Qantas Airways has significantly reduced former CEO Alan Joyce’s final payout, cutting his multi-million-dollar package by almost $10 million.
On August 7, 2024, Australian Securities Exchange (ASX) shared a statement confirming that Joyce’s pay would be slashed after the airline lost a Federal Court of Australia case.
Joyce was initially set to receive a total remuneration package valued at $23.6 million. However, the board decided to withhold $9.26 million of this amount. In addition, his short-term bonus has been cut by 33% to $900,000.
Out of a $14.4 million bonus package that could have been taken back by the airline’s board, $8.3 million was tied to long-term bonuses, $3.9 million to business performance, and the remaining $2.2 million was withheld by the board due to ongoing Australian Competition and Consumer Commission (ACCC) action.
Qantas suffered a massive hit to its reputation in 2023 after gaining bad press for the “ghost flights” scandal.
Qantas advertised tickets for more than 8,000 flights scheduled to depart between May and July 2022 that were canceled but not removed from sale. Qantas continued to sell tickets for about two weeks, and in some cases as long as 47 days after flights were canceled.
In a statement, published on August 8, 2024, Qantas said those events “damaged [the airline’s] reputation and caused considerable harm to relationships with customers”.
“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 airline explained.
As part of a settlement with the ACCC, the carrier has admitted to misleading customers in relation to flight cancellations and will pay a $100 million penalty to the Federal Court.
In addition, the airline will reduce short-term bonuses for current and former senior executives by 33% in 2024. As a result, the company expects a total reduction of $4.1 million in short-term incentives in the financial year of 2023.
Joyce will still receive more than $12 million for his time at the airline in the 2023 financial year. After 15 years with Qantas, he left the airline with $125 million.
On September 5, 2023, Qantas announced a change in management, indicating that Joyce will retire two months earlier than planned. He was replaced by the current CEO, Vanessa Hudson, who took the post on September 6, 2023.
