Qantas boss delays decision on 37 million COVID-19 bonus

Qantas boss Alan Joyce will wait for at least a year to decide whether he will accept $3.7 million worth of performance bonuses awarded to him during the biggest crisis in the airline’s 100-year history.

The carrier revealed on Friday that while its top executives’ pay fell by almost 70 per cent compared to pre-pandemic levels in the 2021 financial year, it still awarded them half their available long-term bonuses.

Qantas chief executive Alan Joyce.Credit:

Despite running at a $1.7 billion loss last year, Qantas awarded the bonuses â€" shares worth $1.5 million â€" because the company’s share price outperformed that of most other global airlines in the pandemic-devastated aviation industry last year, the company’s annual report says.

Mr Joyce â€" Australia’s highest paid executive in 2017 â€" received a base salary of $2 million, an increase of $250,00 from 2020, and was entitled to 325,500 shares as a bonus which would be worth $1.8 million based on Friday’s share price.

However, he and Qantas’ board agreed to “defer the decision” on whether to accept or forfeit those shares until at least August 2022. Qantas and Mr Joyce also deferred acceptance of his 2020 long-term bonus, with a decision on those 343,500 shares now pushed back until at least next year.

That means the 55-year-old will have a backlog of 669,000 shares â€" worth $3.7 million at their current trading price, and more if the stock continues to rise as the company recovers from the COVID-19 pandemic â€" to decide whether to accept or decline.

Leading investor proxy firm ISS criticised Qantas last year for still paying executive bonuses, even as it ran up billions in losses, its share price collapsed, it laid off 8500 employees, and stood down thousands more without pay while accepting more than $500 million in government handouts. Qantas did not award short-term bonuses to any of its executives in 2020 nor 2021.

Mr Joyce’s pay has been a source of controversy and fascination since he took home an eye-watering $24 million in 2017, driven by the sky-rocketing value of Qantas shares included in his remuneration.

His take-home pay for the 2021 financial year (excluding potential long-term bonuses) was $1.98 million â€" down from $10 million in 2019 but up from last year’s $1.74 million. The increase was because Mr Joyce took zero pay for three months in 2020 but for only one month in 2021, plus three months on reduced pay.

Qantas’ domestic and international CEO Andrew David and Jetstar boss Gareth Evans both made $1.4 million in 2021; chief financial officer Vanessa Hudson made $1.25 million and loyalty boss Olivia Wirth took home $1.25 million. Departed International department CEO Tino La Spina received $1.5 million.

Total pay across the company’s top five executives was $7.3 million, up from $5.8 million in 2020 but down from $22 million in 2019.

Qantas’ annual report says that given the sharp fall in its executive pay since the outbreak of the pandemic, it was looking to overhaul its executive pay structure for the current financial year to stop them being poached by other companies.

“Our executive cohorts are talented and in increasing demand across a range of industries, many of which, unlike aviation and tourism, are experiencing high rates of growth and activity, with financial rewards to match,” Qantas’ remuneration committee chair Paul Rayner wrote.

“The board is particularly concerned that a continued loss of capability and experience will materially inhibit the group’s ability to deliver the key outcomes required for success beyond the pandemic.”

Releasing the annual report on Friday, Qantas chairman Richard Goyder â€" who was paid $560,000 last year â€" flagged that Qantas would look at ways to pay a bonus to all employees who stay with the company through its pandemic recovery.

“The board is very conscious of the financial impact that this crisis is having on people across the group,” he said. “Just as we all lean in to get through hard times, we have a track record of sharing the benefits of strong financial performance.”

Qantas ran at a $1.7 billion statutory after-tax loss last year and a $1.9 billion loss in 2020.

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