Powerful super funds take aim at Alan Joyce’s $24m golden handshake

The $3.4 trillion superannuation sector has taken aim at the embattled Qantas board, saying it needs to justify Alan Joyce’s $24m golden handshake as soon as possible.

The $3.4 trillion superannuation sector has taken aim at the embattled Qantas board saying it needs to justify former chief executive Alan Joyce’s $24m golden handshake.

Australian Council of Superannuation Investors chief executive Louise Davidson said the early departure of Mr Joyce this week had “not erased the issues that concern us” about the terms of his exit. “We still expect the board to carefully consider any executive bonuses in light of the issues the company is facing,” Ms Davidson said.

“The question investors will ask is, ‘how does the board justify any bonus outcomes given the legacy issues Mr Joyce is leaving behind’?”

Ms Davidson said the council was keen to hear of the board’s plan to repair the reputational damage done to the airline in recent times, and how the organisation planned to rebuild public trust and confidence.

Qantas chairman Richard Goyder this week said the airline would consider whether to claw back executive bonuses paid to Mr Joyce, due to a furore over the carrier allegedly selling tickets for cancelled flights. In the lead-up to Qantas’ annual meeting in November, the board is under increasing pressure to recover some of those generous payments, including unvested shares totalling $3m.

Institutional Shareholder Services (ISS), which provides proxy voting advice to the airline’s major investors such as State Street, BlackRock and pension funds, said it was seeking more explanations from the board on a number of issues.

The now former chief executive of Qantas, Alan Joyce

ISS head of Australian research Vas Kolesnikoff said that included not only the $26m “golden handshake” awarded to Mr Joyce but his sale of Qantas shares earlier this year.

Mr Joyce sold most of his 2.5 million Qantas shares – which he had accumulated after becoming chief executive – on June 1 when they were trading at $6.74. He pocketed just shy of $16.87 million from the sale, and was left with about 229,000 shares in the company. Qantas shares closed yesterday at $5.57.

“I would not think the board will want to wait until the annual general meeting to explain some of these issues,” Mr Kolesnikoff said. “There is a lot more water that needs to flow under the bridge in relation to these issues. Some of these decisions have not made a huge amount of sense and there needs to be more transparency.”

Institutional Shareholder Services head of research Vas Kolesnikoff.

He said boards involved in previous corporate crises had made timely explanations of their actions. He pointed to Rio Tinto’s disclosures over its destruction in 2020 of rock shelters at Juukan Gorge, near it Brockman iron ore mine in the Pilbara, Western Australia and the resignation of NAB chairman Ken Henry in the wake of criticism from banking royal commissioner Kenneth Hayne in 2019.

Mr Kolesnikoff said that while there may be pressure for further changes at the board level he was confident Mr Goyder would not resign anytime soon. Mr Goyder has ruled out stepping down from the embattled airline, saying he was “fully committed” to the role, but Australian Shareholders’ Association chief executive Rachel Waterhouse questioned whether he had the time to devote to oversight given his other directorial duties. Mr Goyder also is chairman of Woodside Energy and the Australian Football League Commission.

Qantas’ new chief executive Vanessa Hudson, chairman Richard Goyder and Alan Joyce earlier this year.

Aitken Mount Capital Partners founder Angus Aitken said Mr Joyce and the Qantas board had completely misread the Australian population and their perceptions about the carrier. “You have even had Shayne Elliott from ANZ questioning the Qatari decision,” Mr Aitken said. “I can see why Shayne is frustrated with the perceived special treatment Qantas seems to get over all other large companies like his own.” Speaking at a business lunch in Brisbane last week, Mr Elliott said he “liked flying Qatar Airways” and he was concerned the government would prevent the carrier from increasing flights to Australia to ensure Qantas remained profitable.

His remarks followed comments by federal Assistant Treasurer Stephen Jones, who said the government did not want to drive airfares down to a level where it was unsustainable for the existing Australia-based carrier. “I think that’s really disturbing and I don’t understand why one company is given that support,” Mr Elliott said