Qantas board urged to act on executive bonuses left in limbo ahead of the AGM

As the Qantas board gears up for a fiesty AGM on Friday it has been urged to act decisively on executive bonuses which remain in limbo as the airline navigates various crises.

Superannuation giant and Qantas shareholder HESTA has warned the airline’s board to act decisively on executive bonuses to help regain the trust of stakeholders including investors.

Millions of dollars in short term bonuses, including $2.7m earmarked for former CEO Alan Joyce remain “withheld” by the board until current crises are resolved.

On Tuesday, HESTA chief executive Debby Blakey said having the bonuses “outstanding” was not a good look for Qantas, and decisive action was needed.

“We encourage the board to reflect on the potential detriment to the long-term value of the company when finalising these,” she said.

Her warning came ahead of the Qantas AGM in Melbourne on Friday at which chairman Richard Goyder, his fellow directors and executives were expected to face a hostile reception from shareholders over corporate governance failures and major brand damage.

In the space of a few months, Qantas has faced a series of controversies over its handling of Covid travel credits, a widespread freight failure, the illegal sacking of 1700 workers and the sale of tickets on already cancelled flights.

On Monday Qantas filed its defence against Australian Competition and Consumer Commission allegations over the “ghost flights” ticket sales, arguing the airline did not sell a particular flight but a bundle of rights to customers.

The claims attracted ridicule from experts who questioned why Qantas would even try to defend its failure to take flights off booking sites for an average of 16 days after they were cancelled.

In the wake of the claims and ahead of the AGM, Ms Blakey said the Qantas board and management had “a long road to walk to regain the trust and confidence of stakeholders, including investors”.

“Fully explaining their decision in the ACCC case is important. Equally though we expect Qantas to strike a genuine balance between the interests of its customers, shareholders and broader stakeholders,” said Ms Blakey.

“It is this balance that is material to the long-term value and reputation of the company.”

Every proxy advisory firm operating in Australia has recommended Qantas shareholders vote against the company’s remuneration report, granting former CEO Alan Joyce a $21.4m final payout.

Ms Blakey said HESTA had also expressed its concern to the company “regarding the quantum of remuneration paid to the former CEO”.

It was possible Mr Joyce could also pocket a further $2.7m if the board decided to release currently “withheld” short term incentive payments.

The bonuses for Mr Joyce and fellow executives were put on hold, until further information was forthcoming in relation to the ACCC lawsuit.

As well as the remuneration report, Qantas shareholders would be asked to vote on another term for directors Todd Sampson and Belinda Hutchinson, the appointment of CEO Vanessa Hudson to the board, and her involvement in the long-term incentive scheme.

There appeared to be some support for Ms Hutchinson as the chair of the audit committee but little for Mr Sampson, given his experience in advertising and marketing and the damage to the Qantas brand.

Originally published as Qantas board urged to act on executive bonuses left in limbo ahead of the AGM