Qantas Airways Ltd (ASX: QAN) shares are catching some headwinds today.
Shares in the S&P/ASX 200 Index (ASX: XJO) airline closed yesterday trading for $5.97. In late morning trade on Thursday, shares are changing hands for $5.88 apiece, down 1.5%.
For some context, the ASX 200 is down 0.58% at this same time.
This comes amid news of some major remuneration clawbacks following the rather turbulent departure of former long-serving CEO Alan Joyce.
Here's what's happening.
Qantas shares slip amid Joyce remuneration clawback
If you've been following along with Qantas shares or have done any air travel since the COVID-19 reopening, you're likely aware of the series of negative publicity and legal entanglements surrounding the airline in 2023.
Those included lost baggage, lengthy flight delays, illegally outsourcing ground handling work, and selling tickets to cancelled flights. Among others.
Joyce also caught flack for selling some $17 million worth of his Qantas shares in June 2023.
Today, the Qantas board released a report following a review of key governance matters spearheaded by business adviser Tom Saar.
The review found that mistakes had been made by both the board and management during the pandemic and reopening, which caused "significant reputational and customer service issues."
The review determined that there were no indications of deliberate wrongdoing.
However, after considering the individual and collective accountability of members of the management committee, the board decided to reduce Joyce's FY 2023 remuneration package by a whopping $9.26 million. That will see the former CEO's final year payout fall to approximately $1.8 million.
The board also determined that short-term incentives for affected current and former senior executives would be cut by 33%. Including Joyce's $900,000 reduction, the overall decrease in Qantas FY 2023 short-term incentives is approximately $4.1 million.
The rest of Joyce's pay cut comes from an $8.36 million forfeiture of Qantas shares he held from the 2021-2023 Long Term Incentive Plan.
Executive shakeups
Qantas shareholders will also have a chance to vote on a new chairman of the board in October.
Among the executive shakeups ahead, Richard Goyder will retire as chairman on 16 September 2024, prior to the Qantas' AGM in October.
John Mullen, who joined the board in April, will then assume the role of chairman. His position will be put to a shareholder vote at the AGM.
"It's important that the board understands what went wrong and learns from the mistakes of the past as it's clear that we let Australians down," Mullen said.
Mullen added:
Vanessa and her new management team have made positive progress towards delivering better outcomes for customers and employees, but there is still a significant amount of work to be done to rebuild the trust of all stakeholders.
The implementation of the recommendations in the report will result in stronger governance and better decision-making within Qantas and ultimately better outcomes for our stakeholders.
With today's intraday losses factored in, Qantas shares remain up 9% in 2024.
