Qantas reveals $10.5m risk to Alan Joyce’s golden handshake

The former Qantas boss’s final pay outcome has been calculated at $21.4m, but could sink as low as $13m if the board enacts clawback provisions.

Richard Goyder says he cannot ignore the ‘acute loss of trust in Qantas from the community and accumulated disappointment from customers’. Picture: Getty Images

The inglorious end to Alan Joyce’s 15-years as Qantas CEO has cost him at least $500,000 with a further $10.5 million in doubt after the board finally acted in response to an “acute loss of trust” in the airline.

After a two-week delay in lodging its annual report, Qantas revealed all on Wednesday in a move aimed at appeasing investors and shoring up the job of chair Richard Goyder.

His actions to dock and withhold Mr Joyce’s $2.7m short term bonus and potentially clawback another $8.3m from Mr Joyce, threatened to reduce the former CEO’s final pay from $24m to just over $13m.

Mr Goyder said there was much to be positive about in Qantas’ financial affairs, but he could not ignore the “acute loss of trust in Qantas from the community and accumulated disappointment from customers”.

Discontent among Qantas customers has been building for some time over high airfares, hard-to-use travel credits and poor performance but Mr Goyder said an Australian Competition and Consumer Commission lawsuit had caused the most damage.

The Federal Court case alleged Qantas engaged in “false, misleading or deceptive behaviour” by selling tickets on more than 8000 already cancelled flights between May and July 2022.

“We recognise the important role of the ACCC and the company has co-operated fully with its investigations, which only crystallised into material allegations when legal action was announced on August 31 this year,” Mr Goyder said.

“These allegations are concerning and have the board’s full attention.”

Until more information was known about the case, all executive short term bonuses were being docked 20 per cent and withheld, including Mr Joyce’s $2.2m payment.

Another $8.36m that formed part of his final pay outcome of $21.4m was subject to “clawback provisions, should the board determine that to be necessary”, said Mr Goyder.

What it would take for those clawback provisions to be enacted was unclear with the board “awaiting more information” in relation to the ACCC lawsuit and the penalty for Qantas’s illegal outsourcing.

The Australian Shareholders Association said it was encouraging to see the board responding to concerns about Qantas’ performance by withholding short term bonuses, increasing the weight of customer outcomes in determining bonuses, and disclosing the potential clawback amount for the former CEO.

But ASA chief executive Rachel Waterhouse said they remained of the opinion Mr Goyder should be replaced as chair.

“He should go, but the context is he needs to make sure there’s someone on that board who’s ready to step up, that’s going to be a good chair for Qantas,’’ she said.

“What we don’t really know is what happens behind the scenes and what succession planning is in place, but what we do know is that Richard Goyder and the former chair both had only joined the board and within a year they became the chair, so that’s a little unusual.

“So do they have the capability on that board for someone to step up?’’

Ms Waterhouse said there were also questions as to whether Mr Goyder had provided adequate oversight of Mr Joyce.

“Our view, and again, we don’t know all the detail, but we would question whether he’s really challenged the CEO during that time,” she said.

Transport Workers Union national secretary Michael Kaine, who has repeatedly called for Mr Goyder to go, said the remuneration for Mr Joyce was “sickening”.

“The board has little choice but to clawback the millions still up in the air,” said Mr Kaine.

“The so-called ‘recovery’ plan installed by Mr Joyce and endorsed by the board has actually been a plan to self-destruct.”

He said Mr Goyder had “presided over the downfall of Qantas”, yet after a string of controversies he still would not repent.

“His time is up, he’s out of touch with public fury, he has to go,” Mr Kaine said.

“We need a fresh start at Qantas.”

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

As well as the ACCC lawsuit, Qantas was yet to learn the full extent of the fallout from a High Court decision upholding previous rulings that the airline unlawfully outsourced nearly 1700 jobs.

In a hearing before Federal Court Justice Michael Lee on Wednesday, new Qantas CEO Vanessa Hudson was ordered into mediation with the TWU to determine compensation for the affected workers.

In doing so, it was hoped there would be a speedy end to the drawn out case, Justice Lee observed.

“There’s 1700 people whose lives have been affected together with their families and I wish to ensure the matter is resolved as soon as I can,” he told the court.

Mr Goyder acknowledged there was “much work to do” but indicated he and the board were

“We’re determined to bring Qantas back to its position as one of the most trusted brands,” he said.

“That can only happen by consistently delivering to the standards people rightly expect and the board is working closely with Vanessa and her new management team to ensure that happens.”

In her last year as chief financial officer, Ms Hudson took home $5.1m up from $1.4m the previous year while other executives enjoyed similarly large pay hikes thanks to long term incentive payments and recovery and retention bonus.

Qantas Domestic CEO Andrew David collected $4.95m, Qantas Loyalty CEO Olivia Wirth saw her income leap from $1.25m to $4.3m and Jetstar boss Steph Tully made $3.2m.

Qantas share price continued its downward spiral in response to the executive remuneration details in the airline’s annual report lodged with the ASX on Wednesday.

At the close of trade, Qantas shares were down 2.2 per cent at $5.33, the lowest in almost a year.

Originally published as Qantas reveals $10.5m risk to Alan Joyce’s golden handshake