Qantas hits back pockets

qantas_scissorsQantas executives have seen their incomes dive over the past year as the airline’s financial woes continue.

Chief executive Alan Joyce took home $2m for the 2013 financial year after foregoing five per cent of his base salary. Overall, his pay package was 40% lower than last year’s $3.3m package and 68% lower than his ‘at target’ potential of $6.4m. While $2m seems a far cry from the $6.4m figure, his statutory income totaled $4m including share-based payments. Last year, however, that figure stood at $5.1m.

The trend has also trickled right down the list of Qantas executives. All of the airline’s senior and middle management were subject to a pay freeze and no bonuses were paid. Chief financial officer Gareth Evans took home $1.05m compared to $1.42m the previous year, and chief executive group loyalty Lesley Grant received $798,000 on last year’s $1.1m.

The same goes for chief executive Qantas International Simon Hickey who took a $523,000 pay cut – banking $948,000 this year – and CEO Jetstar Jayne Hrdlicka who received $1.04m compared to $1.36m the previous year. Chief executive Qantas Domestic Lyell Strambi also who took home $353,000 less with $1.07m this year.

Statutory pay packages differed slightly for all executives, taking into account the treatment of share-based payments. However, the trend remained the same.

Evans’ statutory income dipped from $2.1m to $1.64 this year, Grant saw a $200,000 reduction to $1.06m and Hickey’s statutory pay dropped from $1.92 to $1.45m. Hrdlicka, meanwhile, went from $1.72m to $1.54m and Strambi’s statutory income dropped from $2m to $1.69.

Outlined in the 2014 Qantas Annual Report, the airline announced it was changing the ‘pay mix’ for executives in the year ahead, moving away from annual incentives and towards long-term incentives as it looks to wipe $2bn from its bottom line over the next three years.

“This is a one-off change that aligns the entire management team with the immediate priorities of the transformation agenda,” the 132-page report said.

The announcement comes just weeks after Qantas announced a $2.8bn statutory loss after tax – a figure that the airline has described as “confronting” and “unsatisfactory”. The airline is forging ahead with an aggressive restructure with the hope of returning to the black in the first half of next year.

It’s still too early to gauge whether the airline’s restructure is in fact delivering results, but investors seem optimistic, with Qantas shares closing 7% higher after Joyce announced the figures were “better than expected”. Investors will have to hold out until Qantas delivers its half year results to measure the success. In the meantime, the airline will continue its structure shake-up which includes shaving the remaining redundancies from its books.