The board of Qantas Airways (ASX:QAN) Ltd is bracing for a challenging annual meeting, with significant shareholder discontent looming over its remuneration report, which determines the final pay of the airline’s former boss, Alan Joyce and others.
The dissatisfaction has been fuelled by a series of recent scandals that have tarnished the airline's once-shiny reputation in the past three months.
Pay packets may be voted down
Qantas' remuneration report for the 2023 financial year has faced opposition from all proxy advisers, who hold influence over institutional shareholders. Additionally, key investors such as superannuation giant HESTA and Norges Bank have expressed their disapproval.
If more than 25% of shareholders vote against the remuneration report, which contains the payout for Joyce, along with remuneration figures for newly appointed chief Vanessa Hudson, and the executive team, it would have limited immediate consequences for the business.
That said, two consecutive strikes on the same resolution in 2024 could trigger a board spill, a historic event in Australian corporate history.
Timeline of trouble
The rumblings revolve around events that unfolded since Qantas announced a record $2.47 billion underlying profit on August 23.
Within the space of two weeks, the airline faced Federal Court action from the consumer watchdog – the Australian Competition and Consumer Commission (ACCC) – for alleged breaches of consumer law, received a serious concerns notice over mishandling of COVID-19 credits, and lost its High Court appeal regarding the illegal outsourcing of 1,700 ground handler positions.
The ACCC alleged that consumers purchased tickets for flights that were never scheduled – the so-called ‘ghost flights’ – rejected its planned $614 million takeover of Alliance Airlines, and voiced concerns regarding its partnership with China Eastern.
These incidents led to the early departure of CEO Alan Joyce and the resignation of Chair Richard Goyder.
In addition, the carrier faced accusations of undue government influence over Transport Minister Catherine King's rejection of a request from Qatar Airways to increase flights to Australia, while a report revealed Prime Minister Anthony Albanese's son received membership to Qantas' exclusive chairman's lounge.
Vanessa Hudson, the current CEO, has issued several apologies to employees, customers, and shareholders and pledged improved management of consumer and shareholder demands.
While some insiders believe these matters might have been pursued differently under Joyce's leadership, the airline continues to face scrutiny, including opposing the ACCC's ghost flight allegations.
Upcoming verdict
Adding to the drama of the impending meeting, the NSW District Court is expected to announce a verdict on a long-awaited safe work case today, determining whether Qantas breached safety rules when it stood down cleaner Theo Seremetidis in February 2020.
The airline now faces a tumultuous period as it grapples with internal and external pressures, and hopes to regain the trust of shareholders and passengers alike.