The Dixon millions double up

[Platy]

Dixon enjoys doubling in pay to about $12 million at a time of executive wage freeze:

Qantas chief pockets $12m | smh.com.au

 

[simongr]

Be interested to see the basis for the increase. I assume there was some element of performance related in relation to the overall profitability of the airline. I would assume it is not based on share price given the lack of ability of the CEO to directly impact the share price apart from on financial performance.

 

[Platy]

Be interested to see the basis for the increase. I assume there was some element of performance related in relation to the overall profitability of the airline. I would assume it is not based on share price given the lack of ability of the CEO to directly impact the share price apart from on financial performance.

Indeed, Simongr, in fact my impression was that there was a share price component and he was very lucky his "wage" was assessed before the recent share market rollercoaster...but can't verify so yes would be good to find out how the package is calculated.

Aren't CEO's performances judged (in part) on share prices (rightly or wrongly)...?

 

[oz_mark]

Obviously they adjusted the pays before the 'freeze' in May was announced.

 

[Platy]

There is some more info in the following article, including comparisons with the packages of other airlines bosses:

Dixon in the $10m high club | smh.com.au

It claims Dixon is the second highest paid in the world and shows that his package dwarfs that of many others...amazing when he handled the private equity deal so abyssmally...

 

[oz_mark]

There is some more info in the following article, including comparisons with the packages of other airlines bosses:

Dixon in the $10m high club | smh.com.au

It claims Dixon is the second highest paid in the world and shows that his package dwarfs that of many others...amazing when he handled the private equity deal so abyssmally...

He was just lucky that the shareholders protected him from his folly (whether that was their intention or not)

 

[JohnK]

I cannot see any justification for ridiculous increases in salary. A 100% increase? So Qantas did not want to grant the engineers the type of salary increase they wanted and in turn caused havoc to travellers all over the world so they can have enough to increase the executive salary pool. Wow!

When will this joke that is called executive salaries end?

 

[NYCguy]

When will this joke that is called executive salaries end?

Go easy!!!:shock:

Blame the Board, aren't they the ones who approve bonuses? Or at least write approve the contracts which allow for said bonuses?

I mean, it's not like it was $450 million bonus like Richard Fuld from Lehmann's... A sum which some top-flight Hedge-fund managers were easily exceeding, even doubling, a few years ago.

 

[simongr]

Shareholders demand profits from the Board. The Board recruits CEOs who can find operational managers to deliver profits. CEOs get paid based on the profits they are tasked to deliver and find people who can deliver.

People bitca and moan about exec salaries and at the same time complain when their pension funds aren't delivering the returns they want.

It's not execs driving salaries - it is shareholders.

When will this joke called exec salaries end? When all industries are nationalised and everyone works for the greater good - because that worked well in communist economies like the Soviet Union (people freezing to death), China (now more consumer based than the west) and North Korea (people starving).

If shareholders did not demand profits from companies and pay managers based on that then Execs would not be paid so much.

 

[Starship]

Margaret Jackson (Chairwoman) did fall on her sword after the Private equity bid fell over.

As with the banks bailouts, we are privatising profits and socialising debts!

I am wondering however - what was the outcome of the collusion case (cartel pricing) in the US over freight that Qantas / Dixon was implicated in?

 

[simongr]

I am wondering however - what was the outcome of the collusion case (cartel pricing) in the US over freight that Qantas / Dixon was implicated in?

Have you at least bothered to google it?

 

[Starship]

Have you at least bothered to google it?

Thanks Simon, yes but appears to be still open. Maybe i did not frame my question correctly.

In march, Qantas paid US61m as a plea bargain to the US courts, but left the Senior exec in the hot water and he was jailed in May.

But the real sleeper in the woodpile is the 'class action' that a whole heap of customers were putting together, that could make the 61m fine look tame.

I presume this is still on foot, and will take a long time to hit the courts.

 

[JohnK]

I am sorry. I did not realise that ridiculous executive salaries were so easily justified....

