Qantas Cuts Alan Joyce’s Pay by Nearly $10 Million After Legal Scandals

Former Qantas chief executive Alan Joyce has seen his multi-million-dollar payout cut by almost $10 million. The airline made this announcement recently through a statement shared on the Australian Securities Exchange.

This reduction comes in the wake of Qantas losing a significant High Court case over the illegal dismissal of ground staff back in 2020, along with a recent settlement with the ACCC related to flight cancellations.

Joyce’s total remuneration package, which was valued at around $23.6 million when he resigned last year, is now being docked by $9.26 million. Of this, $14.4 million was flagged as potentially being reclaimed by the airline’s board.

The breakdown shows that $8.3 million relates to long-term bonuses, $3.9 million is connected to pro-rata business outcomes, and another $2.2 million was withheld while ACCC actions were still pending.

After this adjustment, Joyce is still in line to pocket over $12 million for his tenure at the airline during the 2023 financial year. This includes losing $8.36 million worth of Qantas shares based on current market values, and his short-term incentive bonus being cut by 33%, bringing it down to $900,000.

During his impressive 15-year career with Qantas, Joyce earned around $125 million in total. Vanessa Hudson has since taken over his role as the head of the airline.

A newly released statement clarified that damage to Qantas’s reputation came from a variety of factors. While leaders found no evidence of deliberate wrongdoing, they acknowledged that mistakes were made leading to significant issues with customer service and relationships.

The Qantas board has also announced that it will reduce short-term bonuses for current and former senior executives by 33%. This means a total reduction of about $4.1 million in the overall FY23 short-term incentives.

After a harsh protest vote from shareholders against executive compensation plans, Qantas’s management is currently on notice to improve performance or face potential consequences at the next AGM.

The recent governance review, initiated last October, revealed that a ‘top-down’ leadership style under Joyce discouraged robust discussion among management and led to critical mistakes that hurt the airline’s reputation. It emphasized a need for more openness and communication in the organization.

The report also pointed to past managerial decisions that did not adequately consider risks beyond immediate financial performance, especially during the tumultuous times of the COVID-19 pandemic.