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That’s a wrap
By Amelia McGuire and Jessica Yun
Thanks for reading our live coverage of Qantas’ annual general meeting.
The two and a half hour meeting was a lot to take in. In case you missed it, here are some of the key takeaways.
- More than 80 per cent of shareholders rejected the businesses remuneration plan. Qantas’ remuneration reports are normally received with overwhelming support, but the brand has been tarnished recently due to a string of controversies. If a second strike is recorded next year it will result in a board spill. Two consecutive shareholder strikes on the same agenda item has never been recorded in Australian corporate history.
- All other items of business passed with shareholder support, although all directors faced a barrage of at-times hostile questions from shareholders disappointed in the governance of the businesses.
- Brand guru and director Todd Sampson held on to his board seat for another term but received a 34 per cent protest strike. Since chair Richard Goyder and chief Alan Joyce announced their resignations, Sampson has been the focus of consumer and shareholder anger in light of the fall in the businesses standing with customers, employees and investors alike.
- Qantas revealed it is now sitting on $520 million in outstanding COVID-19 credits, down from $750 million in August when it scrapped the expiry dates.
Investors didn’t appear to be fazed by today’s proceedings, sending the carrier’s share price up 2.1 per cent in afternoon trading.
Qantas’ share price is still 20 per cent lower than August, meaning the board and executive have a long way to go before shareholder trust is restored.
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Safe Work verdict deferred; TWU, Tony Sheldon slam Qantas
By Jessica Yun
In other Qantas-related news, the NSW District Court, which was expected to deliver a long-awaited safe work verdict this morning, has deferred its decision as the judge has called for further submissions.
Qantas is alleged to have stood down Theo Seremetidis – a ground crew employee and health and safety representative – on February 2, 2020 after he advised cabin cleaners they did not have to clean inbound aircraft from mainland China if they felt unsafe.
Seremetidis has said Qantas did not provide any personal protective equipment and that ground staff were expected to clean planes arriving from China with just water.
Qantas has denied the allegation that he was stood down for raising safety concerns.
“He was directed not to come to work while he was investigated for failing to comply with our standards of conduct policy, including allegations of attempting to incite unprotected industrial action,” Qantas said in a statement in November last year.
At a press conference outside the NSW District Court in Sydney this morning, Transport Workers Union (TWU) national secretary Michael Kaine described Seremetidis as “heroic” for “standing up to what has been revealed to be one of the greatest corporate bullies in Australian history”.
TWU national secretary Michael Kaine has been a fierce critic of Qantas.Credit: Alex Ellinghausen
“This is a company whose exploits have been laid bare. As we go into the AGM, we’ve got shareholders who are furious, the general public is furious, workers that are furious, because they’ve been hoodwinked by a company that previously they had, over generations, grown to trust. That trust has been ripped away.”
Labor senator Tony Sheldon was part of the Senate inquiry into the controversial Qatar decision.Credit: Alex Ellinghausen
Labor Senator Tony Sheldon, who was part of the Senate inquiry into the Qatar decision and a former national secretary of TWU, was also at the press conference.
He accused Qantas of “operating like a crime gang” and called for Goyder to fast-track his retirement.
“When you operate like a crime gang, then you need to be held to account, not be approved to be given bonuses, and to turn around and be thrown in the clink, thrown out of the business,” he declared.
“Only a root and branch change in his company is going to make any difference in the travelling public and the workforce that relies on Qantas to be great again.”
How did we get here?
By Amelia McGuire
Qantas’ share price has fallen 20 per cent in the past six months, but much of the turmoil can be narrowed down to a series of scandals which kicked off in August.
Qantas’ month from hell started when it revealed a record $2.47 billion in underlying profit for the 2023 financial year on August 23.
Days later, former boss Alan Joyce and then chief financial officer Vanessa Hudson fronted a Senate inquiry into the cost of living where they were grilled over issues including high airfares; the airline’s handling of unused credits for flights that were cancelled during the COVID-19 pandemic; Qantas’ industrial arrangements with staff; and damage to the airline’s reputation.
