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The board of Qantas is braced for a frosty reception when they front shareholders at the annual meeting on Friday, with a significant protest vote against their remuneration report likely in light of the swathe of scandals that have plagued the airline over the past three months.
Qantas’ remuneration report for the 2023 financial year has been rejected by all proxy advisers – which influence the votes of institutional shareholders – and a number of key investors, including superannuation giant HESTA and Norges Bank.
Qantas’ board looks set for turbulence at Friday’s annual general meeting in Melbourne.Credit: Louie Douvis
If more than 25 per cent of shareholders vote against the remuneration report – which determines the final pay of former airline boss Alan Joyce, newly minted chief Vanessa Hudson and the rest of her executive team – there are few consequences for the business unless another strike against the remuneration report is recorded in 2024.
Two consecutive strikes on the same resolution will trigger a board spill. This has never happened in Australian corporate history.
Qantas has undergone a serious fall from grace in the eyes of customers since flying resumed after COVID-19, but the crux of shareholder dissent can be narrowed to events that have unfolded since it revealed a record $2.47 billion in underlying profit on August 23.
Within two weeks, Qantas became the subject of Federal Court action lodged by the consumer watchdog over alleged breaches of consumer law, received a serious concerns notice by the same body over its mishandling of COVID-19 credits, and lost its High Court appeal of two Federal Court verdicts that found it had illegally outsourced 1700 ground handler positions.
These events triggered the early departure of chief executive Alan Joyce, who was not supposed to retire until after Friday’s meeting, as well as the resignation of chair Richard Goyder, who will step down by next year’s annual meeting.
Directors Maxine Brenner and Jacqueline Hey will also leave by February next year, while Michael L’estrange will retire at this year’s meeting.
Qantas has also been accused of wielding undue government influence over the federal government in light of Transport Minister Catherine King’s recent rejection of a request from Qatar Airways to double its flights to Australia, and a report in The Australian Financial Review that revealed Prime Minister Anthony Albanese’s 23-year-old son had been issued a membership to the airline’s exclusive chairman’s lounge, usually reserved for chief executives and other high-profile figures.
Hudson has issued a number of apologies to employees, customers and shareholders since the events of late August, and has pledged the airline group will strive to better manage the demands of consumers and shareholders under her leadership.
So far, Qantas has bowed to the judgement of the Australian Competition and Consumer Commission when it rejected its planned $614 million takeover of fly-in, fly-out charter service Alliance Airlines and expressed concern with the continuation of its partnership with China Eastern.
A number of Qantas insiders who spoke to this masthead said it was likely the airline would have further pursued both matters if Joyce was still at the helm.
But Qantas did raise consumer disgruntlement again on Monday when it filed its opposition to the ACCC’s ghost flight allegations. The submission to the Federal Court argued that the airline business could never guarantee a particular flight time, just that passengers were entitled to a “bundle of rights” when flying.
It also faces another hurdle before the annual meeting, with the NSW District Court due to hand down a long-awaited safe work verdict on Friday morning.
That verdict will determine whether Qantas breached safety rules when it stood down cleaner Theo Seremetidis in February 2020.
Seremetidis had expressed concerns with the business over inadequate personal protective equipment at the onset of the COVID-19 pandemic, and encouraged other employees against working in what he determined to be unsafe conditions.
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