The former chief executive of Qantas has had his exit package cut after a review found mistakes made by the board and senior management contributed to “significant reputational and customer service issues”.
While there were no findings of deliberate wrongdoing, the review covering 12 months to October 2023 scrutinised the decision-making and governance processes of the board “that led to the loss of trust amongst stakeholders”.
The airline said: “The events that damaged Qantas and its reputation and caused considerable harm to relationships with customers, employees and other stakeholders were due to a number of factors.
“While there were no findings of deliberate wrongdoing, the review found that mistakes were made by the board and management which contributed to the group’s significant reputational and customer service issues.”
The airline’s board said it had determined that former chief executive Alan Joyce (pictured, right) will have the amount he was due to receive after leaving last year cut by A$9.26 million.
Additionally, shares valued at $8.26 million under a 2022-23 long-term incentive will be forfeited.
Current and former senior executives will also see their short-term incentives reduced by 33%.
Qantas added: “In September last year, the board announced there would be a 20% reduction in short term incentives for FY23 for members of the group management committee given the challenges then facing Qantas and in recognition of the customer and brand impact of cumulative events.
“The board also withheld the delivery of the balance of the FY23 short term incentive for senior executives given the initiation of the Australian Competition and Consumer Commission (ACCC) proceedings and the High Court finding in relation to breaches of the Fair Work Act when Qantas outsourced ground handling work.
“As part of a settlement with the ACCC, Qantas has admitted to misleading customers in relation to flight cancellations processes and subject to Federal Court approval will pay a A$100 million penalty.
“Qantas has also agreed to a A$20 million customer remediation program.
“Penalties and compensation arising from breaches of the Fair Work Act are still to be determined.”
Joyce was chief executive for 15 years and steered Qantas through the 2008 global financial crisis, the pandemic and record fuel prices.
He stepped down last year to be succeeded by former chief financial officer Vanessa Hudson as the first woman to lead the airline.
Joyce had been due to retire in November 2023 but stepped down two months earlier than planned.
Qantas said: “In reaching these decisions, the board has considered the individual and collective accountability of members of the group management committee.
“The board has also taken into account their performance in bringing Qantas through the pandemic and the challenges of standing up the airline through that period.
“The combination of these factors is reflected in the reduction in the short term incentives.
“Mr Joyce was the chief executive officer of the Qantas Group. In this role he had overall accountability and responsibility for the outcomes of the business and this is reflected in the forfeiting of his 2021-2023 LTIP [Long Term Incentive Plan] shares that vested in August 2023.
“Current non-executive directors who were on the board at the time will take a 33% reduction to their directors’ base fees this year.”
Chairman elect John Mullen, who joined in April, said: “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.
“As the national carrier it is our duty to make sure we always act in the best interest of stakeholders and hold ourselves to the highest level of accountability.
“Vanessa and her new management team have made positive progress towards delivering better outcomes for customers and employees, but there is still a significant amount of work to be done to rebuild the trust of all stakeholders.
“The implementation of the recommendations in the report will result in stronger governance and better decision-making within Qantas and ultimately better outcomes for our stakeholders.”