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Qantas Airways Ltd. docked A$9.3 million ($6.1 million) from former Chief Executive Officer Alan Joyce\u2019s final payout<\/a> and announced a governance overhaul after a review partly blamed board and management errors for the carrier\u2019s reputational crisis.<\/p>\n The long-anticipated verdict on Joyce\u2019s remuneration follows an internal review of the string of damaging events after the pandemic that led to Joyce\u2019s\u00a0premature departure<\/a>\u00a0in September 2023. The money clawed back represents close to half of Joyce\u2019s total planned pay last year and includes all the Qantas shares set aside for him as a long-term incentive.<\/p>\n The airline\u2019s\u00a0problems<\/a>\u00a0included a surge in cancellations and lost bags, accusations from the regulator that Qantas\u00a0sold tickets<\/a>\u00a0on flights it had already scrubbed from schedules, and a court ruling that Qantas\u00a0illegally fired<\/a>\u00a0about 1,700 ground staff. Joyce had \u201coverall accountability and responsibility for the outcomes of the business,\u201d Qantas said in a statement.<\/p>\n Joyce\u2019s pay cut reflected the conclusions of an internal report released by Qantas on Thursday that identified a series of board and management failings in the final months of Joyce\u2019s 15-year tenure.\u00a0<\/p>\n Business adviser Tom Saar, hired by Qantas to carry out the investigation, found there was excessive deference toward Joyce, who\u2019d overcome previous crises, and decisions weren\u2019t sufficiently challenged. There was too much focus on financial and commercial goals and not enough attention on customers and staff, Saar said.<\/p>\n The public release of the report suggests Qantas is taking a more transparent and less confrontational approach under Joyce\u2019s successor, Vanessa Hudson. The findings themselves largely cement the long-held perception that Qantas and its then-dominant CEO Joyce failed passengers and staff in the wake of Covid-19 as the airline raced to return to profit.<\/p>\n Qantas\u2019s board and management are taking steps to address all 32 recommendations in Saar\u2019s report, the airline said. Many of the required actions have already been completed or are underway, it added. Still, the review concluded that the damage to the airline is yet to be fully repaired.<\/p>\n \u201cThere is still a significant amount of work to be done to rebuild the trust of all stakeholders,\u201d Qantas Chairman Elect John Mullen said.<\/p>\n In his report, Saar listed five root causes of the airline\u2019s crisis.<\/p>\n An Australian group representing institutional investors including pension funds described the airline\u2019s announcement as \u201can important step in Qantas\u2019 governance reset.\u201d Ed John, executive manager of stewardship at the Australian Council of Superannuation Investors, said \u201cit is critical that the company learns from the mis-steps identified and the new board puts all of the recommended changes into practice.\u201d<\/p>\n Saar also recommended additional scrutiny of Qantas stock trades by the CEO and senior managers after Joyce\u00a0sold A$16.9 million of shares<\/a>\u00a0in the airline, the bulk of his holdings, in June 2023. The shares plummeted in the weeks that followed as Australia\u2019s competition watchdog accused the airline of selling seats on thousands of so-called ghost flights.<\/p>\n<\/div>\n\n\n\n\n
\n Dynamic<\/th>\n How it went went wrong:<\/th>\n<\/tr>\n \n Culture<\/td>\n Too focused on financial performance\u00a0<\/td>\n<\/tr>\n \n Leadership<\/td>\n Top-down style with inadequate listening<\/td>\n<\/tr>\n \n Corporate governance<\/td>\n Too little was challenged by the board<\/td>\n<\/tr>\n \n Covid impact<\/td>\n Fallout from decisive action was unappreciated<\/td>\n<\/tr>\n \n External communications<\/td>\n Combative approach exacerbated issues<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n