Current Union Activity - Tide of support turned against them?

[oz_mark]

Qantas is one of the most profitable airlines in the world, but it doesn't seem to equate to job security - just higher CEO pay.

The ex-TAA part of Qantas is profitable (essentially Qantas domestic)
The Jetstar part of Qantas is profitable
The old Qantas that was just QFi is not.

Interesting really

Is that the Qantas employee from Wellington, or the Qantas employee from London, or the Qantas employee from South East Asia?

Speaking of which - why don't Qantas outsource the board and CEO? Be able to get a much better deal if they recruited them from Mumbai.

I've had these thoughts as well.

 

[dfcatch]

Qantas is one of the most profitable airlines in the world, but it doesn't seem to equate to job security - just higher CEO pay.



Is that the Qantas employee from Wellington, or the Qantas employee from London, or the Qantas employee from South East Asia?

Speaking of which - why don't Qantas outsource the board and CEO? Be able to get a much better deal if they recruited them from Mumbai.

Quite honestly Moody, the Jetconnect pilots seem happy - else they would work somewhere else.

The Jetstar pilots seem happy - or else they would work somewhere else.

The London based cabin crew seem happy - else they would work somewhere else.

At the end of the day - of course we'd all love more money.

We'd all love to be paid the same rate as the highest paid equivalents at the highest paid airline.

Personally - if I was a QF employee, being paid more than NZ, London or JQ based employees - I'd be shutting my mouth, taking the offer on the table, recognising that I'm on a good wicket - and I'd lock it in without rocking the boat.

The irony of all of this is really really simple......

The more the unions push (and worse - the more they get), the more QF will cut costs, and that means more layoffs (ie. LESS job security).

The money doesn't grow on trees - and it doesn't matter how much profit there is or isn't, how much the workers get or don't get - we'll still be complaining about the CEO's salary.

Your argument is typical of those who have no understanding of basic economics.

1/ You need employers, to have employees

2/ The more profitable the company, the more capacity to employ more workers.

3/ The more profit in the bucket, the more there is for pay increases.

4/ Yes - you can complain that someone else gets a bigger slice of the pie than you..... But if the pie itself grows, then so does your piece.

5/ The more cost you chew up by forcing pay increases for existing employees - the less there is for new employees. Therefore - less workers get hired.

 

[tedly03]

Sorry mate - but a company's responsibility (a private company no less) is to maximise profits for its owners - the shareholders.

And the best job security for a worker - is a profitable company.

If the company struggles - more lay offs - it's as simple as that.

This isn't the public service.

Oh - and as far as your comment about lower fares.

Here's how it works -

1/ Lower fares means I buy my fare from Qantas - which supports the Qantas employee

or

2/ Higher fares mean I buy my fare from another airline - perhaps Singapore, or United, and the Qantas employee misses out.

Nah! You got it wrong. QANTAS is a public company controlled by a minority of shareholders. Remember when QANTAS shares where around $7, not so long ago, and they were regarded as a good investment for those who were after a good dividend return. So! What has happened since then. Share price at its lowest, dividend suspension. Glad we got rid of our shares a before the price hit the doldrums.

Agree that a profitable company is the best for its workers. However, a company has to look after its employees to ensure its profitability and it appears to me that in the last few years QANTAS had not been doing that. Management, it would appear, is attempting to downgrade QANTAS to the extent that it is ripe for a takeover or to be relocated out of Australia.

My comment about lower prices was to do with those who were making the comment that QANTAS prices would now fall in relation to other airlines as it tried to re-establish its market share. It appeared to me that these people were stating that they would benefit and it did not matter what happened to QANTAS employees.

Do not forget that other airlines who operate in Australia also employ Australians. Look at the fall in market share that QANTAS has had in the last 10 years. Australians are voting with their feet, or their seat, and flying internationally with other airlines. When comparing ticket prices, as we have done in the last few weeks, QANTAS is competitive with other airlines, so why are Australians not supporting the airline as in the past. It would appear to me that it is to do with perception of the company and its operation. Flying internationally in the past we have always flown QANTAS. Why are we looking at other airlines - perception perhaps, choice of cities to fly into and out of certainly, not price.

 

[dfcatch]

Nah! You got it wrong. QANTAS is a public company controlled by a minority of shareholders. Remember when QANTAS shares where around $7, not so long ago, and they were regarded as a good investment for those who were after a good dividend return. So! What has happened since then. Share price at its lowest, dividend suspension. Glad we got rid of our shares a before the price hit the doldrums.

