Australian airline Qantas has said it will claw back millions of dollars of bonuses paid to ex-CEO Alan Joyce, citing poor performance and a series of damaging public scandals.
Qantas said it had made the decision taking into account the "challenges" facing the airline and "in recognition of the customer and brand impact of cumulative events".
Joyce left Qantas suddenly last September, bringing forward his retirement as the airline fought legal battles on several fronts and was suffering from a significant negative sentiment shift as a result.
On 08 August, Qantas announced that Joyce’s renumeration for the 2023 financial year would be reduced by $9.26 million.
However, the Qantas board announced that it had found no evidence of “deliberate wrongdoing” by Joyce or other senior leaders but that his mistakes warranted withholding millions of dollars in bonus payments that had been due to make up his annual salary.
The bulk of the forfeited bonus relates to $8.36 million in Long Term Incentive Plan payments which is being 100% withheld, while the board has also decided to reduce a short term incentive bonus by 33%.
“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,” the airline said on Thursday.
The largest part of this reduction is due to the airline’s board deciding that Joyce should not be given any of the shares that were held for him as part of his long term incentive plan, which had a collective value of $8.36 million, based on a $6.20 share price on June 30, 2023.
In publishing the reductions to what will be Joyce’s final payout, Qantas flagged the industrial relations case it lost, for the third time, in September 2023 and the case brought against it by the the Australian Competition and Consumer Commission (ACCC) last year, for continuing to sell flights that had already been cancelled and failing to notify passengers of cancellations in a timely fashion.
A statement from the carrier continued:
“In reaching these decisions, the Board has considered the individual and collective accountability of members of the Group Management Committee. The Board has also taken into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline through that period.”
Just weeks after Joyce stepped down from his role as CEO, the airline announced that he was set to receive a bumper $21.4 million annual pay award, although board of directors said that it could ‘clawback’ a $8.3 million if deemed necessary.
At the time, Qantas was facing a multi-million-dollar lawsuit from Australian regulators who had accused the airline of continuing to sell tickets for more than 8,000 flights that had already been cancelled.
Qantas also enraged once-loyal Australians by charging high ticket prices despite record profits and getting a multi-billion-dollar taxpayer-funded bailout during the pandemic.
The Australian carrier also released details of a governance review today, which paints an unfavourable picture of the airline under Joyce’s leadership, referring to top down leadership, there being a “‘command and control’ leadership style”, a focus on financial performance over stakeholders and the board not challenging its “dominant” leader enough.
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