Australian airline Qantas is cutting the remuneration for its former CEO Alan Joyce by A$9.26m ($6m) after a board review found he was partially responsible for the slew of reputation and employment issues that have hit the company since the Covid-19 pandemic.
The announcement came after a wider report on executive responsibility by business advisor Tom Saar in light of the airline’s recent legal issues, including a $79m settlement with the Australian Competition and Consumer Commission (ACCC) on claims covering tickets sold for cancelled flights.
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A company statement said: “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 exact reductions made to Joyce’s payout relate to a 100% forfeiture of shares held on the former CEO’s behalf under the 2021-2021 long term incentive plan, worth A$8.36m, and a 33% reduction of his short term incentive for FY23.
Joyce was replaced as CEO by Vanessa Hudson in mid-2023 after bringing forward his retirement as the company sought to recover its public reputation amid a series of scandals, with Hudson apologising to customers for the company’s failure to deliver its services “the way we should have”.
Alongside the ACCC’s accusation that Qantas sold tickets for flights it had already cancelled or failed to give timely notice of cancellations, the company also saw a high court rule that it had unlawfully outsourced ground handling staff during the pandemic.
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By GlobalDataDuring the executive shakeup last year, Qantas also said goodbye to its Qantas Loyalty CEO Olivia Wirth, non-executive director Michael L’Estrange, and two board members, while board chairman Richard Goyder will step down in September.
Other decisions made by the board after Saar’s review included a commitment to implementing 32 recommendations on how the company could recover from its reputational damage.
Recommendations included tightening protocols for approval of share trading by senior management, amending Qantas’ remuneration framework, and completing more detailed reporting to the board on customer metrics, employee engagement, and stakeholder relations.
John Mullen, the board’s chairman elect, said: “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.
“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.”
