Qantas chief takes 20pc pay cut
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Qantas chief takes 20pc pay cut
Tues The Australian
Qantas chief takes 20pc pay cut
Steve Creedy, Aviation writer
September 12, 2006
QANTAS boss Geoff Dixon took a pay cut of almost 20 per cent in 2005-06 as the carrier's annual profit slumped 30 per cent to $480 million last financial year.
Mr Dixon's total remuneration package for the year totalled $5.27 million, down from $6.48 million in 2004-05.
A Qantas spokeswoman said the difference was due to a reduction in Mr Dixon's bonus and the fact that the majority of his service payments were "previously accrued".
Mr Dixon's cash incentives fell from $1.49 million in 2004-05 to $1.01 million while his end-of-service benefits fell from $1.41 million to $465,000.
The airline's annual report showed that cash payments of $2.02 million, plus the $1.01 million in cash incentives and non-cash benefits of $289,247 brought Mr Dixon's short-term pay to $3.32 million, down from $3.6 million the previous year.
Post-employment benefits included $31,800 in travel, $100,587 in superannuation and $1.25 million in shares.
Qantas chief financial officer Peter Gregg was the next highest paid executive, with total benefits of $3.66 million, followed by Qantas executive general manager John Borghetti on $3.22 million.
Jetstar chief executive Alan Joyce's package totalled $1.423 million, with short-term payments totalling $888,341.
Media mogul James Packer, a director on the Qantas board, received $129,200 in cash and other benefits while former Defence force chief Peter Cosgrove received $203,291.
Chairman Margaret Jackson's package topped $530,000, including $447,617 in cash and almost $60,000 in non-cash benefits.
In its annual report, Qantas said its overarching goal was to achieve profit margins equivalent to its cost of capital.
It said it faced aggressive competition from mid-point carriers able to leverage significant cost and structural advantages such as lower labour rates, low or no taxation, cheaper financing, lower airport charges and accelerated depreciation regimes.
"Other legacy carriers are reforming, and that also has major competitive ramifications that we cannot afford to ignore," it said.
"We are confident, however, that the acceleration of reforms throughout the group will continue to improve productivity and efficiency and ensure that we remain a strong and successful global airline."
The report also reiterated that expanding the group's freight operations was a core strategy for Qantas.
It said the airline was moving to consolidate and then spin out its existing freight interests, and it remained interested in pursuing opportunities in the general freight market.
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Qantas chief takes 20pc pay cut
Steve Creedy, Aviation writer
September 12, 2006
QANTAS boss Geoff Dixon took a pay cut of almost 20 per cent in 2005-06 as the carrier's annual profit slumped 30 per cent to $480 million last financial year.
Mr Dixon's total remuneration package for the year totalled $5.27 million, down from $6.48 million in 2004-05.
A Qantas spokeswoman said the difference was due to a reduction in Mr Dixon's bonus and the fact that the majority of his service payments were "previously accrued".
Mr Dixon's cash incentives fell from $1.49 million in 2004-05 to $1.01 million while his end-of-service benefits fell from $1.41 million to $465,000.
The airline's annual report showed that cash payments of $2.02 million, plus the $1.01 million in cash incentives and non-cash benefits of $289,247 brought Mr Dixon's short-term pay to $3.32 million, down from $3.6 million the previous year.
Post-employment benefits included $31,800 in travel, $100,587 in superannuation and $1.25 million in shares.
Qantas chief financial officer Peter Gregg was the next highest paid executive, with total benefits of $3.66 million, followed by Qantas executive general manager John Borghetti on $3.22 million.
Jetstar chief executive Alan Joyce's package totalled $1.423 million, with short-term payments totalling $888,341.
Media mogul James Packer, a director on the Qantas board, received $129,200 in cash and other benefits while former Defence force chief Peter Cosgrove received $203,291.
Chairman Margaret Jackson's package topped $530,000, including $447,617 in cash and almost $60,000 in non-cash benefits.
In its annual report, Qantas said its overarching goal was to achieve profit margins equivalent to its cost of capital.
It said it faced aggressive competition from mid-point carriers able to leverage significant cost and structural advantages such as lower labour rates, low or no taxation, cheaper financing, lower airport charges and accelerated depreciation regimes.
"Other legacy carriers are reforming, and that also has major competitive ramifications that we cannot afford to ignore," it said.
"We are confident, however, that the acceleration of reforms throughout the group will continue to improve productivity and efficiency and ensure that we remain a strong and successful global airline."
The report also reiterated that expanding the group's freight operations was a core strategy for Qantas.
It said the airline was moving to consolidate and then spin out its existing freight interests, and it remained interested in pursuing opportunities in the general freight market.
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Good on ya Geoff,
great to see you're prepared to do it tough for the good of the company!
I'm sure no one in their right mind will dare complain about the next round of pay cuts you have in store for them.
great to see you're prepared to do it tough for the good of the company!
I'm sure no one in their right mind will dare complain about the next round of pay cuts you have in store for them.
What a crock. The article is more interesting for what it left out than the information it contains...
Yet more spin from the management at QF. I guess now GD feels happy that he appears to be doing everything he can (on the surface) - after all, HE took a cut in his overall package (according to the article) while ALL staff got paid a bonus (meagre as it was) - so how dare those pesky staff compain....?
