QF CEO package boosted to AU$5 million

[Nam Taf]

Selling them now will crystallise the losses and they can surely only go up from now...

That's a false logic. That's like doubling down on your bet because your luck's due to come up.

CEO pay is excessive in objective terms, but subjectively I think AJ's pay is in line with what other CEOs would get having met similar KPIs. It makes logical sense, but it's certainly not a smart move from the point of view of looking good to the unions and shareholders.

 

[QF029]

But what about us long suffering and loyal QF shareholders who have seen nothing but a PPS decline and no dividends for the 3 AJ years? AJ simple message, look after the QF shareholders and pay us a decent dividend and drive the PPS upward before looking after yourself or I will "reJoyce" when you are removed.

Why loyal? Did you buy them for a reason other than economic?

 

[MikedOut]

I find it a bit offensive, not so much that he's payed at that level plenty of other CEO's are, more that it's at a time when they keep crying poor mouth.

 

[Justchecking]

I agree with the above on the grounds that you should not ask your employees to do what you are unwilling to do. Take a pay cut. On the one hand the group can't afford a CPI increase for it's workforce, but it can find a payrise for it's CEO. Credibility = zero. It's not as if knocking back a bonus will mean his kids can't have Xmas dinner this year.

 

[oz_mark]

Seriously! Do we need to make unqualified statements about anyones salary - or shall we just stoop to the same levels as the Qantas bashing media who fail to point out that it is probably KPI based, a share option and other goodies?

3 words.... TALL POPPY SYNDROME

I agree. Some of the comments seem to show a lack of understanding about how large companies work and how the CEO's are remunerated. I may not agree with CEO remuneration, but is hardly a Qantas specific problem.

The fixed remuneration component of the salary only changed a little. Most of the increase was actually from incentive programs. While I may not agree with some of the direction Qantas is taking, Joyce is clearly executing the strategy that the board have put in place, and has been meeting the performance requirements set to be rewarded for it.

 

[MikedOut]

Off topic I know, OzMark, that last post was, (QF?) 11,747....

 

[DC3]

I agree. Some of the comments seem to show a lack of understanding about how large companies work and how the CEO's are remunerated. I may not agree with CEO remuneration, but is hardly a Qantas specific problem.

The fixed remuneration component of the salary only changed a little. Most of the increase was actually from incentive programs. While I may not agree with some of the direction Qantas is taking, Joyce is clearly executing the strategy that the board have put in place, and has been meeting the performance requirements set to be rewarded for it.

Would someone know where I could view those performance requirements, please?

 

[travelislife]

I agree with the above on the grounds that you should not ask your employees to do what you are unwilling to do. Take a pay cut. On the one hand the group can't afford a CPI increase for it's workforce, but it can find a payrise for it's CEO. Credibility = zero. It's not as if knocking back a bonus will mean his kids can't have Xmas dinner this year.

Great post Justchecking, if you are going to lead from the front you have to do what you are asking all your employees to do, could have been such an easy PR coup for AJ if the headline read "Qantas CEO takes $100,000 paycut inline with Qantas group employees".

One of his KPI's is definitely not staff satisfaction or market share (both passenger numbers and share price!) then are they.

 

[oz_mark]

Would someone know where I could view those performance requirements, please?

I don't think there is much more published that what is contained in the remuneration report in the Annual Report. It does have some detail:

1) The Short Term Incentive Program is primarily based on underlying profit, which did increase 45% during the year.
2) In the 2009/10 year a decision was made not to pay a cash bonus, but to award restricted shares. A side effect was that recognition of that bonus is in 2010/11 rather than 2009/10.

Despite the headline result, the actual realised pay fell 9% during the year.

 

[Simo]

Fully Agree with Oz Mark,

I still can not fathom that he got his KPI's when they said the Int arm is losing money.

In my world if you are losing money you are not making KPI's.

 

[casanovawa]

Unfortunately there are few real leaders around the place, in countries or companies that will walk the talk themselves, its all one rule for them and one rule for the rest... No wonder many "leaders" credibility is lower than the proverbial...

The argument that its what others at similar sized companies get doesn't hold much water for me, you can justify anything in life by saying its ok coz others do it or get it without considering the right or wrong of it... As stated how easy would it have been to "sacrifice" a hundred grand or two (maybe into a staff fund or something) while complaining how tough the market is, cutting the workforce and banging on about how excessive the labour costs are that Qantas face in comparison to Asian competitors... Instead weeks or months later he get a big payrise or share package... If they had any cheek or shame they wouldn't do it but they know there will be no repercussions...

