One of the three major ‘proxy firms’ representing Qantas shareholders has recommended investors vote down one of CEO Alan Joyce’s bonus packages.
The AFR reports that ISS has told its members that his targets aren’t “sufficiently challenging” ahead of a crucial AGM meeting on Friday.
Qantas said in response that Joyce was the only CEO on the ASX 100 not to receive a bonus in three years, and added that the group was the only proxy adviser to take such a stance.
“All of the other major shareholder advisers – CGI Glass Lewis, Ownership Matters, ACSI and the ASA – are supporting the FY22 remuneration report and incentives,” it said.
The disagreement involves the shorter-term ‘executive retention scheme’, which targets include keeping Qantas’ net debt below a target level; cutting $1 billion of costs by June; and returning the wider company to profitability by the end of the current financial year.
Should those goals be met, Joyce would receive shares worth around $4 million at current prices.
The dispute comes despite Qantas this month revealing it was on course for a remarkable turnaround that will see its target an underlying profit before tax of up to $1.3 billion in the first half of the current financial year.
The result comes despite the wider group recording an underlying loss before tax of $1.86 billion in its last full-year results and claiming the pandemic cost its airlines $7 billion in total.
Qantas appears to be taking advantage of pent-up demand for domestic travel, and now believes its revenue for leisure travel is at more than 130 per cent of pre-pandemic levels.
The strong performance has led to support from key figures in the airline and wider industry.
Qantas chairman Richard Goyder, for instance, used a column in the AFR to argue that Joyce and his executive team have done “exceptionally well” to steer the airline through a pandemic that “sent other airlines and their creditors packing”.
He said Qantas is now well on its way to fixing its problems, quipping, “If you haven’t heard this, it may be because the data showing the improvement received far less media attention than stories showing how bad things got.
“In the meantime, the corporate obituary writers have been busy. Their analysis has (mostly) been unencumbered by what’s happening at other airlines, or that Qantas’ performance has turned around.”
Flight Centre CEO Graham Turner also rode to Joyce’s defence, arguing “ineffective lockdowns” were more to blame for Qantas’ troubles than its CEO.
Joyce’s annual salary, however, has increased by 15 per cent to $2.27 million despite a string of problems to plague the business this year, including record delays and hours-long call wait times.