Qantas boss Alan Joyce wins 71 per cent, $2m pay hike

[Greg McDonald]

I think this is an absolute bl00dy joke and if he had any kind of conscience he should give the entire rise to charity....Try to destroy an iconic airline and get a huge payrise for it!!! All I can hope is that this hastens his demise.

From news.com.au:

QANTAS chief Alan Joyce has been rewarded with a $5 million salary package for his work this year in restructuring the airline, despite giving 1000 workers their marching orders.

The massive 71 per cent increase comes on the back of the $552 million profit announced by Qantas and the airline's strategy to set up an Asian offshoot to help stem losses from its international business.

The rise earned the immediate wrath of Qantas unions, which have been fighting the airline over wages and condition claims for months.

Mr Joyce's package rose from $2.94 million in 2010 to $5 million this financial year.

It also comes as Qantas shares have dived in value this year and the airline's international division lose more than $200 million.

Mr Joyce was among the top echelon of Qantas executives whose total salary packages rose from $8.9 million in 2010 to a total of $14.436 in 2011.

But the airline pointed out that Mr Joyce's final salary package included share-based bonuses - that hinge on meeting performance targets - that he may never received.

A spokesman said that the airline considered his final vested salary as more realistic and this had declined from $3352 million in 2010 to $3.043 million this year.

This meant the salary had to be read not as a rise, but the amount he actually received was nine per cent down on last year.

"Mr Joyce's salary is not excessive compared with other large Australian companies,'' a Qantas spokesman said.

He said Qantas executives have not been awarded a cash bonus for the past two years and Mr Joyce's pay in his last year as CEO of Jetstar in 2007-08 was higher than his pay as Qantas CEO in 2010-11.

Jetstar chief Bruce Buchanan also saw his salary rise from $1.26 to $1.4 million this year, before share payments are accounted for which took the figure back to $905,000.

Pilots union president Captain Barry Jackson slammed Mr Joyce's rise as "abhorrent".

He said it was "a bad look'' when about 200 pilots faced either losing their jobs through redundancy or re-deployment to Jetstar on a lower wage.

"Pilots dedicate a good part of their lives to getting up to the required standard for Qantas and that costs them a lot,'' Captain Jackson said.

"To see Mr Joyce take this kind of money when jobs are being lost is abhorrent and I think Australians will feel that.''

A spokesman for the Australian Licensed Aircraft Engineers Association, also in dispute with Qantas over wages and job security, said the executive rise would only harden the attitude of members.

"It really sends a message about commitment to those workers who really love the company and the Qantas brand,'' he said.

"It is a slap in the face.''

[Will H]

Look around, Greg. Airlines everywhere are bleeding and Qantas is increasing its profit to half that of the mighty EK.

People need to get over this destroying Qantas notion. Not only is it unfounded and does not own up to the reality of the marketplace, the problems were set long before Joyce. He's the first to do something about it, partly because of more urgent needs.

[Gary B]

With all due respect Will, the current CEO could have ordered fuel efficient 777 aircraft as CX, SQ & EK have & are.The majority of the passenger 747's should have been sold some time ago (like CX & SQ).
The CEO is ultimately responsible for the huge Freight cartel fines recently served on Qantas.
Most of the current years profit is derived from QF domestic so based on Joyce's logic for return on investment, the first 787's should go there to replace aged 767's & compete with Virgin for the business market.
It is a flawed plan to have premium A320 a/c trying to compete against Singapore Airlines wide body aircraft. The current CEO has wasted millions of dollars at Jetstar Pacific & is only just supposedly making a small profit after 5 years of losses in Singapore. He is contracting the Qantas network because of inefficient aircraft on the route. Qantas is the only International Airline that can lose money with an 82% load factor. What does that say about yield management or owning the wrong aircraft type?
That wonderful profit also comprised $95 million from Rolls Royce as compensation.How much was derived from compensation for late deliveries of 787's?
The current management is obsessed with the low cost airline strategy. Qantas needs a CEO like Fyfe from Air New Zealand who engages his staff and isn't in conflict with his unions. I think Qantas staff engagement is at the lowest level ever & that is directly related to poor management.

[Ash W]

Two lines seem to have been missed or glossed over in the article above. Namely

"But the airline pointed out that Mr Joyce's final salary package included share-based bonuses - that hinge on meeting performance targets - that he may never received.

A spokesman said that the airline considered his final vested salary as more realistic and this had declined from $3352 million in 2010 to $3.043 million this year."

So his actual cash salary has dropped from (I assume $3352m is really $3.352m) to $3.043m (about 10%) but the whole package has been beefed up with "share based bonus that hinge on meeting performance targets"

So in reality he has taken a cash pay cut and is gambling that the changes he and the board are making will result in the performance targets being met and the share price improving.

Maybe the pilots etc need to do the same. Take a 10% pay cut and then put some faith in the board that the company will grow and prosper. Reckon that will happen? Nope.