Agree that a profitable company is the best for its workers. However, a company has to look after its employees to ensure its profitability and it appears to me that in the last few years QANTAS had not been doing that. Management, it would appear, is attempting to downgrade QANTAS to the extent that it is ripe for a takeover or to be relocated out of Australia.

My comment about lower prices was to do with those who were making the comment that QANTAS prices would now fall in relation to other airlines as it tried to re-establish its market share. It appeared to me that these people were stating that they would benefit and it did not matter what happened to QANTAS employees.

Do not forget that other airlines who operate in Australia also employ Australians. Look at the fall in market share that QANTAS has had in the last 10 years. Australians are voting with their feet, or their seat, and flying internationally with other airlines. When comparing ticket prices, as we have done in the last few weeks, QANTAS is competitive with other airlines, so why are Australians not supporting the airline as in the past. It would appear to me that it is to do with perception of the company and its operation. Flying internationally in the past we have always flown QANTAS. Why are we looking at other airlines - perception perhaps, choice of cities to fly into and out of certainly, not price.

Fair points.

I was referring to Qantas being a private company as opposed to government entity.

But yes - it is publicly traded.

When you refer to prices - are you talking about fares, or share price?

I'm confused at your argument.

 

[tedly03]

Fair points.

I was referring to Qantas being a private company as opposed to government entity.

But yes - it is publicly traded.

When you refer to prices - are you talking about fares, or share price?

I'm confused at your argument.

The last line when was refering to the price of fares.

 

[Moopere]

so why are Australians not supporting the airline as in the past. It would appear to me that it is to do with perception of the company and its operation. Flying internationally in the past we have always flown QANTAS. Why are we looking at other airlines - perception perhaps, choice of cities to fly into and out of certainly, not price.

Because QF is regularly in the top third of most expensive airlines to fly. Have a look at the few international routes that are left (and not JQ'd) after Christmas when things have settled again. Looking right now will show you only QF trying to maintain customer base after a nasty shock.

Now, of course, nothing wrong with being in the top third, or even to be _the_ most expensive airline there is, but you have to deliver a commensurately high level of service.... this subject has been well covered in another recent thread.

As we've been fond of late in using observed principles in our language I'll invoke occams razor. We could indeed make up a million theories about why passengers are fleeing QF fares, but the truth of it is probably much simpler, for the product offered, there are more economical fares available from competitors. It may not be that of course, it may indeed be the case that Aussies as a collective hate the QF board so much that we won't support the company.

 

[Moopere]

My comment about lower prices was to do with those who were making the comment that QANTAS prices would now fall in relation to other airlines as it tried to re-establish its market share. It appeared to me that these people were stating that they would benefit and it did not matter what happened to QANTAS employees.

Oh, and that would be me.

So, if I wanted to care about what happened to QF employees I should _not_ buy a QF fare? Surely that is not what is being suggested?

If QF hand out significant discounts between now and Christmas I'll sure as heck be supporting the company .... and the employees by default.

 

[Matt_kal]

By the union logic anyone servicing a QANTAS plane overseas should be paid the equivalent of the Australian award to remove the benefit of exporting these activities.

By that logic shouldn't Australians servicing overseas airlines receive the same award as the base country or refuse to service any of these foreign planes as they are stealing the jobs of their colleagues overseas?

 

[muppet]

I

For those not familiar with at-risk in the context of salary packages, this means that receipt of a designated amount of the salary is entirely dependant on achieving specific, measurable goals for corporate performance. Think of it as the executive version of commission based pay.

Joyce's salary package for FY2010/11 is set at AUD 6.02m, of which AUD 2.04m is cash salary. Frankly, on the basis of the work he has done to date trying to strengthen the business and diversify to improve revenue, he's earned every cent.

Hi thewinchester.

I'm not familiar with remuneration strategies or best practice, nor was I able to put a dollar amount at which Joyce's 'at risk' options vest.

And I can tell you know a lot about this. However, I will say that I think you're out of touch with the real world. I don't know how much you earn, but to me, the suggestion that someone earning $2m a year has ANYTHING 'at risk' is a little absurd.

The average wage is something like $68k, the median something much lower. Meaning Joyce "earns" about the median annual wage each week.

m

 

[muppet]

Sorry mate - but a company's responsibility (a private company no less) is to maximise profits for its owners - the shareholders.

.

How's that working out for the shareholders?

 

[munitalP]

I wish people would stop bringing A J's F'ing salary into the argument. Its what he gets, and it was agreed by a board of directors who are/were some of Australias top businessmen and leaders.

Get overt and focus on the real problems.

For what it's worth, AJ is in little league when it comes to salaries.

