The Qantas board has decided to cut Alan Joyce’s final pay packet by $9.26m after his tumultuous final year in charge of the carrier that included a string of legal scandals before his early exit.
Calls to hold the former chief executive accountable for the damage to the Qantas brand had been mounting since last year, when his final $21.4m in total earnings for the 2022-23 year were revealed.
The board said in September that it had withheld $10.5m of that amount as it considered using clawback provisions in his contract in light of concerns about his performance.
On Thursday the board announced its decision to dock him 100% of shares held on the long-term incentive plan from 2021-23, valued at $8.36m.
The board also decided on a 33% reduction to his short-term incentive, valued at about $900,000. That included a previously announced 20% reduction.
Joyce, who became the airline’s chief executive in 2008, had planned to step down from the role in November but brought this forward to September. His departure came after a string of legal scandals and public anger at poor customer service and the airline’s decision to put an expiry date on hundreds of millions of dollars in Covid-era credits – at a time of stubbornly high air fares and a record $2.47bn profit.
Other Qantas executives will take a 33% reduction to their pay, including Vanessa Hudson, the current chief executive, previously the chief financial officer. These measures are expected to clawback in excess of $4m from other executives.
A self-launched review into the airline’s governance has found that “considerable harm” had been done under Joyce’s leadership.
In its governance report released on Thursday the airline acknowledged the magnitude of what went wrong: “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.”
It noted that the financial hit from legal action by the consumer watchdog – related to selling tickets to thousands of flights Qantas had already cancelled in its internal system – had led to a settlement costing the carrier $100m in penalties and $20m in compensation costs. Additionally, the airline was bracing to incur significant costs – reportedly in excess of $100m – in compensation for ground handlers it was found to have illegally dismissed during Covid shutdowns.
The review found that a “top-down” culture at Qantas meant other leaders felt they couldn’t speak up to challenge Joyce on controversial decisions: “There was too much deference to a long-tenured CEO who had endured and overcome multiple past operational and financial crises.”
This included the company’s tendency, under Joyce, to have “an adversarial approach to engagement with key stakeholders and external communications”. The review also found that the Qantas board “was financially, commercially and strategically oriented” and recommended in the future this focus “should be complemented by enhanced focus on non-financial issues, employees, customers and all stakeholders”.
The Labor senator Tony Sheldon – a former official at the Transport Workers’ Union which has had a combative relationship with Qantas – said the clawback decision for Joyce was the correct one.
“It ensures he experiences at least a small fraction of the suffering Qantas inflicted upon its workers and customers throughout his tenure,” Sheldon said.
Joyce has been contacted for comment.
