Qantas dips as CEO Joyce sells off part of his stake

Qantas shares slipped 5c to close at $3.95 yesterday after CEO Alan Joyce revealed he had sold almost 2.5 million shares.

Qantas CEO Alan Joyce has sold almost 2.5 million shares in the airline. Picture: Bloomberg

Qantas share slipped 5c in a weaker market to close at $3.95 yesterday after chief executive Alan Joyce revealed he had sold almost 2.5 million shares in the airline, worth almost $9.7 million.

Mr Joyce sold the 2,473,519 shares for $3.90 a share but he also flagged he may acquire a further 947,000 shares under the airline’s 2016-18 long-term incentive plan. The LTIP rights, approved by shareholders at the recent annual meeting in Perth, will vest if Mr Joyce meets certain performance hurdles over the next three years.

It is understood a prime reason for Mr Joyce’s decision to sell the shares, many of which he received in this year’s $12m remuneration package, was to pay a tax bill believed to be about $5m.

The move leaves still the Qantas boss with plenty of skin in game with just under 3.2 million shares.

Mr Joyce’s remuneration soared last financial year in the wake of the airline’s $1.5bn turnaround and its underlying pre-tax profit of $975m.

Mr Joyce had previously earned just over $2m, after taking a 40 per cent pay cut, but last year received $7.3m when his $2m in base pay, a $1.9m cash bonus, short and long-term incentive payments and $112,000 in other benefits were added up.

Another $4.56m came from the growth in the airline’s share price since share rights were awarded three years go. Qantas shares at that point were worth about $1 but Mr Joyce’s shares vested at $3.50, adding $4.5m in extra value.

The outlook for Qantas appears positive with analysts predicting an increased profit this financial year. The airline is currently returning $505m to shareholders through a capital management program.

Many analysts say the airline’s share price will break the $4 barrier, ending up in the $4.30 to $4.80 price range. The airline was upbeat about its prospects at the annual meeting, pointing to a lower than expected fuel bill and another $450m in transformation benefits.

However, Franklin Resources, which owns long-time Qantas supporter Balanced Equity Management, on Thursday reduced its stake by more than 32.5 million shares to cut its stake from 6.62 per cent to 5.14 per cent. Some commentators wondered whether Qantas was losing its support.