[COLOR=#333333][FONT=Arial]The 10 highest paid CEOs for 2007, with total earnings, are:[/FONT][/COLOR][LIST=1]
[*][B]Rupert Murdoch[/B], Newscorp, $US37.92 million
[*][B]Allan Moss[/B], Macquarie, $33.92 million
[*][B]Phil Green[/B], Babcock & Brown Infrastructure, $17.03 million
[*][B]Greg Gailey[/B], Zinifex, $16.7 million
[*][B]Frank Lowy[/B], Westfield, $14.39 million
[*][B]Wal King[/B], Leighton Holdings, $13.88 million
[*][B]Paul Little[/B], Toll Holdings, $13.43 million
[*][B]David Turner[/B], Brambles, $US11.01 million
[*][B]Greg Clarke[/B], Lend Lease, $12.28 million
[*][B]Sol Trujillo[/B], Telstra, $11.78 million
[/LIST]

And that was 2007!!!

 

[markis10]

I wish people would stop bringing A J's F'ing salary into the argument. Its what he gets, and it was agreed by a board of directors who are/were some of Australias top businessmen and leaders.

Get overt and focus on the real problems.

For what it's worth, AJ is in little league when it comes to salaries.

[COLOR=#333333][FONT=Arial]The 10 highest paid CEOs for 2007, with total earnings, are:[/FONT][/COLOR]
[LIST=1]
[*][B]Rupert Murdoch[/B], Newscorp, $US37.92 million
[*][B]Allan Moss[/B], Macquarie, $33.92 million
[*][B]Phil Green[/B], Babcock & Brown Infrastructure, $17.03 million
[*][B]Greg Gailey[/B], Zinifex, $16.7 million
[*][B]Frank Lowy[/B], Westfield, $14.39 million
[*][B]Wal King[/B], Leighton Holdings, $13.88 million
[*][B]Paul Little[/B], Toll Holdings, $13.43 million
[*][B]David Turner[/B], Brambles, $US11.01 million
[*][B]Greg Clarke[/B], Lend Lease, $12.28 million
[*][B]Sol Trujillo[/B], Telstra, $11.78 million
[/LIST]

And that was 2007!!!

Have you changed jobs and gone to work for SMH????

Alan Joyce, the CEO of Qantas, which has a near-monopoly over air travel in Australia, has hit the headlines with his $5 million pay packet. But he is far from the highest paid CEO in Australia.
Top of the list for 2010 was the outgoing Commonwealth Bank boss Ralph Norris, on $16.2 million. ANZ's Mike Smith also makes the top 10, as does Westpac's Gail Kelly on $9.6 million and Macquarie Group's Nick Moore (an unfortunate name) on $9.6 million. In fact, of the 10 largest companies in Australia, eight also have CEOs in the top 10 of highest paid executives.

Read more: Top bosses' riches are undeserved
​

 

[muppet]

Have you changed jobs and gone to work for SMH????

Alan Joyce, the CEO of Qantas, which has a near-monopoly over air travel in Australia, has hit the headlines with his $5 million pay packet. But he is far from the highest paid CEO in Australia.
Top of the list for 2010 was the outgoing Commonwealth Bank boss Ralph Norris, on $16.2 million. ANZ's Mike Smith also makes the top 10, as does Westpac's Gail Kelly on $9.6 million and Macquarie Group's Nick Moore (an unfortunate name) on $9.6 million. In fact, of the 10 largest companies in Australia, eight also have CEOs in the top 10 of highest paid executives.

Read more: Top bosses' riches are undeserved
​

Qantas is also far from the top of the ASX in terms of yield, market cap and forecast growth.

 

[dfcatch]

How's that working out for the shareholders?

Even more reason to knock back the unions' claims.

 

[medhead]

Hi thewinchester.

I'm not familiar with remuneration strategies or best practice, nor was I able to put a dollar amount at which Joyce's 'at risk' options vest.

m

I thought about commenting on this; when I've looked into this for other CEOs before voting on the remuneration report etc. invariably 80% (or similar) of the at risk component vests if they perform above the median. So the company has to be the 51% best performer for the CEO to get most of his bonus. I'm constantly underwhelmed by this level of "at risk".


Sent from my iPhone using Aust Freq Fly app so please excuse the lack of links.

 

[UP4014]

If CEO's pay was less and they relied on dividend payments as half their income I'm sure it would focus the mind better.

 

[Moody]

If CEO's pay was less and they relied on dividend payments as half their income I'm sure it would focus the mind better.

Or maybe if one of the KPIs was staff satisfaction? Other companies (mine included) regularly canvas their staff to make sure they are satisfied with all parts of their working life. Unhappy staff are not very productive.

