Pay backlash for Qantas
By Matt O'Sullivan | smh.com.au | 21 October
Qantas’s board has copped the second backlash against its executive pay in two years, after more than two-fifths of shareholders voted against its pay card.
Almost 44 per cent of votes were cast against the remuneration report at Qantas’s annual meeting in Perth today following outrage over payments to the airline’s former chief executive, Geoff Dixon.
Last year about two-fifths of votes were cast against Qantas’s pay card. ‘‘Shareholders are angry – they want change.
They are out of pocket in terms of the market value of their shares and dividend. [Yet] the pockets of executives seem to be as full as ever, particularly those of Mr Dixon,’’ a shareholder said today.
The revolt centred on a $3 million payment to compensate Mr Dixon for changes to tax on superannuation three years ago.
It boosted his final pay to almost $11 million, again making him one of the highest-paid airline executives in the world. Another shareholder asked why the board agreed to ‘‘a contract of such generosity’’.
Qantas’s chairman, Leigh Clifford, spent a considerable part of the meeting this afternoon explaining to shareholders the payment to Mr Dixon.
He emphasised that it was important to put Mr Dixon’s contract in the context of the uncertainty surrounding the airline in the aftermath of the failed private-equity bid in 2007 and the need to retain senior executives at a critical juncture.
‘‘Let’s look forward. We have a remuneration policy going forward that I think is quite acceptable,’’ Mr Clifford said.
Influential proxy advisers RiskMetrics and CGI Glass Lewis both urged institutional investors to vote against Qantas’s pay card.
The Australian Shareholders Association did likewise. The compensation to Mr Dixon related to $7.66 million paid into his super account when he signed a new contract in August 2006 – four months before the board endorsed the doomed private-equity bid for the airline.
Shortly after the payment was made, the Howard government imposed a $1 million cap on contributions, exposing him to substantial tax penalties.
Several months later Mr Dixon took advantage of a ‘‘transitional period’’ to withdraw the money from his super account and avoid the tax penalty.
The backlash against Qantas’s remuneration report is still less severe than that copped by engineering concern Downer EDI last week when almost three-fifths of shareholders voted against generous bonuses to its senior executives.
mosullivan@smh.com.au
First published by Smh.com.au on October 21 2009
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