[Kelvin R]

So if I understand this thread correctly Joyce is operating outside of the mandate of the QF board and should work for free? Is that correct?

The board is responsible for paying the cartel fines and for developing the culture that enabled that behaviour to develop, the board is responsible for the fleet mix, the board is responsible for where the 787 will go, the board is responsible for Jetstar Pacific and the board is responsible for setting executive renumeration. The board was also responsible for hiring Joyce and for the premium Asian airline strategy. Joyce's role is to present and execute on the board approved strategy.

To try and blame Joyce for this shows a comprehensive lack of understanding on how public companies are run and if Qantas was really run as you have described Gary B then ASIC would be very interested as it would be a wholesale failure of corporate governance and the shareholders who elect the board would only have themselves to blame.

Personally while I don't agree with many of the current directions of Qantas I have to admire Joyce for his ability to continue to execute on the direction of the board in the face of ongoing personal attacks (even taking 2 weeks of work to deal with aggressive prostate cancer). I think a lesser man would have forfeited quite some time ago. The fact that he is still there despite all of this shows a man of great depth in character which reflects the Australian spirit of old rather than the complaining, entitlement spirit of new. For that alone I think he earned every cent this year.

[Andrew Johnson]

No one is worth $5M & no pilot is worth $0.5M.

No wonder QF is stuffed.

It will all be JQ soon.

[Chris Z]

No pilot worth $0.5M? Maybe not.... So tell us how much is he/she worth when ya strapped to your seat when everything is going to s#*t and one of the donks are on fire or whatever the problem and they eventually get you on the ground safely?

Last time I checked, CEOs don't get put through 3 to 5 vigorous checks a year to keep their job either.

[Will H]

Gary, folks need to move past the 777. The A380s were ordered for high capacity and slot-restricted routes where the 777 would be too little. About secondary European routes etc. Qantas doesn't have the network pull EK, SQ, CX etc. have. For Asian services, the A330s do the trick.

As for the 787s (which could be seen as more efficient 777s), they are needed first in competitive markets where their technical advantages will matter. Sorry to all the corporate CityFlyers, but your corporate contracts will still have you on Qantas, 767 or 787. You may not like it, but share price isn't reflective of passenger comfort; it's reflective of market value, and having 787s first open new routes and replace older aircraft on long sectors creates value.

[Gary B]

Firstly, Joyce IS a member of the Qantas Board. Secondly, I agree that the board has made serious mistakes regarding the direction of Qantas International. This is why over 1,000 shareholders have voted up a motion to spill both Joyce and the rest of the Board in October!

Secondly, the Long haul Pilots have offered to fly the CAO 48 exemption like shorthaul Pilots. This is a productivity increase of 11.11%. The offer has been rejected. Is there is another agenda?

The reason Jetstar haven't used the A-330-200 to fly to Rome & Athens is that the previous Board(without consultation with flight ops) ordered aircraft that only have 20 minutes supply of oxygen for passengers in case of rapid depressurisation. Insufficient for crossing areas like the Himalayas. Another wise decision?

Having flown the A-330 in a former life for 2 Airlines (6,000 hours as Captain), I know it's limitations. KLAX-NZAA is very payload limited, even with the low pax config QF have for the A-330-200 (international config). For sectors longer than 10 hours, the B-777-300ER is without peer. If QF had ordered the A-350-900 like CX then they could have been forgiven.
Rather than using BA from Bangkok & Hong Kong to London, QF should be buying wide body fuel efficient twins (not A-320's for a risky venture in to Asia) to fly those routes plus Paris, Rome, Athens, Frankfurt, Beijing, Shanghai, San Francisco. The B777-200LR would be ideal for SYD-DFW and even PER-LHR, but wait, that would mean expansion, not contraction!

The B-787 is not much larger than the B-767, so there is a gap in the fleet for a 350 seat aircraft. EK, SQ ,BA & CX (and Virgin Aust) have all selected the 777, I think they have got it right!

The previous board authorised Dixon's huge severence pay and the remuneration committee led by Strong has authorised these shares for Joyce. Maybe the shareholders will have had enough of this and reject this obscene figure at a time when no dividends are being paid and 1,000 employees (with more to come) are being made redundant. This 1,000 is linked to 4 747's being sold but the 5 year plan only has 9 747's in the fleet. More redundancies to be announced.

[Ash W]

As Will mentioned Qantas does not have the passenger base to justify many of the European routes it has served in the past, coupled with the fact that these ports would be double hops from Australia. The likes of SQ, TG, EK etc more or less have the European market sewn up because A) they better access to the passenger numbers to justify the flights and are better placed geographicly. So no aircraft, 777, A350 or 787 makes sense for Qantas to serve these routes.

The growth area's weather we like it or not are China and India, so makes sense to be putting money into these area's. Ineed grow these area's then it may be possible that Qantas will have access to the passenger base to justify flying towards Europe, but not at present.

As for Joyces pay, again everyone seems to be ignoring the fact he has taken a 10% cash pay cut and to get the "massive" package performance targets need to be met.