 

[oz_mark]

As with the banks bailouts, we are privatising profits and socialising debts!

The bail-outs are about protecting the clients. In many cases the shareholders have lost a lot of money.

 

[Starship]

The bail-outs are about protecting the clients. In many cases the shareholders have lost a lot of money.

Mark - as an ex banker / director of a stockbroking firm, i agree that the support / bailouts are necessary to maintain a semblance of order in the market and not let it go into freefall - to protect a range of stakeholders [clients / shareholders]. The current scenario is frightening!

A lot of people have lost significant money in the recent crisis, including myself - but my comment was more in relation to the fact that many of the people who have not benefited on stocks on the way up, are now having to contribute to the solution.

 

[oz_mark]

Mark - as an ex banker / director of a stockbroking firm, i agree that the support / bailouts are necessary to maintain a semblance of order in the market and not let it go into freefall - to protect a range of stakeholders [clients / shareholders]. The current scenario is frightening!

A lot of people have lost significant money in the recent crisis, including myself - but my comment was more in relation to the fact that many of the people who have not benefited on stocks on the way up, are now having to contribute to the solution.

I have no issue with a properly structured bail-out where the shareholders and managers do there money, but the clients are protected. Seems to happen sometimes (e.g. when a bank is sold off to another at fire-sale price the shareholders value is diminished, and the management is shown the door, but the customers are protected)

If the bail-outs by the government are properly structured (e.g. govt invests, but gets any profit distributions in front of other shareholders), then it may be ok. Not sure that all the proposals are like that though!

 

[mainly tailfirst]

Mark - as an ex banker / director of a stockbroking firm, i agree that the support / bailouts are necessary to maintain a semblance of order in the market and not let it go into freefall - to protect a range of stakeholders [clients / shareholders]. The current scenario is frightening!

A lot of people have lost significant money in the recent crisis, including myself - but my comment was more in relation to the fact that many of the people who have not benefited on stocks on the way up, are now having to contribute to the solution.

Yet another example of "Privatise the Gains and Socialise the Losses". Shall be interesting to see what legislation comes as a result of this crisis.

mt

 

[Starship]

Yet another example of "Privatise the Gains and Socialise the Losses".

mt

Getting a sense of deja vu here!

If you are still in the US MT, you must be seeing some angst in the valley! [amid all the pre-election nonsense]

 

[mainly tailfirst]

Getting a sense of deja vu here!

If you are still in the US MT, you must be seeing some angst in the valley! [amid all the pre-election nonsense]

S'funny you say that - it's reminded me of Yogi Bera or something. I didn't read the whole thread before I posted, just the last couple of posts - oops
I cut this from my above post to keep it succinct - maybe I should have just stuck with it instead.

"It was amazing to see the reaction of the average punter here when the bailout was announced. You had Reaganist Republicans (a few of them in the Valley agreeing completely with NorCal Liberals (a few of them as well) that the Government should butt out and let natural Capitalism take its course. Add to that the effects of the VC funding evaporating, then you really understand why engineers hate East Coast finance types."

Aside: At lunch a couple of weeks ago, I made a joke about moving from a country where socialism meant welfare for the poor to another where it meant welfare for the rich... and now I understood why Americans hated the word. Not many people laughed

As for the election, that is a rant for another time. It does make one appreciate the efficiencies of the AEC, even if it does take a week to declare a state election in WA!

mt

 

[oz_mark]

Yet another example of "Privatise the Gains and Socialise the Losses". Shall be interesting to see what legislation comes as a result of this crisis.

If a company reaches the point of failure it is essential that those who stood to gain in its success, lose out in the aftermath of the failure. My observation of banks in the US is that the course of actions usually involves a forced sale of the business of the bank to another bank for a "negotiated" price, which means:

1) wipe out the shareholders
2) get rid of the board/management
3) distribute the losses

What I think the architects of the US bailout tried to do was to avoid the above, by buying out the problem childs.