Does Qantas seem to be protesting too much?

In a very speedy reaction to an article that appeared in the Sydney Morning Herald this morning saying that Qantas chiefs would be receiving $91m if the APA deal goes through, Qantas said today that the Sydney Morning Herald (SMH) had overstated by more than $23 million the value of accelerated equity to be granted to the Qantas executives.

Qantas Executive General Manager People Kevin Brown said that Geoff Dixon and his 10 senior managers would be reinvesting $36 million in the new company – not $91 m as stated in the SMH – equating to 1% of the opening equity.

Mr Brown said that, as outlined in the Bidder’s Statement, APA had agreed to provide loans to the management team which would increase the value of their invested equity by up to 4.5%, depending on very stringent performance hurdles over five years, adding “Qantas executive managers are simply moving from one Long Term Incentive Plan to another”.

Mr Brown said that in relation to the particular examples noted by the SMH:

** Geoff Dixon would be entitled to $5.4 million in accelerated equity, which he would invest in APA – SMH said $8m – The Mole reckons when you get to that level to odd $3m might not matter that much – It is still a heap of money which could have provided Aussies with lower air fares and workers with a better deal!

** Peter Gregg would be entitled to $4.5 million in accelerated equity, which he would invest in APA – the SMH said $5m, so what’s 500k between friends!

** In both cases, the executives would not receive the amount in cash on their last day under current ownership, but would roll it into a new incentive scheme.

In Qantas’ interesting reaction to the report Mr Brown says, “The inflated figures quoted by the SMH appear to include shares and rights from previous incentive plans dating back as far as 1999, for which performance hurdles have already been met.”

The Qantas response goes on to say that the Chairman of Qantas, Ms Margaret Jackson, said the SMH had also referred to a $60 million amount as both a long term incentive and a performance fee for Geoff Dixon adding, “In fact, Geoff Dixon made a personal announcement in December 2006 gifting the entire share of the Long Term Incentive Plan provided to him by APA to a charitable trust, which he openly acknowledged could be valued at up to $60 million depending on Qantas’ performance over five years.”

Ms Jackson said the Qantas Board had received independent remuneration advice from PricewaterhouseCoopers on the treatment of executive shares and rights in the event of a successful takeover, but she did not comment on the fact that Geoff Dixon failed to mention the $8m he would receive on the takeover at the time of the statement about his generous gifting!

Perhaps when you deal in such large sums every day you become desensitised to it all, but to the average man in the street in Aus there must surley be a tinge of obscenity to it all in how people like the Qantas managemtn team can make such huge sums of money in scenarios like this working for a company when they have taken little or no personal risk. 

Me thinketh they prostesteth too much!

Hey Qantas how about coming totally clean and telling us how much each and every one of the senior exec team is actually going to receive?

Report by The Mole