Qantas slashes former boss Joyce’s exit pay

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Australian airline Qantas has cut bonuses due to its former chief executive Alan Joyce by more than A$9.3mn (US$6mn) to reflect damage done to its reputation in the last year of his tenure.

The decision is the outcome of a review launched in 2023 into management actions and the culture at the carrier known as the “Flying Kangaroo”, in a year when its share price crashed as it was found to have sold “ghost flights” and illegally sacked 1,700 workers.

Joyce, who quit last year after 15 years at the helm. was the main target for passenger and investor ire as it was revealed that the Irish executive was due to receive a leaving package of up to A$24mn. That triggered a shareholder rebellion with more than 80 per cent voting against its pay policy at its annual meeting last November.

The review, published on Thursday and conducted by McKinsey partner Tom Saar, found there was “too much deference to a long-tenured CEO” at Qantas and that a “command and control” leadership style under Joyce was a part of the “root cause” that underpinned the crisis that hit the company in 2023. It added that the board was “financially, commercially and strategically oriented” but should have also focused on employees and customers.

As a result of the review’s recommendation, the Qantas board opted to slash Joyce’s short-term and long-term bonuses because of the reputational damage done to the company during the post-pandemic period.

The board cut short-term bonuses paid to top executives by a third — equating to A$4.1mn including nearly A$1mn due to Joyce — to reflect issues at the airline. It also decided that Joyce’s entire long-term incentive bonus — due between 2021 and 2023 but as yet unpaid — of about A$8.4mn, would be forfeited.

Joyce was not immediately available for comment on the decision.

John Mullen, who will replace corporate veteran Richard Goyder as chair of Qantas in September, said the pay adjustments and leadership review would allow the new management team to “restore pride” in the airline.

“It’s important that the board understands what went wrong and learns from the mistakes of the past, as it’s clear that we let Australians down,” Mullen said.

Joyce had repeatedly defended his actions, and potential bonus, pointing to the airline’s rapid financial turnaround after it flew close to collapse during the pandemic.

A decision to sack 1,700 ground and baggage staff during that period was later deemed to be illegal and preceded a customer service meltdown that infuriated passengers. Last year, the corporate regulator sued the airline for selling tickets for flights it had already cancelled. That triggered a 20 per cent drop in its share price and Qantas eventually admitted it had misled customers. It is paying an A$100mn penalty as a result. 

Michael Kaine, national secretary of the Transport Workers’ Union, said there were early signs that Qantas had improved its ways but slammed Joyce over what he called the “destruction of an Australian icon”.

“This review is important because it verifies what workers, passengers and the Australian community have been saying for years: Qantas was a corporate dictatorship with a timorous board incapable of speaking up to Alan Joyce as CEO, who prioritised a toxic ‘profit at all costs’ culture,” Kaine said.

Qantas, now led by Vanessa Hudson, has invested heavily in improving its customer service and reliability. Its position in the lucrative domestic aviation market has been maintained, despite its woes, after low-cost competitor Bonza collapsed and regional airline Rex entered administration this year.