In recent times, speculation has surfaced that Qantas is looking to replace its current CEO,
Alan Joyce. The issue was raised as the airline's shareholders were asked to approve a potentially
big paycheck for Joyce, arousing curiosity if the airline had any succession plan in
place once Joyce left. Let’s examine this topic in more detail in today’s video!
Before being promoted to Qantas in November 2008, Joyce was overseeing the low-cost
subsidiary airline, Jetstar. And while 15 years with a single airline is admittedly a long time,
airline shareholders are becoming quite skeptical after a shocking year…
What do we mean by this? Well, the potentially big paycheck in question amounted to approximately
$13.8 million Australian dollars - or $8.86 million US dollars. This was part of the carrier’s
executive retention scheme detailed earlier in February, which aimed to keep Joyce at the helm of
Qantas. The scheme also entitled Joyce to at least 698,000 shares, worth about $4 million US dollars.
However, the scheme also came with some operational targets,
such as keeping the Qantas Group's net debt below a specific targeted
level and cutting at least $1 billion in expenses from operations by June 2023.
Additionally, Joyce had to return Qantas to profitability by the 2023 fiscal year.
And Joyce has so far been putting Qantas on track to achieve these financial goals,
but perhaps it came with an unnecessary cost to the airline's reputation.
In fact, over the past several months, the airline has been plagued with several operational
disruptions as passengers have started to perceive Qantas as entirely unreliable.
Suffering a similar fate was Jetstar, which has also been hounded by operational difficulties.
With such a hefty paycheck coming to Joyce, shareholders have understandably
been raising eyebrows, given what has been happening with Qantas in 2022.
CEO of the Australian Shareholders Association, Rachel Waterhouse, commented, saying:
"The organization has relied on one individual for some time. He’s done
really well at several points in time, but retail investors will want to know
who is in the wings and who can deliver the targets going forwards. The succession plan
is important from a confidence perspective for shareholders."
Additionally, Qantas Chairman Richard Goyder has previously hinted that Joyce is supposed
to leave by the end of 2023 after steering the airline's recovery in the post-pandemic era.
But, there has been speculation that Joyce might go sooner,
given current circumstances and the lack of confidence from shareholders.
The rumors and news of the possibility seem to have sent airline leadership scrambling
to set the record straight. Indeed, in early November, Qantas chairman Richard
Goyder made it abundantly clear that he was delighted with Joyce's performance,
telling shareholders that finding capable airline executives is not easy.
Goyder repeated what he had previously said about a successor, stressing that
Joyce would continue to serve as CEO until at least the end of 2023.
"In due course, we will sit down and talk about what that timeframe looks
like. The board is confident that Alan has developed very capable executives,
and the board will scan externally as well."
Despite the reassurances, many Qantas customers are still unhappy with the way things have been
going with the airline. Hopefully Joyce, in his current position as CEO, can turn this around!
What do you think of this entire ordeal? Do you want to see Alan Joyce replaced?
Or should he be given more time to improve Qantas? Let us know in the comments below.