Shareholders reject Qantas pay plan, but push to dump directors fails at turbulent AGM

The Qantas board has been dealt a resounding rejection of its pay plan which let the airline’s controversial former boss Alan Joyce walk away with $21.4m.

Qantas shareholders have resoundingly opposed the airline’s remuneration report for the 2023 financial year, with 83 per cent voting against the motion, after a string of controversies damaged the national carrier’s reputation.

Just 16.95 per cent of shareholders voted in favour of the airline’s pay plan which gifted former Qantas boss Alan Joyce $21.4m on his early exit, with chair Richard Goyder indicating that the airline needed to rebuild travellers’ trust.

“This is obviously a very clear message from shareholders,” outgoing chairman Richard Goyder said.

The result is the first remuneration strike recorded against Qantas in its history. If a second strike is recorded at the 2024 AGM it will result in a spill of board positions.

But a push to dump four Qantas directors facing re-election has overwhelmingly failed at the airline’s annual general meeting on Friday, representing a vote of confidence in the airline’s leadership.

Qantas chief executive Vanessa Hudson was elected as a board director despite a push from the Australian Shareholders Association to block her appointment. Picture: NCA NewsWire / Luis Ascui

Despite protests from some shareholders, board members Todd Sampson, Belinda Hutchinson, Heather Smith and Doug Parker were all re-elected.

Prior to the meeting, large shareholders and all proxy adviser services had warned the airline’s board needed to improve accountability so that it could restore Qantas’ flagging reputation.

A push by some shareholders against installing Ms Hudson as a Qantas board director and denying her eligibility for Qantas’ long-term bonuses scheme also failed.

The Qantas boss will remain on the board as long as she remains in the top job.

Chairman Richard Goyder has already announced he will leave the embattled airline in the next 12 months alongside board members Jaqueline Hey and Maxine Brenner. Non-executive director Michael L’Estrange is retiring at Friday’s meeting.

Embattled Qantas board director Todd Sampson survived a push from shareholders to reject his re-election. Picture: NCA NewsWire / Luis Ascui

Mr Goyder acknowledges ‘things we got wrong’

Kicking off the annual general meeting, Mr Goyder acknowledged the national carrier had failed to meet customers’ expectations.

“It’s clear there has been a substantial loss of trust in the national carrier, and we understand why. There are things we got wrong. Things we should have handled better. Things we should have fixed, faster. And for all of those, we apologise,” he said.

Ahead of an expected investor backlash over the airline’s remuneration report, Mr Goyder said he had spoken to several shareholders.

“It’s clear that there will be an overwhelming vote against our remuneration report, which is almost a complete reversal of the 90-plus per cent support in recent years,” Mr Goyder said.

“Please know this: We hear the message this strong vote sends, particularly in response to broader frustration with past events, and it galvanises our efforts to restore your confidence.”

Selling ghost flights not ‘for commercial gain’

Responding to the ACCC’s investigation into allegations Qantas sold tickets for flights that had already been cancelled, Mr Goyder said the airline’s post-pandemic restart had proved more challenging than anticipated.

“Fundamentally, staffing and supply chain issues in the first half of 2022, exacerbated by the impact of Omicron, meant we just didn't have the resourcing we thought we would have to operate our schedule,” he said

Mr Goyder said the airline had made large cuts to flights to stabilise operations and that resulted in thousands of cancelled flights.

“We acknowledge there were some delays in communicating with our customers. This wasn't done for commercial gain but to give us time to find alternative flights for our passengers either on Qantas or other carriers,” he said.

In its defence filed earlier this week, Qantas said its customers were purchasing a “bundle of rights” as opposed to a specific flight when they booked travel.

With board approval, Qantas spent $370k on supporting the Voice. Picture: NCA Newswire / Gaye Gerard

Goyder defends $370k Voice spend

Fielding questions from shareholders over the unsuccessful referendum to establish a constitutionally enshrined Voice to Parliament, it was revealed Qantas spent $370,000 on its support.

During the AGM, shareholders questioned the endorsement of the “Yes” campaign, despite polling results which showed the proposal was doomed to fail.

But Mr Goyder explained that the decision to support the campaign was approved by the board and was consistent with Qantas‘ prior commitments to advancing constitutional recognition for Indigenous people.

“We knew there would be a diverse set of views but we thought it was important to endorse the yes campaign,” Mr Goyder said.

The funding was spent on emblazoning “Yes” livery on three aircraft and covering the cost of flights for official “Yes” campaigners.

Still $520m in outstanding flight credits

There are still $520m worth of pandemic-era flight credits that Qantas is yet to return to travellers, Ms Hudson has revealed.

“The balance is coming down. So in August it was $750m … it’s (now) $520m,” Ms Hudson said.

“As a leadership team we are focused on making sure that all credits are either redeemed or refunded to customers.

Ms Hudson said redeeming the flight credits was an “ongoing effort” and Qantas had boosted the number of staff in its call centres to expedite refunds.

Customers with Qantas flight credits are able to claim a cash refund at any time after the airline scrapped the expiry in August.

‘Shame on you’: Goyder met with jeers

Responding to fiery questioning over the approval granted to Mr Joyce to sell about 80 per cent of his shares amid an investigation from the competition watchdog, Mr Goyder cut off the microphone.

Mr Goyder’s intervention was subsequently met with jeers from the shareholders in the audience, who shouted “shame on you”.

“I have absolutely zero concern about the ethics of the people here,” Mr Goyder said, claiming that Mr Joyce’s share sale complied with Qantas’ disclosure requirements.

On July 23, Mr Joyce received approval to sell the vast majority of his shares in the airline for $6.34 a share. Since then the share price has plunged 22 per cent.

Mr Goyder rejected claims that former chief executive Alan Joyce’s share sale was unethical. Picture: NCA NewsWire / Luis Ascui

Qantas scandals stack up

Public anger against the national carrier came to a head in August when Qantas revealed a super-sized $2.47bn pre-tax profit result while it slashed costs and struggled to offer adequate customer service.

A class-action lawsuit over pandemic-era refunds, an ACCC investigation over selling cancelled “ghost flight” fares, and the refusal to repay $2.5bn in government subsidies added to the airline’s woes.

A separate High Court ruling in September upheld a Federal Court decision that found the airline illegally sacked 1700 workers during the Covid-19 pandemic. The retrenched staff are expected to receive hundreds of millions of dollars in compensation.

The airline’s role in lobbying the federal government against an application from Qatar Airways to increase the number of flights to east coast capitals has also received intense criticism.

Originally published as Shareholders reject Qantas pay plan, but push to dump directors fails at turbulent AGM