The ham-fisted rent-seeking attempts by Qantas shows that Joyce is focussed on receiving taxpayer largesse (via a government guarantee) rather than running his airline in the interests of the shareholder*. If he really thinks the Government should guarantee Qantas debt, he should have offered to receive a public-service level salary. He could be running a GBE rather than a company.
The Abbott Government should be congratulated for staring down these claims upon the public purse. It has properly offered to repeal the relevant sections of the Qantas Sale Act and all we got from Qantas was a claim that the carbon tax didn’t matter. At least until they found out a guarantee wasn’t headed their way.
Alan Joyce was appointed CEO of Qantas on 28 November 2008. In the six annual reports where his name appears, he has received remuneration of $26.7 million. The Qantas results over those years are at the bottom of this blog.
Joyce cannot be blamed for the Macquarie bank sponsored 2006-2007 Airline Partners debacle where there was a $5.45 per share offer which would have loaded Qantas with debt to the extent that it would have collapsed during the GFC. To some extent he cannot be blamed for the workplace agreements he inherited, and in the early days he did try to stare down the unions. But he has not persisted and the company has been run poorly since the GFC.
But he can be blamed (as should the Board) for the poor strategies that the airline has pursued since his appointment, including not following through with the 2009 Rudd-Government offer to amend the Qantas Sales Act to open its balance sheet to foreign ownership.
And look what has happened to the Qantas share price since 2007.
*Note: for those that will say that a government guarantee is in the interests of the shareholder, that is a very short-term perspective. Rent-seeking is not the way to ensure the productivity and growth of one’s company. Look at SPC Ardmona, Holden, Ford, Toyota etc. Government support merely cripples a company from innovating and ensuring that its workplace agreements are soundly based and in line with labour productivity growth.
While I don’t think the Government should ever offer a guarantee, if it wishes to, the guarantee should come with the condition that the executives of the company sign a document committing them to receiving public-service level salaries for as long as the company is in receipt of the guarantee.