Alan Joyce, CEO of Australian carrier Qantas, has been criticised for increasing his salary over the past year, in a difficult context for the company following delays and cancellations of part of its operations, as well as other events that affected its reputation.
Qantas documents show that the executive received a 287.000 dollars raise last year, according to The Guardian. Like other senior executives, he received no cash bonuses, raising his base salary to 2.1 million dollars. His annual remuneration now stands at 5.5 million.
Remuneration questioned after service problems
The controversy arose after customers of Jetstar Airways, the airline’s low-cost subsidiary, were affected by flight cancellations in Bali during the first week of September. Around four thousand passengers had their travel plans disrupted after eight flights each way between Australia and Denpasar-Ngurah Rai International Airport (DPS), one of Indonesia’s main air terminals, were suspended. The situation added to the list of problems experienced by many customers in recent times.
Like much of the industry, Australia’s largest airline was hit by staff shortages and rising operating costs after demand for air travel increased sharply as a result of the widespread lifting of health restrictions.
“Over the past few months, many of you have experienced flight delays, cancellations or lost bags”, the airline’s CEO had said earlier. “There are good reasons for this, but when it comes to what you should expect from Qantas, it is not good enough”, he explained. “On behalf of the national airline, I would like to apologise”, he concluded.
In that context, however, the revelation of Joyce’s pay package has led to negative views among many customers. The total value of his salary package increased from 5.288.000 in 2021 to 5.575.000 dollars this year. This brought him back to the same amount he received before the pandemic, after voluntarily taking a cut over the past two years.
His critics argue that he enriched himself while depriving the company of capital that could have been invested in renewing the fleet, improving staff conditions and optimising customer services.
Readjustment of salary packages
The company’s filing with the Australian Securities Exchange details that the Qantas board decided to realign the salary packages of Joyce and other senior executives so that short-term bonuses better reflect the airline’s current reputation.
Jacqueline Hey, head of the body’s remuneration committee, said the airline needs to “do more” in order to deliver the service its customers expect. She said the new bonus scheme would “prioritise a combination of key operational measures, such as punctuality and airline reliability” and focus on “customer satisfaction, reputation and trust in Qantas”.
In addition to receiving no short-term bonus this year, Joyce also received no shares under the company’s long-term incentive plan, although his entitlements under this arrangement remain in place.
Under the scheme, he would have been entitled to around one million Qantas shares, with an estimated value of around 5.25 million accrued this year (at current values) and under previous bonus schemes, dating back to 2018. However, the CEO “offered, and the board accepted, to defer the decision until at least August 2023”, the company said in its annual report.
The Australian Competition and Consumer Commission (ACCC) reported last week that it was investigating the company’s policies on refunds and flight credits following complaints from customers affected by delays and rescheduling.
See also: Qantas claims it is not a monopolist, but the government doesn’t seem to agree
