Qantas’s annual general meeting erupted with shareholders shouting “shame on you” at the board’s chairman, Richard Goyder, as investors overwhelmingly rejected the embattled company’s executive pay deal.
That result, which marked one of Australia’s largest ever protest votes against executive pay, came after Goyder and the airline’s chief executive, Vanessa Hudson, apologised to investors for a year of sagas that had seen the company’s share price plummet.
Qantas has been grappling with several potentially costly issues, including a looming compensation bill for illegally outsourcing ground handling jobs and regulatory action over allegations it sold tickets to thousands of already-cancelled flights.
Hudson – who had been earmarked to begin as CEO from Friday’s AGM but was forced to take up the role in September when Alan Joyce resigned – declared “we want to be easier to deal with”.
While the meeting was at times unruly, and opposition to executive salaries notable, Qantas was able to lock in its preferred board of directors, which included the re-election of the advertising guru Todd Sampson.
Sampson – an advertising veteran and panellist on ABC’s Gruen series who was appointed to the Qantas board in 2015 – survived a strong protest vote from shareholders who felt he misread the zeitgeist turning against the airline in recent years.
He overcame a sizeable 34% protest vote against his re-election to remain on the board, in a result that will come as a surprise to some shareholders who had expected the marketing expert and television personality would fall short of the 50% required.
Speaking about his decision to run for re-election, Sampson, the only board member dressed casually in a long T-shirt, looked nervous. He noted he had “spent a career helping other clients in similar brands situations that we now find ourselves in”.
“This is when my experience will be most valuable,” he said.
Questions from the shareholders became heated during the meeting, to the point where Goyder shut one down.
Shareholder Chris Maxworthy raised “concerns about the ethics of the board” in appealing a federal court decision about illegally outsourcing ground handlers to the high court.
Qantas lost its appeal and is in negotiations to compensate the 1,700 former staff to the order of hundreds of millions of dollars.
“OK, you might have justified at the time on a commercial basis, and we are paying for your lack of ethics now, or we will be shortly, once negotiations [for compensation] are completed,” Maxworthy said.
Goyder responded that “we would never, as a board or executive, and this goes to your question on ethics, would never ever do anything that we felt was illegal, and so we felt it was the right thing to do”.
After Maxworthy followed up with questions about Joyce selling off shares before the Australian Competition and Consumer Commission started legal action against Qantas for allegedly selling tickets to flights that had been cancelled, Goyder asked for Maxworthy’s microphone to be turned off.
Multiple attenders then shouted “shame on you”.
Another shareholder, Greg Harper, asked the board members to raise their hand if they had taken an economy class international trip in the last year “as an indication of how interested you are in the core part of the business”.
Just one board member, Antony Tyler, raised his hand.
Afterwards, Harper told the board to “put yourself in the shoes of the average Joe and see what kind of experience they’re having”.
Pay plan rejected
At the start of his opening address, Goyder said shareholders had overwhelmingly voted against the company’s executive pay plans.
Results later showed that 83% of votes were cast against the remuneration plans, marking one of the biggest rejections on record for any Australian company, even rivalling those lodged against some of the country’s big banks after an inquiry exposed widespread misconduct in the financial sector in 2018 and 2019.
“This is obviously a very clear message from shareholders,” Goyder said.
The vote is well above the 25% required for a first strike, leaving the airline vulnerable to a second strike next year, which could trigger a board spill.
Shareholders have seen billions of dollars in value erased from their Qantas stock in recent months, even after the company reported a record $2.47bn full-year profit in August.
Shortly after the profit result, the competition regulator announced it was pursuing Qantas over allegations it had advertised and sold tickets for more than 8,000 flights it had already cancelled in its internal system, triggering a share price slide.
Qantas shares shed 20% of their value in the weeks after the start of the regulatory action, before a recent uptick.
Goyder said rising oil prices had weighed on the company’s share price. He said the airline had also increased air fares recently in response to the rising jet fuel prices.
At the AGM, Hudson revealed that Qantas still holds $520m in Covid-related booking credits – down from $570m in August – as she vowed the airline would be “unrelenting” in contacting customers about the credits they are entitled to.
The credits had been set to expire by the end of the year but the airline buckled to pressure over its policies for spending the credits, and they no longer have an expiration date.
Hudson was also elected as a director, in addition to her chief executive role, despite questions about the necessity of such an appointment.