 

[ethernet]

Public tide of support matters less.
Government support matters more, and I gather they are pissed and red faced with other priorities, and read one comment saying FWA may have rejected the approach. I wonder. Others think WTF .
Anyway a few Judges may have to arbitrate - under pressure - about 15 December. Conditions are not going to change radically, not enough for the board to announce all pigs flying, and may even have the foresight to announce no management initiated groundings over the silly season. Back to square 1 , and you have blown 100 million that could have gone to keep the staff happier. Any half baked caper to get around Sale Of QF Act will also get, ground most of QFi, methinks a hot reception.

Too bad relations have been poisoned, but tantrums are not effective against most parents.

 

[thewinchester]

I'm not familiar with remuneration strategies or best practice, nor was I able to put a dollar amount at which Joyce's 'at risk' options vest.

And I can tell you know a lot about this. However, I will say that I think you're out of touch with the real world. I don't know how much you earn, but to me, the suggestion that someone earning $2m a year has ANYTHING 'at risk' is a little absurd.

The average wage is something like $68k, the median something much lower. Meaning Joyce "earns" about the median annual wage each week.

I thought about commenting on this; when I've looked into this for other CEOs before voting on the remuneration report etc. invariably 80% (or similar) of the at risk component vests if they perform above the median. So the company has to be the 51% best performer for the CEO to get most of his bonus. I'm constantly underwhelmed by this level of "at risk".

I think munitalP's point regarding his salary in comparison to other Australian big company CEO's put most of this to bed.

However, there is another aspect of risk being CEO - and that is their reputation.

Let's pose a Geoffrey Robertson hypothetical

Imagine for a second if you will that Alan Joyce's moves don't work out as planned, and things, especially for QF INT, get even worse. (And I know for some of you, that isn't much of a leap).

Now regardless of what Joyce is paid, his contract or his payout, he still has to get another job, pay for his retirement, look after his domestic partner, and of course pay the day to day bills.

If this scenario was to occur, and given the level of distaste some feral elements of the population for him - how likely is it that he will get another job in the Airline industry, at home or abroad?

The fact of the matter is that taking a job at the airline of a national flag carrier is a great risk, and if the risk goes wrong he's left out of a job. And heaven help him if he isn't a good financial planner or hasn't setup a rainy day fun.

He has the same life pressures, he still has to buy groceries, pay the mortgage and utility bills, and heaven help him should he have a relationship breakup and end up paying alimony. Then of course someone with his assets and income wouldn't qualify for any form of federal unemployment support, and would need to pay for airfares should any overseas airline should they want to interview him for a role.

Now some will moan and whine about the size of his pay packet, but Alan has to be as invested as anyone else in the workforce in his role.

And as a consequence of the risk and investment he makes, combined with the hard work required to do the job, the board devises, and shareholders approve his remuneration accordingly.

So we can sit here and lambaste Joyce till the cows come home. He's got his salary, and it's not going to change for the next 12 months.

We can also harp on about the fact his annual pay deal was approved the day before the airline took the unprecedented step of grounding the mainline operation and locking out 20% of the workforce. This is just co-incidence and possibly poor timing on the board's part, despite what unions or conspiracy theorists might want you to believe.

Let's also not forget that the content of Joyce's pay deal was finalised at least 31 days before the lockout. Even if they started planning for a potential shutdown 14 days before the annual report, the documents had already been sent to shareholders, meeting halls booked, suppliers arranged; plus there would have been public embarrassment if they had cancelled the AGM because they planned for a course of action to bring their problems to a head. And that's before we talk about all the extra costs they'd incur from rescheduling and the questions corporate regulator ASIC would have as to why they did.

And of course let's not forget, any good company conducts good risk management and planning. Of course they pre-booked hotel rooms, it was to prepare for the eventuality of a grounding. Of course they put people in place at international ports around the globe to support and explain the action to staff, it's called preparing for eventualities.

I've heard so much back and forth in this thread, and some of it is utter rot. More of it is from those who don't understand the reality of business. And the rest, well I assign it to a loony bin and not worth the oxygen to address.

But let's get one thing straight - all the arguments and theories put forward by the unions, media and public in reality don't hold water. These are distractions from the main game - and the sooner Qantas starts fighting all of this with the blatantly obvious facts and timelines, the quicker the focus can get back onto resolving the dispute and having the unions make a fair deal with doesn't restrict a business conducting lawful activity.

 

[medhead]

Sorry the"gun" I'm not lambasting Joyce per se. I'm lambasting a system that rewards performance in the top 50% percentile. That is an absolute joke. In the context of the thread that joke is worth remembering when defending Joyce's salary because a big chunk of it is performance related. But that's not an attack on Joyce, that is a failure of the system.