Low cost – low perks – high cost – hi perks?
A report in The Australian says that Executives at major airlines are reaping the benefits of the industry’s “sweet spot”, but while no one is leaving the party poor, the extent of the windfall varies.
With annual reports now out from both Qantas and Virgin Blue, a comparison of executive compensation shows that Qantas executives and directors still far outstrip their Virgin Blue counterparts when it comes to reaping rewards.
Executives charged with running the bigger airline, which is seven times the size of Virgin in terms of revenues, were better remunerated and tended to get bigger pay rises.
Over all, compensation package for Virgin executives listed in the report ranged from $416,000 to $1.99 million, compared to a range of $1.89 million to $6.7 million at Qantas.
Qantas chief executive Geoff Dixon topped the list after his total package increased 27 per cent in 2006-2005 to $6.7 million.
At the same time, Jetstar boss Alan Joyce saw his compensation package soar 87 per cent to 2.6 million.
This compared with an 8.8 per cent increase for Virgin boss Brett Godfrey, from $1.83million in 2005-2006 to $1.99 million last year.
The executive compensation packages are made up of a combination of salary and other forms of compensation.
There are performance-based cash incentives, non-cash benefits as well as items such as superannuation and share options.
In both cases, 2006-2007 proved a strong year for results, with Virgin’s net profit rising 93 per cent to $216 million and Qantas’s up 36 per cent to $719.6 million.
Mr Dixon’s $2.18 million salary was about 32 per cent of his total package, while Mr Godfrey’s $619,000 made up just over 31 per cent of his.
Mr Joyce’s $778,646 salary was the lowest proportion of the CEO’s compensation at 29.2 per cent.
Further down the executive ladder, Qantas chief financial officer Peter Gregg saw his remuneration jump 13.6 per cent to $4.16 million.
Virgin CFO Keith Neate’s annualised package, by comparison, rose 16.7 per cent to $898,000.
Qantas executive general manager John Borghetti’s package increased almost 27 per cent to $4.08 million.
Virgin Blue’s most highly paid executive after Mr Godfrey, chief commercial officer Stefan Pichler, saw his remuneration rise 17.6 per cent to $1.15million.
The differences also extended to the boards of the two airlines.
Virgin chairman Neil Chatfield’s 2006-2007 package came to $97,000, compared with outgoing Qantas chair Margaret Jackson’s total of $592,685.
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Report by The Mole
John Alwyn-Jones
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