Then, the ACCC announced legal action against Qantas, alleging the airline breached consumer law between May and July last year when it sold thousands of tickets on already cancelled flights. Qantas filed its defence against these claims in the Federal Court earlier this week, and argued the airline had never guaranteed passengers a particular flight, just a bundle of rights associated with a flight.
A day after news of the ACCC investigation broke, Joyce announced he would quit the airline business immediately, bringing forward his retirement by two months.
Some shareholders were quick to criticise the board for allowing Joyce to sell more than 80 per cent of his shares in the business in June given the ACCC investigation had already commenced.
The share price of Qantas has not recovered since it closed at $6.69 on the day of the share sale.
The High Court then ruled against Qantas’ attempted appeal of two former Federal Court verdicts which found its 2020 outsourcing of 1700 ground handling positions was unlawful.
These events, coupled with sustained backlash from customers and employees, have prompted multiple apologies from the business which has also pledged to be more “humble” in the future.
The airline’s board of directors reiterated many of those apologies at the shareholder meeting today.
Over 80 per cent of shareholders reject remuneration report
By Amelia McGuire
Qantas has been hit with an 83 per cent vote against its remuneration report for the 2023 financial year, after a series of scandals damaged the airline’s reputation.
This is the first time Qantas has received a remuneration strike and is one of the biggest strikes ever recorded in Australian corporate history.
Qantas’ executive remuneration report has been soundly rejected.Credit: Joe Armao
Remuneration committee chair and outgoing director Jaqueline Hey spoke to shareholders ahead of the vote.
“The message to management is unambiguous. We must deliver on a level of service our customers have a right to expect,” Hey said.
A “first strike” is when a company receives a no vote of 25 per cent or more on its remuneration report. If Qantas receives another no vote of more than 25 per cent next year, therefore incurring a second “strike,” it would trigger a vote on whether to spill the board.
Qantas’ financial framework has been in place since 2015.
Meanwhile, Hudson’s long-term incentive plan has been approved despite a no vote of 23.8 per cent of proxy votes.
Brand guru Todd Sampson receives 34% protest vote against re-election
By Amelia McGuire
Sampson said he “reflected a lot” regarding his decision to stand again for re-election but decided to stand for “corporate memory” and “experience”.
He survived a hefty protest vote against his re-election, with 66 per cent of the votes cast in favour. Sampson has sat on the Qantas board since 2018.
“I take full responsibility for my role on the board and the attention it has brought,” he said.
Todd Sampson has held onto his seat on the board of Qantas.Credit: Joe Armao
Sampson has been a focus of shareholder anger, with multiple proxy advisors recommending shareholders vote against his re-election due to his heightened marketing and brand experience.
His address to the meeting is the first time Sampson has spoken about his role in the tarnishing of the brand in recent months.
“Our brand and reputation have suffered considerable damage, damage that we can and will repair,” he said.
This feels like a good time to resurface a cartoon drawn by artist Matt Golding a little while ago.
Cartoon of Todd Sampson by Matt Golding.Credit: Matt Golding
Hudson elected to board with overwhelming support
By Amelia McGuire
We’ve finally moved onto item two of business, which is the re-election of board directors.
The directors up for election are chief Vanessa Hudson, Doug Parker, Dr Heather Smith, Belinda Hutchinson and Todd Sampson.
Qantas CEO Vanessa Hudson.Credit: Joe Armao
Hudson received the support of 99.2 per cent of proxy votes. She will not be put up for re-election throughout her tenure as the airline business’ boss.
Former American Airlines boss Doug Parker received 98.66 per cent of proxy votes in favour of his election.
Dr Heather Smith was elected with 99.36 per cent of proxy support.
In keeping with the theme of the day, Smith also acknowledged the disappointment of Qantas customers.
“I joined the board on August 24 as the accumulated frustration from customers and shareholders over our social license to operate grew... Many of our customers are angry and unfortunately many Qantas employees have unfairly borne the brunt of that. As a long-standing customer, I too have experienced and been disappointed by the events of the recent past,” Smith said in her election speech.
Dr Heather Smith.Credit: Joe Armao
Goyder declined a request from Stephen Mayne to disclose whether Smith had previously been a member of the chairman’s lounge during her long career, which has involved advising government on national security and intelligence matters.
