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my oleo is extended
7th Oct 2009, 09:39
Nice work :
Can anybody please explain how a CEO can,with conscience, earn a multi million dollar package while the company posts mega losses, share value is downgraded( original listing at around $2.65,now around $0.38 AUD) and the list of incompetencies goes forever ? Its not an argument here, just a simple question,thats all ?

Virgin boss takes $500,000 haircut
Article from: The Australian (http://www.theaustralian.news.com.au/)
VIRGIN Blue may avoid the executive pay debate engulfing Qantas because its chief executive's package fell almost 20 per cent last financial year.
Brett Godfrey's 2008-09 pay package fell from $2.36 million to $1.89m, with his base pay staying the same at $826,000 but his cash bonus dropping from $471,000 to $281,00 and the value of share-based payments falling from $962,000 to $683,000. He also had a $100,000 superannuation payment.
The airline's annual report shows other senior executives also took a haircut as the airline's profits were pummelled by the global financial crisis and the cost of launching V Australia.
This included chief financial officer Keith Neate, whose package fell from $1.07m to $833,000, and V Australia boss Scott Swift, who saw his remuneration fall from $745,000 to $568,000.
Departing executive Stefan Pichler earned $778,000 in 2008-09 compared with $1.36m the previous year.
Virgin Blue recorded a net loss after tax of $160m in 2008-09 but its shares and those of rival Qantas have started climbing amid suggestions traffic and fares might improve.
Mr Godfrey told reporters attending Virgin Blue's ninth birthday celebrations on Wednesday that things were looking up.
"The market is starting to turn, and we'll be a major beneficiary," he said. "Assuming the momentum we're seeing continues to build, I think we'll see at Christmas time fares start to return, maybe not to prior levels."
Mr Godfrey has expressed confidence on several recent occasions that Virgin Blue is well placed to take advantage of a turn in the economy and this was reiterated in the annual report by chairman Neil Chatfield.
"We are satisfied that through a series of early actions and structural and strategic response to the GFC, the Virgin Blue Airlines Group is now in a good position to take advantage of market and economic recovery," Mr Chatfield said. He also expressed confidence in V Australia's potential despite its "less than optimal launch timing".
"Our revised fleet and network strategy for the new airline, including new routes to Phuket and Johannesburg and Melbourne-Los Angeles, combined with our proposed Virgin Blue/Delta Air Lines joint venture, will further improve the airline's opportunities," he said.
The annual report sticks with the previous outlook, with the airline expected to break even in financial 2010 and that it will remain cashflow positive if the current market conditions are maintained. "Further asset realisation is planned for the current fiscal year and (this) -- together with a forecast net cash inflow for fiscal 2010 -- will see the cash position of the group improve over the next year," it said.
"With funding in place for the majority of the forecast $440m in capital expenditure for fiscal year 2010, this puts Virgin Blue in a strong position to move quickly when the markets recover and will enable the business to leverage existing under-utilised operating capacity."

7th Oct 2009, 09:51
Because he and SRB hold most shares.

7th Oct 2009, 11:13
Nice to see BG reckons the market is turning, good to see a CEO anticipating the positives in that, having weathered bad times and less-than-opportune launch conditions in some divisions, strong growth should be anticipated and expected!

Same story for Tiger Oz, really, when you think of it.

Now..........if memory serves me right wern't Tiger advertising for flight deck crew recently?? ;)

What do they, and BG, know??

As a sideline seems SQ are going great guns with the A380, one wonders if there might be a few B777's spare in SQ which would benefit from being leased out??

Of course no need to worry they could ever end up in Tiger Oz because there's little experience in Tiger Oz above C152...well maybe C172 if you really, really want to be generous - so that covers that! :ok:

7th Oct 2009, 18:16
NOt sure about the lack of experience at Tiger - I just applied with 13000hrs, >5000 heavy command , rated B777 captain and A330/340 captain both on my Ozzi licence and they were not interested 'cos I was not current on the A320... so they must have the guys interested that do have what they want?...W

By George
7th Oct 2009, 20:59
An ex SQ Aussie Capt with over 20,000 hrs has just joined as an F/O, so people who think Tiger have 'C150' time just make themselves look a fool.

8th Oct 2009, 05:51
By George you certainly haven't followed any previous threads regards Tiger Oz have you??

Sorry about the gentle irony being too gentle. ;)


8th Oct 2009, 07:06
No reason why a CEO and team should not be rewarded for managing a downturn well.

Most CEO type contracts do not simply reward or punish movements in share price.

Typically they set internal targets, but then add rewards for outperforming competitors over 1, 3 and 7 year periods. They also look at the share market performance of same nation companies across all classes of business.

That's how Dixon's package was structured, and Joyce's is the same. (Read QF Annual reports, it is all out in the open)

So if your share price drops 20% in 12 months, but average IATA drop is 65%, and the Top 50 Australian businesses by market capitalisation drop 40%, then you are rightly in line for a bonus for managing the downturn better than your peers.

Can't fault it.

Try and come up with a better plan. Losing money in a GFC is not, in itself, an indicator of poor management.

my oleo is extended
8th Oct 2009, 12:22
GFC isnt the only factor involved here. Incompetent decisions such as Managements structure, hedging, failure to fill in aircraft warranties and the list goes on started well before the GFC started.
Your comment is like saying that Ansett went into oblivion only due to its Xmas and Easter groundings, 9/11 and VB`s start up in AUS ? Dont think so, the ball started to roll many years before it folded.Same will happen at VB.

By George
8th Oct 2009, 19:41
Sorry Galdian, I see what you mean, due to the 'Recession' I am too busy flying these days.

8th Oct 2009, 21:44
As a former CEO who has taken on more than one dying company and attempted resuscitation, I can tell you that the pay is justified, it's a thankless and painful task.

I am aware of One or Two CEO's who have been handed a gigantic paycheck who didn't deserve it, but not many. One of them was GD.

rescue 1
9th Oct 2009, 06:07
I can tell you that the pay is justified, it's a thankless and painful task.
I agree Sunfish - and unfortunately so many contributors to this forum think they can do it better, but never step up to try. It's much easier to moan on anonymous forums or in the bar than walk the talk. :ugh:

porch monkey
9th Oct 2009, 06:47
Hey oleo, you really are trying for the VB police award, aren't you? Get over it. They rejected you for a reason it seems. The "Broke in 6 months" line is over there. Take a packed lunch and go join the end of it.

my oleo is extended
9th Oct 2009, 10:30
Porch Monkey.What can I say, you got me.I am wrong, so sorry.
I shall now leave you to get on with your future accomplishments in a progressive and financially stable Airline. Cheers my friend.

porch monkey
10th Oct 2009, 02:48
My friend, (I'm ok with that, as we've now been introduced), they are no more or less financially stable nor more or less progressive that many other airlines in the world. Which is why your sudden penchant for slagging a company that provides employment for aussies is somewhat misplaced. They are corporatively speaking no better or worse than others, and I have worked in many worse spots. As slice pointed out on another thread, most of us are under no illusions as to the management prowess of our employers, (or in some cases their honesty), however, I don't see you speaking of the likes of Dixon et al in the same vein. Kind of indicates you to be a man on a mission so to speak.

Anyway, all the best. Life still looks good from the front windows.