I'm not some closet commie and i know all the arguments about their worth and all and the free market usually works, but still, its like I've heard union bosses say (and not a member of union either and yes they need to clean up their own houses as well) but when comparing wage rates for bosses its with the US and Europe, when comparing wage rates of the workers its with third world countries... No wonder worker satisfaction and motivation tends to pretty low and cynicism high...

 

[AdamR]

I agree. Some of the comments seem to show a lack of understanding about how large companies work and how the CEO's are remunerated. I may not agree with CEO remuneration, but is hardly a Qantas specific problem.

The fixed remuneration component of the salary only changed a little. Most of the increase was actually from incentive programs. While I may not agree with some of the direction Qantas is taking, Joyce is clearly executing the strategy that the board have put in place, and has been meeting the performance requirements set to be rewarded for it.

There once was a time when meeting the performance requirements of your job was called 'doing your job'. Any bonus/incentive for doing your job seems a little off to me. I am all for incentives for exceptional work or dedication - but there is no particular evidence of that here.

I also object to employees being paid so much as a matter of principle. They are not taking the risks, the company and its shareholders are. (I speak as a partner in a successful business where I and my partners bear the risks personally.)

But irrespective of that, incentives which dwarf the base salary tend to lead to distortions in operation of the company to meet the written requirements of the incentive plan. Incentives should be voted on by shareholders (based on a board recommendation), but without there being a set incentive plan. In other words, do something that convinces your shareholders you deserve a bonus, rather than help set in advance performance targets you already know you can meet.

 

[JohnK]

I agree. Some of the comments seem to show a lack of understanding about how large companies work and how the CEO's are remunerated. I may not agree with CEO remuneration, but is hardly a Qantas specific problem.

Regardless of whether people understand CEO remuneration or not it still does not make it right.

And what makes this worse is that a company is about to shed 1,000 jobs, implements wage freezing, asks employees to take pay cuts, wants to move more jobs offshore, increased airfares etc. All for what? For the sake of the shareholders or for their own pockets?

The common person is not really a fool but most people are content with their own existence to worry about it. Anyway you look at it the salaries these people are getting paid are obscene.

 

[AnonymousCoward]

There once was a time when meeting the performance requirements of your job was called 'doing your job'. Any bonus/incentive for doing your job seems a little off to me. I am all for incentives for exceptional work or dedication - but there is no particular evidence of that here.

I think the idea is that the base is for "doing your job", and the incentives are for achieving additional hurdles. Or candidates will just require it all to be rolled into the base.

I also object to employees being paid so much as a matter of principle. They are not taking the risks, the company and its shareholders are. (I speak as a partner in a successful business where I and my partners bear the risks personally.)

Well, then you can just pay them all in the base. But then there's no incentive to do anything.

But irrespective of that, incentives which dwarf the base salary tend to lead to distortions in operation of the company to meet the written requirements of the incentive plan. Incentives should be voted on by shareholders (based on a board recommendation), but without there being a set incentive plan. In other words, do something that convinces your shareholders you deserve a bonus, rather than help set in advance performance targets you already know you can meet.

Do you think that any self respecting CEO would accept such a proposition? Or any employee at all? Most bonus schemes have rules set up-front. If you get a certain rating, or your busines group makes a certain profit, then you get a bonus. Not a "well, if you exceed your profit target by a margin, ex post facto, that exceeds our expectations, you might get a bonus if we feel good about you"? No one would sign up for such a thing.

Now, that's not to say the current system is good. But I don't think the above is any better.

 

[AdamR]

Do you think that any self respecting CEO would accept such a proposition? Or any employee at all? Most bonus schemes have rules set up-front. If you get a certain rating, or your busines group makes a certain profit, then you get a bonus. Not a "well, if you exceed your profit target by a margin, ex post facto, that exceeds our expectations, you might get a bonus if we feel good about you"? No one would sign up for such a thing.

Many incentive schemes have written targets, but many businesses do not do things that way. I am a firm believer that specific targets for fixed incentives create an economic incentive to achieve THAT requirement, even if to the detriment of the company's broader needs.

I wold rather see a higher base, than the arrangements we get now.

If there are to be large bonuses, then they should be based on either longer term performance - e.g. options which vest a long time in the future - or subject to shareholder approval.