71 per cent, $2m pay hike for Qantas boss

Release date: 8/09/2011

The dark arts of accounting standards have awarded Qantas chief executive Alan Joyce a pay rise and a pay cut in the same year.

Steve Creedy, The Australian

Mr Joyce's "reported" 2010-11 package rose 71 per cent to $5.01 million, but his "vested" remuneration what Qantas says he was actually paid fell 9 per cent to $3.04m.

The figure included a fixed salary of $2.05m, which was up from $1.96m.

The airline said the $5m figure was what it was required to report under accounting standards that call for some items to be costed, even though the value was not realised.

This included, for example, shares awarded but not vested.

It said the vested remuneration included fixed pay, cash bonuses paid and the value of shares and rights vested during the year.

"Mr Joyce's salary is not excessive compared with other large Australian companies," a Qantas spokesman said. "His actual salary in 2010-11 was 9 per cent lower than last year and Qantas executives have not been awarded a cash bonus for the past two years."

The new dual-presentation of executive packages comes in a year when the airline's share price has fallen and it failed to declare a dividend. It is also less than a month since it announced it would axe 1000 jobs as part of a restructure of its international network.

Union officials immediately latched on to bigger increase to claim management was rubbing salt in the wound.

"It's hypocrisy of the first order for management to give themselves substantial pay rises when they're about to sack 1000 Australian workers and offshore the airline to avoid Australian workplace laws and salaries," the vice-president of the Australian and International Pilots Association, Richard Woodward, said.

The vested remuneration of other executives at the airline also fell while the reported figure increased.

Jetstar chief executive Bruce Buchanan's reported package rose from $1.11m to $1.41m but his vested paypacket dropped from $920,000 to $905,000.

Chief financial officer Gareth Evans, appointed last year, was reportedly paid $1.36m but pocketed a vested $1.02m.

The exception was Qantas operations group executive Lyell Strambi, whose vested package rose from $981,000 in 2009-10 to $1.26m ($1.69m reported) last year due to the realised value of shares.

Remuneration committee chairman James Strong, whose director's pay rose from $231,000 to $287,000, said supplementary vested information had been included because of "potential confusion in interpreting remuneration table values".

Mr Strong said a 46 per cent increase in underlying pre-tax profit was achieved despite challenges, such as natural disasters and weather, beyond the airline's control.

The year's "company performance has been good relative to the challenges faced and . . . a strong performance by management has produced what is, in the circumstances, a satisfactory profit outcome", Mr Strong said.

Click here to read the story on The Australian website

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