Do as I say not as I do
QANTAS TOP DOGS SIGN UP FOR MORE
Henry Byrne
Australian Financial Review – Wednesday 9 August 2006
Qantas’s two most senior executives have together pocketed $12.2 million in entitlements after finalising contract arrangements to extend their roles with the airline.
Chief executive Geoff Dixon has signed a rolling contract replacing an existing contract, which was due to expire in July next year.
Under the new contract he will receive a $7.7 million superannuation contribution stemming from a termination provision under his old contract.
The chief financial officer and head of strategy, Peter Gregg, has also agreed to a rolling contract when his present contract expires later this year.
He will also have his existing entitlements amounting to $4.5 million paid out.
Mr Gregg, alongside the executive general managers of the Qantas and Jetstar flying groups John Borghetti and Alan Joyce, is considered to lead the field to replace Mr Dixon who has indicated he may step down in late 2008.
Qantas chairwoman Margaret Jackson insisted nothing about the company’s succession planning should be read into the latest announcement.
“Nothing has changed apart from the fact that I think Peter is an outstanding executive and I’m pleased that we’ve got these two executives re-signed and leading Qantas,” Ms Jackson said.
She said she was delighted the two men had signed their new contracts when the challenges in aviation had never been greater.
Qantas expects fuel costs to be $1 billion higher after hedging in the financial year ended on June 30, and up another $1 billion the following year.
In June, Qantas warned full-year pre tax profit in 2005-06 would be about 27 per cent lower than in 2004-05 at about $670 million. Qantas shares closed 3c higher at $3.07 yesterday, but they remain 27 per cent lower than a 52-week high of $4.18 reached on February 24.
Mr Dixon has been Qantas chief executive since March 2001 and Mr Gregg has been with the airline since 2000.
Under the terms of his new contract, Mr Dixon will be paid fixed remuneration of $2.3 million and performance-linked payments including up to $1.4 million in cash, as well as Qantas shares under both medium and long-term incentive plans.
Under the termination provisions of the new contract Mr Dixon is entitled to 12 months notice from Qantas, while he is required to give the airline six months notice if he ends the contract.