Yet more spin from the management at QF. I guess now GD feels happy that he appears to be doing everything he can (on the surface) - after all, HE took a cut in his overall package (according to the article) while ALL staff got paid a bonus (meagre as it was) - so how dare those pesky staff compain....?
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Crikey explained it today:
Qantas’s Claytons pay cut for the inner sanctum
Michael Pascoe writes:...
The "Oz headline" paints a picture of Qantas's CEO sharing the pain of his shareholders and workers with a 20% pay cut. You have to read well down in the body copy of the "Smage version" to find that’s not quite the case.
And that means the area in which Qantas runs at its biggest comparative disadvantage against its main competitors is the pay packets of its top few executives.
Geoff Dixon’s pay for the past year fell from $4.5 million to $3.1 million, but his CFO and heir apparent, Peter Gregg, still managed a slight rise to $3.7 million. Hang on, that means the CFO was paid more than the CEO?
No.
The kicker is that Dixon and Gregg both received very handsome benefits for signing up to new contracts last month – more than compensating for Geoff’s salary dip last year. As Scott Rochfort reports: "Mr Dixon was put on an 'ongoing' contract, where he was paid a $7.7 million 'benefit' in the form of a superannuation contribution. Mr Gregg was paid $4.5 million in cash for renewing his contract."
And Qantas’s number three man John Borghetti also did nicely, his remuneration jumping from only $1.8 million to $3.2 million.
No, those at the top are not sharing the pain of customers, shareholders and mere workers during these harder times of high fuel costs. Nothing changes.
Michael Pascoe writes:...
The "Oz headline" paints a picture of Qantas's CEO sharing the pain of his shareholders and workers with a 20% pay cut. You have to read well down in the body copy of the "Smage version" to find that’s not quite the case.
And that means the area in which Qantas runs at its biggest comparative disadvantage against its main competitors is the pay packets of its top few executives.
Geoff Dixon’s pay for the past year fell from $4.5 million to $3.1 million, but his CFO and heir apparent, Peter Gregg, still managed a slight rise to $3.7 million. Hang on, that means the CFO was paid more than the CEO?
No.
The kicker is that Dixon and Gregg both received very handsome benefits for signing up to new contracts last month – more than compensating for Geoff’s salary dip last year. As Scott Rochfort reports: "Mr Dixon was put on an 'ongoing' contract, where he was paid a $7.7 million 'benefit' in the form of a superannuation contribution. Mr Gregg was paid $4.5 million in cash for renewing his contract."
And Qantas’s number three man John Borghetti also did nicely, his remuneration jumping from only $1.8 million to $3.2 million.
No, those at the top are not sharing the pain of customers, shareholders and mere workers during these harder times of high fuel costs. Nothing changes.
Nunc est bibendum
For those of you who may be a bit younger and so missed the stuff about superannuation, keep in mind that if Geoff retires from 1 Jul next year that Super is TAX FREE! 
They must think we're idiots to swallow garbage like what Creedy served up in his article!
The 'public' on the other hand..... 
They must think we're idiots to swallow garbage like what Creedy served up in his article!
The 'public' on the other hand.....
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Lets put it into perspective here:
-27% Decrease in annual profits
+76% Pay Increase to JB
+6% Pay Increase to Chairwoman MJ
-20% Decrease to GD in Bonus & Incentive payments
-50% Decrease to staff Bonus.
Share the pain hey?
-27% Decrease in annual profits
+76% Pay Increase to JB
+6% Pay Increase to Chairwoman MJ
-20% Decrease to GD in Bonus & Incentive payments
-50% Decrease to staff Bonus.
Share the pain hey?
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Just a point
I am not going to argue the emotions here, but GD did not "TAKE" a pay cut, he was paid according to the term of his employment agreement.
I do not see anyting voluntary about it. If he elected to say...."dont pay me any bonus at all", even though the terms do say he gets some, albeit reduced, then you would be correct in saying he TOOK a pay cut.
Why large companies never see this I dont know, but if everyone received a bonus based on group performance (bonus=%of base salary for example), people would work together and those seemed or deemed to be leaching the system would soon have the heat on them.
Going away now......back in the corner!
Cheers
J
I do not see anyting voluntary about it. If he elected to say...."dont pay me any bonus at all", even though the terms do say he gets some, albeit reduced, then you would be correct in saying he TOOK a pay cut.
Why large companies never see this I dont know, but if everyone received a bonus based on group performance (bonus=%of base salary for example), people would work together and those seemed or deemed to be leaching the system would soon have the heat on them.
Going away now......back in the corner!
Cheers
J
I am reliably informed that a form of hedging, not unlike that for fuel, is available to protect the future value of shares allocated with trading lock to executives. Hence, it matters little what these morons do to the company, their share bonus is protected. Seems to be sailing dangerously close to the wind for those providing the hedge - what information is supplied to them about the company and it's future directions to enable a fair price for the risk to be struck?
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J430 I agree with you. This reads like he was paid in accordance of what he was owed in the contract. Poor ol Geoffs own pocket has been hit hard by fuel prices. I'm sure the FAAA are just dying to help to the poor bloke out. Maybe there are a few retrenched Heavy Maintenance Engineers that could help out ol GD. From my recolection GORDON BETHUNE the former CEO of Continental Airlines took a reasonable pay cut of his own as well as his managers at the same time as he asked for a pay cut from his workers. When it has to happen (debatable) its nice to see the top brass leading by example.