In September this year, the Albanese government commissioned an Independent Review into Australia’s intelligence agencies that will be co-led by Smith.
The Australian Shareholders’ Association advised investors to vote against her appointment in light of her strong ties with the government.
Director Belinda Hutchinson received a 7 per cent vote against her re-election, with 92 per cent of shareholders in support. Hutchinson is the audit chair and was appointed in 2018.
Majority of Qantas board admit to not travelling economy
By Amelia McGuire
Only two of Qantas’ 11 board members have caught an economy flight to an international destination in the last year.
Directors Tony Tyler and Todd Sampson were the only board members to put their hand up to flying in an economy seat over this period, following a question from a shareholder who implored them to consider travelling as their customers do.
Qantas’ leadership team has been urged to fly economy.Credit: AFR
“You ought to put yourself in the shoes of our rank and customer base. We get it, you’re very important, but put yourself in the shoes of the average Joe and see what kind of experience they’re having,” the shareholder said.
Goyder indicated Hudson’s team have started flying in economy more often.
“Vanessa and her team are doing a lot of that now. I won’t go into great detail now,” Goyder said.
Goyder slammed over timing of Joyce’s share sale
By Amelia McGuire
Chairman Richard Goyder has shut down the microphone of a representative from the Australian Shareholders’ Association after he questioned why former boss Alan Joyce was given approval to sell the bulk of his Qantas shares amid an investigation from the consumer watchdog.
The decision to cut off the question was met with boos and jeers from shareholders in the room shouting “shame on you”.
“I have absolutely zero concern about the ethics of the people here,” said Goyder, who stressed the share sale complied with the company’s disclosure requirements.
Richard Goyder, Qantas chairman.Credit: Alex Ellinghausen
Joyce was given approval to sell more than 80 per cent of his shares in the airline on July 23 for about $6.34 per share. The share price has since lost about 22 per cent.
At the time, Qantas had received two notices from the consumer watchdog, the ACCC, regarding an investigation into alleged selling of tickets on flights that had already been cancelled.
A Qantas spokesperson told the Australian Financial Review in September that it was not until the ACCC announcement on August 31 that it became clear the investigation would result in legal action. The spokesperson also said the consumer watchdog had multiple ongoing investigations into the business at the time it sent the notices.
Qantas’ unredeemed COVID-19 credits balance now $520 million
By Amelia McGuire
Qantas boss Vanessa Hudson has told shareholders the airline business is now sitting on about $520 million of unredeemed flight credits following flights cancelled over the COVID-19 pandemic.
Qantas scrapped the expiry on COVID-19 credits in August following a concerns notice from the consumer watchdog, which also launched legal action against the business over alleged consumer law breaches.
At the time, Qantas’ outstanding amount was $750 million. The business accrued $2 billion worth of cancelled flights across Qantas, Jetstar and overseas based bookings from the onset of the COVID-19 pandemic to October 2021.
Qantas was grilled by the Senate select committee into the cost of living after the August figure was revealed, with senators accusing Qantas of not being transparent.
Hudson said today the airline business was now texting people with unredeemed credits to reduce the amount.
Qantas boss Vanessa Hudson apologises again
By Amelia McGuire
Qantas boss Vanessa Hudson has opened her first annual general meeting address by reiterating her previous apologies to customers, shareholders and employees for the group’s mistakes.
Hudson, whose speech followed similar comments from chair Richard Goyder, acknowledged the business has failed its stakeholders in many ways.
“There are many things – big and small – that we didn’t get right … I apologise to you our shareholders today,” Hudson said.
Qantas CEO Vanessa Hudson. Credit: Joe Armao
Hudson went on to say she was committed to making Qantas one of the country’s most trusted brands and acknowledged this would not be an easy goal to achieve given the brand damage the airline has suffered in the past year.
“Doing this won’t be easy and it will take time. But I’m confident we’ll succeed because of the incredible passion our people have for Qantas, and what it has long represented,” Hudson said.
She then repeated the airline group’s previous commitments to make the Qantas “easier to deal with”, which include overhauling its approach to customer service, and investing millions in technology.
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