Are major airline top brass salary packages acceptable or a bit peeving?

[Melburnian1]

'The Age' highlights AJ's (at QF) 2012-13 salary package, which is quite complex:

Qantas chief Alan Joyce gets $1m raise

Do AFFers largely take the view that since it's private enterprise, the QF Board can pay AJ (and the DJ board can pay John Borghetti) plus other senior executives what they like given that they are running billion dollar plus in annual turnover enterprises with a mix of government and non-government shareholders (for instance, QF may have the Federal Government's Future Fund as a shareholder, while VA has some 'government' airlines such as EY as shareholders)?

Or is it at least a little annoying to see these sorts of salary packages on offer given the dismal financial performance of both these airlines?

Is it a case of 'pay peanuts and you'll get monkeys' or are these salaries and bonuses, plus other entitlements, out of step with what you think is reasonable?

 

[Fantic125]

I think it's reasonable.

Personally, I wouldn't even bother getting out of bed for less than $1.2m a year.

 

[Burrito]

Agreed. Reasonable

 

[mono88]

Is it a case of 'pay peanuts and you'll get monkeys' or are these salaries and bonuses, plus other entitlements, out of step with what you think is reasonable?[/QUOTE]

The trouble is also that like a lot of companies/govt organisations in Australia " they pay a fortune and still get monkeys"
I don't have a problem with a reasonable base salary, and it should be reasonable not outlandish; it is some of the ridiculous bonuses that are an issue and help cause airfares to be higher than need be.

 

[Jeffrey O'Neill]

From what I've red there's little to no correlation between CEO pay and performance.

It does seem to be an Anglosphere issue in that CEO pays are now 350+ times average worker rates. Japan is something like 70 and europe around the 150 times.

If you look to the USA the median wage has been stuck at 500 USD for the last 10 year. the only wage growth has been occurring for those on 100K+. That's a very small part of the population.

What gets me is these CEOs take all the praise when profits rise, but there's any number of excuses when profits fall or don't meet expectations.

 

[Melburnian1]

In QF's case there must be some shareholder anger that the company has not paid a dividend for four years, and that its share price has dramatically declined despite what has in sectors such as mining until recently been boom time conditions.

A drop from $3.13 to $1.36 in five years is very marked. When the time value of money is added in, it's even worse.

In contrast during the same period VA's share price has climbed from a measly 27 cents to 42 cents, but it has been a wild ride.

It's fair to say neither has been a good investment, yet these CEOs always claim that 'improvement is just around the corner.' Of course, they are running multi billion dollar enterprises, although QF's revenue is much higher than VA's.

 

[marki]

In QF's case there must be some shareholder anger that the company has not paid a dividend for four years, and that its share price has dramatically declined despite what has in sectors such as mining until recently boom time conditions.

A drop from $3.13 to $1.36 in five years is very marked. When the time value of money is added in, it's even worse.

In contrast during the same period VA's share price has climbed from a measly 27 cents to 42 cents, but it has been a wild ride.

It's fair to say neither has been a good investment, yet these CEOs always claim that 'improvement is just around the corner.' Of course, they are running multi billion dollar enterprises, although QF's revenue is much higher than VA's.

Totally agree. I do think AJ is getting long in the tooth and needs replacing by fresh candidate. QF still shoot themselves in the foot.

 

[Awesom Andy]

It's fair to say neither has been a good investment

I don't think airlines have ever been good investments to start with...

 

[pauly7]

Qantas and Virgin Au don't pay anywhere near the top brass equivalents in my main place of employment and sometimes I think running those airlines would be a hell of a lot harder

 

[SeatBackForward]

What gets me is these CEOs take all the praise when profits rise, but there's any number of excuses when profits fall or don't meet expectations.

On the way up, they get rewarded for results, on the way down, they get rewarded because if it weren't for their "risk management"-it would've been much worse.

 

[amaroo]

That's nothing - check out what the average Vice Chancellor earns......

 

[Buzzard]

A close friend, his late father was the CEO of a French multinational company. Told me many times that that the pay given to Australian and American CEO's was disgusting. He always maintained it was not his money but that of the owners (shareholders) and he had to be responsible with it. Even drove a Peugot when he could have had any car. I had the greatest respect for that man.

 

[Nizar]

Told me many times that that the pay given to Australian and American CEO's was disgusting.

I don't really think you can lump "Australian and American CEO's" like that.
Australian top listed companies' CEOs generally make $4-8m a year.
US top listed companies' CEOs generally $15-30m+

 

[Buzzard]

I don't really think you can lump "Australian and American CEO's" like that.
Australian top listed companies' CEOs generally make $4-8m a year.
US top listed companies' CEOs generally $15-30m+

I guess the late Mr.D even thought that $4-8m a year was way too much for a CEO.

 

[mono88]

I guess the late Mr.D even thought that $4-8m a year was way too much for a CEO.

Particularly if he is not getting that much.
You sometimes hear arguments that when the ALP legislated to have detailed disclosure of the salary packages of the top employees some years ago, all these CEO's suddenly saw that everyone else was getting more than them and, as you do,they started demanding more pay. The Boards of Directors folded and suddenly there was a CEO salary spiral.
So what started as giving more information and transparency to shareholders resulted in a salary explosion. Could it be that sometimes too much information is more than enough?

 

[Melburnian1]

mono88, do you mean 'everyone else overseas?' or 'some other executives in Australia?'

 

[Simo]

I don't have any issues with CEO or anyone getting huge pays.

My issue is when the business has run at a loss and they still get bonuses.

 

[Melburnian1]

Simo, what's your view when companies such as QF or VA make small profits after deducting tax, depreciation and so on? VA made a loss. QF made a tiny profit but it way below what the shareholders could collectively receive (in theory) by putting all QF's capital on the short term money market instead. Should CEOs or others receive bonuses then? presumably neither airline met its Board's target earnings performance.

 

[Simo]

Simo, what's your view when companies such as QF or VA make small profits after deducting tax, depreciation and so on? VA made a loss. QF made a tiny profit but it way below what the shareholders could collectively receive (in theory) by putting all QF's capital on the short term money market instead. Should CEOs or others receive bonuses then? presumably neither airline met its Board's target earnings performance.

As long as the wage doesn't affect profitability/shareholder dividends.

A large qty of his wage would be pre profit figure.

Wages bonuses have lots of complications and also many parts to make it all happen.

When we do our bonus structures up at work some of the bonus's are very good once you achieve certain targets.

We have bonus's from our supplier and we can not actually get all of our targets but get certain key points and achieve a decent figures as they have a huge weighting to the organisations.

I ran a target for a client for purchase and we had a breakdown on certain products. The products with higher margin and also key to winning market segments we had a higher%%% of bonus.

My client got a lot of his performance indicators and we gave him a 6 figure cheque back.

 

[JohnK]

A lot of these salary are obscene.

No wonder they have lost touch with the average person who struggles to get a 3% yearly increase.