Qantas’ multimillion dollar bonuses hit turbulence ahead of AGM

Qantas shareholders have been told to reject a bonus scheme set to deliver a multimillion dollar payment to CEO Alan Joyce as part of a plan to retain the services of its senior executives.

ISS, one of Australia’s most prominent proxy advisers, accused the airline of setting performance targets that are not “sufficiently challenging” and criticised the fact that Qantas plans to repudiate any vote by investors against the resolution.

“Shareholders are being given a false choice because the company intends to make a cash equivalent payment rather than an equity award if shareholder approval is not obtained,” said the ISS report.

ISS took issue with the three performance hurdles set for Joyce for him to receive 698,000 performance rights on shares currently worth more than $4 million. These hurdles include that Qantas reports a profit for the current financial year.

The airline is already on track to meet all three hurdles as Australians have returned to flying in numbers not seen since before the pandemic.

Earlier this month, Qantas shares soared after it forecast a billion-dollar-plus profit for the December half year – six months earlier than expected – despite the burden of higher jet fuel prices and impact of high inflation on consumer spending.

Joyce dismissed suggestions the airline’s growth could inflame tensions with employees and travellers who’ve been subjected to poor service and working conditions, arguing the operational issues experienced earlier this year had wreaked havoc across the entire industry.

“What’s become clear is delivering pre-COVID levels of performance requires more than pre-COVID levels of resources,” Joyce said at the time.

Not everyone is worried about the retention payments. Other proxy advisers have supported the resolution and the remuneration report.