Former Qantas CEO Alan Joyce to lose $9.26 million, executives face 33pc bonus cuts over damning scandals

Former Qantas chief executive Alan Joyce will lose more than $9 million from his final pay packet following a review that quizzed senior executives over a litany of scandals that beset the airline during and after the pandemic and trashed its public image. Other executives — including current CEO Vanessa Hudson — also face a 33 per cent cut in their short-term bonuses. Mr Joyce beat an early retreat from Qantas in September last year — two months ahead of his planned departure — as the airline suffered a series of public relations disasters. The most damning was court action launched by the Australian Competition and Consumer Commission over so-called “ghost” flights, with the watchdog claiming it sold tickets on more than 8000 services between May and June in 2022 that had already been cancelled. Qantas was also found to have illegally sacked 1700 ground workers at the height of the COVID pandemic and copped a public backlash over sky-high airfares, poor customer service, lost luggage and delayed or cancelled flight in the months after coronavirus travel borders were lifted. The airline on Thursday said under forfeiture provisions for its long-term incentive plan, the board ruled that 100 per cent of the shares held on Mr Joyce’s behalf covering 2021 to 2023 — and valued at $8.36 million — would be forfeited. He also copped a 33 per cent reduction in his short term incentive for the 2022-23 year valued at about $900,000, taking his total bonuses loss to $9.26m. Mr Joyce — who sat the top of Qantas for almost 15 years — will be left with just $1.8 million in bonuses. The reduction clawed back represents close to half of Mr Joyce’s total planned pay last year and includes all the Qantas shares set aside for him as a long-term incentive. The board said he Joyce had “overall accountability and responsibility for the outcomes of the business”. “The events that damaged Qantas and its reputation and caused considerable harm to relationships with customers, employees and other stakeholders were due to a number of factors,” the airline said. “The board has also considered information that has arisen as part of the governance review in reaching these decisions, which has been released today. “While there were no findings of deliberate wrongdoing, the review found that mistakes were made by the board and management which contributed to the group’s significant reputational and customer service issues.” The review — which Qantas said “scrutinised the decision-making and governance processes of the board that led to the loss of trust” — tabled 32 recommendations, which Qantas said had either already been implemented or were now under way. “The review found that mistakes were made by the board and management which contributed to the group’s significant reputational and customer service issues,” it said. The hammer blow over bonuses comes after the board, led by WA corporate titan Richard Goyder, imposed a 20 per cent reduction in short term incentives for the 2022-23 financial year as Qantas faced a barrage of criticism from furious passengers over a botched COVID-era credit and refund scheme, flights delays and cancellation, anger of sky-high fares and poor customer service. Like its rivals, the airline struggled to ramp up operations once domestic and international pandemic borders were lifted and was unprepared for the unprecedent wave of demand for travel after years of lockdowns. Amid the chaos, it was also embroiled in the Federal Government’s shock decision to block a push for 28 additional flights a week into Australia by rival Qatar Airways, with suggestions the call was made to protect its profits amid heightened demand for international travel. The board also withheld the balance of 2022-23 short term incentives for senior executives given the ACCC actions over the “ghost flights” scandal and a High Court ruling against its decision to outsourced ground handling work. Qantas said current non-executive directors who were on the board during the time covered by the governance review would take a 33 per cent reduction to their directors’ base fees this year. “In reaching these decisions, the board has considered the individual and collective accountability of members of the group management committee,” it said. “The board has also taken into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline through that period. The combination of these factors is reflected in the reduction in the short term incentives.” Business adviser Tom Saar was hired by Qantas to carry out the investigation. He found there was excessive deference toward Mr Joyce, who had overcome previous crises, and decisions weren’t sufficiently challenged. There was also too much focus on financial and commercial goals and not enough attention on customers and staff, Mr Saar said. Qantas earlier this year admitted to misleading passenger over the ghost flights and agreed to a $100m penalty and a $20m customer remediation program. It is still locked in talks over compensation for the sacked groundworkers. Mr Goyder also faced the wrath of passengers, shareholders and unions over the scandals. His staunch defence of Mr Joyce’s final tumultuous year at the helm raised eyebrows and ultimately led to his decision last October to step down, conceding the board needed to be held accountable for the issues plaguing Qantas. Mr Goyder was set to depart sometime ahead of Qantas’ annual general meeting in October but no fixed date had been set. Qantas has now revealed he will depart the role on September 16 to make way for chair-elect John Mullen, a former chair for Telstra. Mr Mullen said the review provided “clear direction” for the board and management to build a better, stronger Qantas and restore pride in the national carrier. “It’s important that the board understands what went wrong and learns from the mistakes of the past as it’s clear that we let Australians down,” he said. “As the national carrier it is our duty to make sure we always act in the best interest of stakeholders and hold ourselves to the highest level of accountability.” The Australian Council of Superannuation Investors said the airline’s announcement was “an important step in Qantas’ governance reset”. “It is critical that the company learns from the mis-steps identified and the new board puts all of the recommended changes into practice,” said Ed John, executive manager of stewardship.