Qantas Airways Ltd. cut the final payout to former CEO Alan Joyce by 9.3 million Australian dollars (6.1 million US dollars) and announced a restructuring of the company’s management after an audit found that errors by the board and management were partly responsible for the airline’s reputational crisis.
The long-awaited ruling on Joyce’s remuneration followed an internal review of a series of damaging post-pandemic events that led to Joyce’s early departure in September 2023. The money reclaimed represents almost half of Joyce’s total scheduled salary for the final year and includes all Qantas shares set aside for him as long-term remuneration.
The airline’s problems included a rise in cancellations and lost baggage, regulator allegations that Qantas sold tickets for flights that had already been removed from the schedule, and a court ruling that Qantas illegally dismissed around 1,700 ground staff. Joyce bears “overall responsibility and accountability for the results of the business,” Qantas said in a statement.
Joyce’s pay cut reflects the conclusions of an internal report released by Qantas on Thursday that identified a series of board and management failings in the final months of Joyce’s 15-year tenure.
Qantas’s management consultant, Tom Saar, who oversaw the investigation found that Joyce, who had overcome previous crises, was given too much respect and decisions were not sufficiently questioned. There was too much focus on financial and commercial goals and not enough on customers and employees, Saar said.
The release of the report suggests that Qantas is taking a more transparent and less confrontational approach under Joyce’s successor, Vanessa Hudson. The findings themselves largely reinforce the long-held perception that Qantas and its then-dominant CEO Joyce failed passengers and staff in the wake of Covid-19 as the airline sought to return to profitability.
Qantas’ board and management are taking action to implement all 32 recommendations in Saar’s report, the airline said. Many of the required actions have already been completed or are underway, it added. However, the review concluded that the damage to the airline has not yet been fully repaired.
“There remains much work to be done to restore confidence among all stakeholders,” said Qantas Chairman-designate John Mullen.
In his report, Saar listed five main causes for the airline’s crisis.
| Dynamic | How it went wrong: |
|---|---|
| Culture | Too much focus on financial performance |
| guide | Top-down style with insufficient listening |
| Corporate management | The board did not question enough |
| Impact of Covid | The consequences of decisive action were not appreciated |
| External communication | Combative approach exacerbated problems |
An Australian group representing institutional investors, including superannuation funds, called the airline’s announcement “an important step in the re-orientation of Qantas’ corporate governance.” Ed John, executive manager of stewardship at the Australian Council of Superannuation Investors, said: “It is critical that the company learns from the missteps identified and the new board implements all recommended changes.”
Saar also recommended that the CEO and senior managers take a closer look at Qantas’ share dealings after Joyce sold A$16.9 million worth of the airline’s shares, the bulk of his holding, in June 2023. The shares plummeted in the weeks that followed when Australia’s competition regulator accused the airline of selling seats on thousands of so-called ghost flights.
