I normally don't engage with 1st time posters, specially as most of them make one post and leave after getting something off their chest. However, I think this is worthy of some response and counterpoint.
Having just watched the AGM webcast and seen James Strong (Chairman, Remuneration Committee) lay this issue out in detail - the assertion that Joyce is getting "such an obscene increase" is without merit.
The claims that he is getting a 71% pay rise are false, completely misrepresent the pay structure of the companies CEO, and re-affirms QF's decision to implement a salary package of which the majority is an at-risk component.
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.
The remaining AUD 3.98m is only payable when Joyce has delivered against the medium and long term targets set as part of his remuneration package, which was voted on and approved at their AGM last year. I wasn't able to discern from the meeting if the allocation of ~1.7m shares (which form part of the Qantas Long Term Incentive Plan - LTIP) is reliant on the meeting of goals and forms part of the AUD 3.98m figure.
Targets set for Joyce to earn that additional AUD 3.98m and the LTIP shares are pretty steep, and include a number of metrics rating QF's performance against the ASX/S&P Top 100, and the basket of globally listed airlines. A bit more info about this can be
found in the notice of meeting for today's AGM (See pg. 4, col 2).
Further, any award of shares to Joyce under the LTIP has to be approved by a vote of shareholders at an AGM. I'd happily wager that if institutional investors weren't happy with the CEO's performance, they'd be doing a lot more than voting done a LTIP motion at an AGM.
Further, let's get back to why the airline hasn't reached agreement with the engineers, ground staff and pilots union. It's because these groups are wanting to impose conditions as part of an industrial relations agreement which enshrine old and redundant work practices, and could reasonably prevent the airline from seeking out lawful opportunities to grow the company which would in turn help deliver the job security they so desperately desire.
And I've already covered the legal issues regarding this in another thread, looking at how such conditions could be a plain text breach of the Competition Act subject to the union meeting the criteria for the activities test which would enable this to be classified as restrictive conduct.
Unions in this country have for at least the last 30yrs been heavily resistant to change. We just have to look at the waterfront disputes during the 90's and the significant work done by the previous Federal Government to break apart the stranglehold of the Building and Construction unions.
I'm all for people getting job security, but what I won't, nor do I expect Qantas to stand for, is allowing these groups to hold it to ransom and acting for themselves rather than the greater good. The unions need to grow up, and realise it's high time for their industrial practices to move on.
