Qantas Board Rebuked over Executive Pay

Chairman of Qantas Airways (QAN) Leigh Clifford and his board were rebuked by the shareholders for the second consecutive year over the issue of executive pay. About 44 percent votes went against the Qantas decision of a huge remuneration for Geoff Dixon, who is the former chief executive of the Airlines. It is to be mentioned that Mr. Dixon left Qantas in November 2008 and received $10.7 million for his last year with the company although he remained as Qantas chief executive for only five months. In the final payment, $1.9 million base, $4.5 million in retention and $657,000 on termination were included. It also included a $3 million worth of compensation for him due to government superannuation law changes which created a lot of controversy as it is believed that the changes never affected him.

However, Mr. Clifford defended the board’s decision regarding the Dixon payment stating that Mr. Dixon’s payout coinciding with the time of economic meltdown and a struggling airlines market was unfortunate. The board was honouring an agreement that they had with the former chief executive and it was necessary to retain his services in the consequences of a private equity bid during 2007 which failed, Mr. Clifford added. The recent development was another blow for the Qantas board for the year after the company saw its annual net profit sliding down 88 percent due to the worldwide financial crisis. Despite claming that there won’t be any further deterioration, the Qantas authority refused to forecast the profit for the current year. Qantas share price remained unchanged on Wednesday at $2.99.

The Airlines is planning to reduce costs by as much as $1.5 billion over the next three years where it has targeted to cut $500 million in the current financial year. Reconfiguring the aircrafts, fuel conservation and technological improvements are the major components of the whole plan.