GD..Under performance, greed & incompetence?
I had the aggravating experience of hearing this corporate goose in action on Monday. It is almost embarrassing to listen to this smooth tonged board room lizard languish in his despot style of control. Let's face it Qantas hasn't exactly been the leader in maker the right corporate decisions over time. More than external incidents have left the Q holding the golden goose. Let me say at this point this attack on GD is from a corporate performance level and his ethical corporate standards, I am sure he would be a great guy to have a few beers with and the watch Turvey Park take on Temora at Wagga Oval but his under performance and almost unethical treatment of staff and stakeholders is unbelievable. I ponder where could Qantas have been today under a Gerry Harvey type performer.
The most distasteful conduct by GD has been his continuous degrading of Qantas and the competitive nature of our industry. Year after year the staff and shareholders endured 911, Sars, Oil, Low Cost Carriers yet surprise surprise the profits continued to flow at industry high levels. Qantas made the reports in both aviation and financial periodicals. Yet trusty GD continued the doom and gloom philosophy to ensure he kept wages pressure low in all segments of his employ. Then came the statement that staff and customers were of little concern, shareholders were #1 and after yesterday continue to be number one. This attitude against all mainstream corporate icons who valued there staff's skills, loyalty committed to a corporate social responsibility.
Add to that the insatiable remuneration appetite that the hierarchy has maintained. Up to and including 2005 I recall the average staff wage increase was less than 3% per annum. It that stage the executive board members had increases of 14-30% p.a. Yes per annum I said. While we have seen similar headlines in corporate Australia nothing would match the unequal treatment of staff and executives that was happening at the red room. Unfortunately there were no Ricardo Semler, Gerry Harvey or Richard Branson amongst Q executives, nor a drop of ethical standards or the fairness, our fathers and probably their fathers embraced as founders of this great country of ours.
This recent comparison using 2007 Annual reports shows the more evidence of the under performance and over rewards occurring within the big Q. The much smaller competitor of Qantas, Virgin Blue is a simple example of the greed that exists in one boardroom while not in another. Don't get me wrong rewards can be used effectively if used fairly.
Revenue V: 2169m Q: 15165.7m Qantas yards ahead, as we would expect.
Net Assets V: 743.5m Q: 6195m
Profit achieved to Net Assets V: 29% Q: 11.6% (Less than half) This shows how efficiently net Assets were utilised to produce a profit. BG outperformed GD by a country mile.
Cash flow from Operating Revenue V: 18.7% Q:15.5% Obviously cash flows in service industry should be high however again BG get more from his staff than GD.
Profit from Revenues V: 9.9% Q: 4.7% Once again BG outperforms GD by more than double finding more profit from available revenue in percentage terms.
KPI of CEO remuneration to profit/rev (Note the lower the better)
V: 13.78 Q: 141.35 Finally the reward meter. The higher the number the more the CEO remuneration is nonaligned with declared profits.
Say no more..... GD don't expect an invite to Australian Story. GD you are very average.
So what can be done. Not much actually. Shareholders have observed a CEO undersell an iconic company only to be caught out by other greed players who wanted to have two bites of the pie at the last minute. The whole plan collapsed and the share price rose to where is should have been before a takeover offer. MJ fell on her sword and now GD takes the accolades for the price rise. (give me strength) This occurred in a political environment where similar parallels have occurred. Business has grown, profits have soared, investment is at all time highs. How is your bank account? Can your sons and daughter afford their first house? Why is it we have low interest rates but high cost of living and less disposable income. Because the GD philosophy is not isolated. Where has this economic boom taken us? Do you see your family and friends more, do you have more holidays, has your quality of life climbed at the same rate as the economic boom that Mr Howard would suggest?
Staff will continue to be compared to a lower labor cost models from under developed countries and outsourcing staff will continue in technical and non-technical areas. The 787 and 380 will likely been maintained overseas of by a third party. Qantas staff numbers will recede while Jetstar business will grow. Contract work will also grow. GD will move on shortly and enjoy his retirement. His legacy will be shareholders stand above all other stakeholders in a business, above staff and customers. He will be remembered as the CEO who took the 'home' out of Qantas. He, who took the 'spirit' from our company.
Who will we remember? We will remember those Australians with compassion for the social structure and individuals, achievers in sport, medicine and business, the compassionate ones who gave without expectation. Watch Andrew Denton's "Enough Rope" occasionally, it will give you faith in our wonderful country but don't expect GD as a surprise guest.