Australia’s Qantas lashed by shareholders after turbulent year

By Byron Kaye

(Reuters) -Shareholders of Australia’s Qantas Airways voted overwhelmingly to reject the airline’s executive pay plans at its annual meeting on Friday, a final show of frustration after one of the company’s most reputationally damaging years.

More than four-fifths of the votes in a resolution to adopt the remuneration report came in against it, according to tally of proxies shown at the meeting, easily surpassing the 25% needed. It was the first time the high-profile company has received a so-called strike.

The vote has no immediate consequences, but if repeated a second year, under Australian law it gives shareholders the right to hold another vote on whether to remove the board.

“This is obviously a very clear message from shareholders,” Chairman Richard Goyder told the meeting in Melbourne after two and a half hours of shareholder questions about customer service and workplace controversies at the airline.

Jacqueline Hey, chair of Qantas’ remuneration committee, added: “We hear your feedback and understand your frustration; we’ve taken some actions already and we are working to implement further changes to restore your trust”.

Among those actions were changes in the bonus structure to increase the weighting of customer experience, Hey said.

Long one of Australia’s most respected brands, Qantas saw its CEO retire early and Goyder quit, effective 2024, after the competition regulator sued the airline in August over selling tickets to thousands of already-cancelled flights after borders reopened in 2022. Qantas is defending the lawsuit.

The High Court also found Qantas sacked 1,700 ground staff illegally in 2020 to prevent industrial organising, while the company was collecting hundreds of millions of dollars of pandemic subsidies. Qantas’ penalty has not yet been determined in court.

Those controversies dominated shareholder questions at the meeting, where Goyder and new CEO Vanessa Hudson repeated apologies for customer service shortcomings, which they blamed on wider disruptions in the global aviation industry.

When one shareholder asked about the timing of former CEO Joyce’s sale of most of his Qantas shares in June, two months before the competition regulator filed its lawsuit, Goyder ordered his microphone turned off.

But the carrier’s new CEO and four board members survived shareholder votes. Advertising veteran Todd Sampson, who some shareholder groups said they were voting against for failing to arrest the reputational damage, was re-elected to the board despite 34% of shareholders voting against him.

“The eye-watering 83% vote against the remuneration report delivers a huge first strike,” said Brynn O’Brien, executive director at the Australasian Centre for Corporate Responsibility. “The Qantas board was too slow to read the room, and failed to satiate investor concerns despite the departure of the company’s CEO, three directors, and Mr Goyder’s belated decision to vacate his chairmanship”.

(Reporting by Byron Kaye in Sydney and Archishma Iyer in BengaluruEditing by Shri Navaratnam and Gerry Doyle)