Qantas counting on record share price and new chairman to win over shareholders at AGM
The airline is hopeful a record share price and new chairman will ensure a less fiery AGM than last year’s disastrous affair.
Qantas is hoping a 53 per cent lift in its share price and the refreshed board and management team will ensure a less eventful AGM on Friday, after last year’s disastrous meeting.
The ballroom of the Crowne Plaza Hotel in Hobart has been booked for the meeting but it remains to be seen how many shareholders will front up.
Last year only 66 made the effort to attend in Melbourne but the poor showing did not spare the board of directors a grilling over executive pay and performance.
In a lowpoint of the meeting, chair Richard Goyder ordered a shareholder’s microphone be turned off because he objected to the line of questioning.
This year questions are expected to focus on the board commitments of new chair John Mullen, the lack of a dividend, ongoing bonuses for former CEO Alan Joyce and his travel entitlements, and the reputational repair process being undertaken.
Two proxy advisory firms have raised concerns about Mr Mullen’s election, due to the fact he is also chair of the ASX-listed Brambles and Treasury Wine Estates and a director of Brookfield Infrastructure Corporation.
Institutional Shareholder Services said his experience in transport, logistics and infrastructure would benefit the Qantas board, but it was recommending a “no” vote due to “overboarding”. The Australian Shareholders Association left it to members to decide whether to support Mr Mullen’s election, voicing similar reservations to ISS.
With respect to the remuneration report, only ISS was in favour of a “second strike” after a resounding 82.9 per cent of the vote opposed the executive pay and bonus structure last year.
Glass Lewis, Ownership Matters, the ASA and Australian Council of Superannuation Investors were all satisfied with the changes made to the way in which bonuses were assessed, and the action taken by the board to punish Mr Joyce and executives for Qantas’s reputational damage.
However, only 25 per cent of the votes need to reject the remuneration report a second time for another strike to occur, triggering a “spill resolution” to be put to the meeting.
In the event that was supported – which no proxy advisers have recommended – the entire board would have to stand for re-election at a subsequent meeting. It is understood Qantas believed it had done enough to stave off a second strike, delivering a much more detailed remuneration report, and adding greater weight to customer outcomes and reputation.
The prospect of a dividend at the time of Qantas’s half-year results in February was also expected to please shareholders, along with the record share price – closing at $7.91 on Thursday.
CEO Vanessa Hudson was set to highlight a range of other achievements in her opening remarks to the AGM, her second in the top job. At last year’s AGM Ms Hudson had only been in the role for a matter of weeks before she faced angry shareholders.
Since then Qantas has lifted spending on customer initiatives by $230m, launched a new frequent flyer product in Classic Plus rewards, reached a $120m settlement with the Australian Competition and Consumer Commission and struck a new long-haul cabin crew agreement.
On Friday Qantas will deliver a further sweetener for its 16 million frequent flyers, with the extension of Classic Plus rewards to domestic flights. Designed to give frequent flyers more opportunity to use their points, millions of seats will be available as Classic Plus rewards, requiring a minimum of 5600 points for Sydney-Gold Coast, or 6700 points for Sydney-Byron Bay in an opening “sale”.
Qantas is also rolling out a “double status credit points” promotion for people booking an international, domestic or regional flight between Friday and midnight on October 31.
Ms Hudson said adding Classic Plus to domestic flights would give frequent flyers more options to fly where they wanted, when they wanted. “This investment is driving greater member engagement with the program and our partners which is key to the growth and success of Qantas Loyalty.”
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