Qantas CEO Bonus Handshake
Alan Joyce, has pocketed an eye-popping $10 million in shares as a reward for achieving COVID-19 recovery goals.
In a tumultuous turn of events, Qantas Airways, Australia’s renowned airline, is grappling with a two-pronged challenge. On one hand, its outgoing CEO, Alan Joyce, has pocketed an eye-popping $10 million in shares as a reward for achieving COVID-19 recovery goals.
Simultaneously, the Australian Competition and Consumer Commission (ACCC) has launched an investigation, alleging Qantas sold tickets to flights that had already been canceled. This article delves into these developments and their implications for both the airline and consumers.
Alan Joyce’s $10 Million Windfall
Qantas recently disclosed that Alan Joyce received 1.7 million Qantas shares, valued at over $10 million, as a reward for meeting critical financial targets. These shares are part of Joyce’s bonuses accumulated from 2020, 2021, and 2022, as well as a separate incentive scheme introduced during the pandemic. This significant bonus payout comes amid increased scrutiny of executive compensation, given the ACCC’s ongoing investigation.
ACCC’s Investigation and Calls for Substantial Penalties
The ACCC, led by Gina Cass-Gottlieb, has not minced words when it comes to Qantas.
The commission alleges that Qantas falsely advertised sales on 8000 flights weeks after they’d been canceled.
Cass-Gottlieb has signaled that the regulator is seeking hefty penalties, stating, “We think the penalties in consumer law cases have not been high enough.” She emphasized the importance of substantial fines to deter not only Qantas but also other corporations if the allegations are proven in court.
The ACCC rarely discusses potential penalties before a court decision, but Cass-Gottlieb’s remarks serve as a stern warning to companies engaging in alleged misconduct.
Qantas’ Shares and Record Profit
Despite the legal turmoil, Qantas made headlines by issuing thousands of shares to incoming CEO Vanessa Hudson and other senior executives. This move followed the airline’s impressive $2.47 billion profit in the last financial year, marking a significant turnaround after three years of COVID-19-related losses.
Scrutiny on Bonuses and Share Price
The relationship between Qantas and the Australian government has come under scrutiny, particularly regarding international flight routes. Calls for a review of decisions regarding flight routes have emerged in light of recent revelations. Meanwhile, Qantas’ share price has experienced a decline, even after reporting a substantial profit. Key investor advisory groups have expressed their intention to closely examine the board’s decisions regarding executive bonuses, considering the ACCC’s case.
The Bigger Picture
As Alan Joyce’s departure in November approaches, questions about executive compensation and corporate accountability remain paramount. If Qantas faces substantial fines for the alleged breaches, it could mark one of the most significant penalties awarded under Australian Consumer Law. Cass-Gottlieb has called for penalties “more than double” the $125 million penalty levied against Volkswagen, signaling a growing trend of increased penalties for corporate misconduct.
ACCC’s Allegations and Consumer Impact
The ACCC alleges that Qantas continued to sell tickets on its website for an extended period, even after the flights had been canceled. This situation affected thousands of passengers who were unaware of the cancellations, leading to potential financial losses and disruptions. The allegations revolve around misleading and deceptive conduct under Australian Consumer Law, focusing on consumer impact rather than intent.
As the ACCC’s investigation unfolds and Qantas navigates these turbulent legal waters, the airline industry, corporate governance, and consumer rights remain in the spotlight. The outcome of this case could set a significant precedent for corporate penalties and consumer protections. OzScamWatchers.com will closely monitor these developments and provide timely updates on this evolving story.