Qantas slashes former CEO Alan Joyce’s exit package by $8m after damning governance report
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The move on former Qantas CEO Alan Joyce’s remuneration follows an internal review of the string of damaging events that led to his departure in 2023.
PHOTO: ST FILE
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SYDNEY – Australia’s Qantas said it was cutting its former chief executive Alan Joyce’s exit bonuses by A$9.3 million (S$8.1 million) after an external review found him responsible for measures alienating travellers, employees and shareholders during the Covid-19 pandemic and beyond.
The decision marks a gloomy footnote to Mr Joyce’s 15-year reign at Australia’s dominant airline.
He had brought forward his retirement to September 2023 under a cloud of lawsuits alleging unfair pandemic sackings and sale of tickets to cancelled flights.
Qantas was one of Australia’s top brands for years even as he leaned into controversy.
In 2011, he grounded its entire fleet over a union dispute, but the sacking of 1,700 ground staff in 2020 while collecting Covid-19 stimulus payments, followed by a surge of flight cancellations and lost luggage once pandemic border restrictions were lifted, prompted analysts to warn that the cost of repairing the airline’s reputation may hurt profit.
Mr Joyce’s final compensation totalled A$21.4 million, including bonuses, but the company said at the time that it reserved the right to withhold some pending an external review of how the airline, which sells nearly two-thirds of Australian domestic fares, was run.
Qantas published the review on Aug 8, which blamed the company’s reputational crisis on a “command and control” leadership style and said it was cutting Mr Joyce’s final package to just over half the original amount.
“There was too much deference to a long-tenured CEO who had endured and overcome multiple past operational and financial crises,” the report by McKinsey & Co senior adviser Tom Saar said.
“(Qantas) had a ‘command and control’ leadership style with centralised decisions and an experienced and dominant CEO,” the report added.
“This contributed to a top-down culture, which impacted empowerment and a willingness to challenge... decisions of concern. That cultural characteristic underpinned some of the events that affected the group’s reputation.”
Qantas has already replaced some directors and top managers. It was also resetting its relationships with external stakeholders, the report said, in light of an “adversarial approach to engagement” under Mr Joyce.
The airline had brought in a stricter internal approval process for CEO share sales, the report said, noting that his sale of A$17 million of Qantas shares in June 2023, a few months before his scheduled retirement, contributed to a loss of trust among stakeholders.
Qantas agreed in May to pay A$120 million to settle a regulator lawsuit over the sale of thousands of tickets on already cancelled flights.
The airline, which reports full-year results on Aug 29, is still waiting to learn how much it must pay after losing a separate lawsuit, which found it illegally fired 1,700 ground staff in 2020 to stop them from taking industrial action such as strikes. REUTERS
