.

“Significantly more detail is required about what happens if the ACCC finds against Qantas — how will the clawback (of Mr Joyce’s bonuses) be applied? What will the conditions be?”

Superannuation giant HESTA said the Qantas board “should consider all actions available to them” to restore public confidence and brand trust in the company they manage for shareholders.

“The option to pursue potential claw backs on the former CEO’s generous bonus is a welcome step, but many more need to be considered,” HESTA chief executive Debby Blakey said.

HESTA said it had met with Qantas as a part of its engagement program and emphasised the significance of Qantas achieving a balance between the interests of its customers, shareholders and stakeholders.

“We expect to see this understanding of customer, shareholder and stakeholder value reflected in the strategic plans of the company and the culture of the board and management,” Ms Blakey added.

“Ultimately the board is accountable for company performance and our votes at the annual general meeting will be influenced by whether the board can lay out a clear plan to improving Qantas’ governance and culture.”

Morningstar analyst Angus Hewitt said the potential clawback of a bonus was “immaterial from a valuation standpoint and probably did not move the dial from a brand standpoint”.

“What needs to happen is an improvement in customer outcomes,” said Mr Hewitt.

“Ticket prices are elevated, due to strong demand and supply constraints, but service has fallen well short of expectations — with regards to delays, cancellations, lost baggage and even simply the ease of redeeming flight credits.”

Qantas chair Richard Goyder on Thursday rejected any notion he should resign from the post, saying the board and shareholders want him to continue in the role.

Pressure for Mr Goyder to step aside has been increasing since it was revealed the consumer watchdog was taking legal action against Qantas for allegedly selling tickets on already cancelled flights.

Further questions were asked about the role of the chair and board when the High Court upheld previous court decisions that Qantas unlawfully outsourced the jobs of nearly 1700 workers.

As chair, Mr Goyder also oversaw the botched handling of Covid travel credits, exorbitant airfares and poor operational performance leading to the Qantas brand being damaged.

Mr Goyder said the role of the Qantas chair required the confidence of the board and shareholders.

“While I retain that confidence I’ll get to work and do the things we need to do to deal with some of the issues we’ve got at the moment,” he told ABC Radio.

“The latest read I’ve got on that is that people want me to continue to do the role and I think I’m well suited to it.”

Mr Goyder said he had met with most of the major shareholders in Qantas over recent weeks and he “would meet with them again”.

“The shareholders are very supportive of the work we’re doing now, of the new CEO and certainly of me,” he said.

“On the customer side, we know we’ve got some work to do, we know we’ve let people down.”

Former Qantas CEO Alan Joyce with his successor Vanessa Hudson and Qantas Chair Richard Goyder. Picture: NCA Newswire/Gaye Gerard

Australian Shareholders Association CEO Rachel Waterhouse questioned the fairness of withholding bonuses from all executives.

“The report suggests that executives who may not have been involved in the actions of focus for the ACCC proceedings or the illegal sacking of 1700 baggage handlers and cleaners had their short-term incentives removed for 2022-2023,” said Ms Waterhouse.

“This raises concerns about whether it is fair for an executive who was not involved in the decision to be impacted and could it lead to retention challenges in the executive group, especially when substantial organisational change is necessary.”

Ms Waterhouse also questioned how Qantas would go about clawing back $8.36m from Mr Joyce when it had already been approved by shareholders, and paid.

Qantas shares closed 2c lower at $5.31 on Thursday.

Mr Goyder was set to appear before a Senate Committee inquiry into bilateral air rights in Melbourne next Wednesday.

New CEO Vanessa Hudson and Mr Joyce were also expected to face the committee.