Ultimately, Joyce may have become too focused on profitability rather than longevity of the business, Liu said.
Australian Eagle Asset Management chief investment officer Sean Sequeira said Joyce had joined Qantas during a turbulent period, and that his management style had been a good fit for the airline.
“In terms of his hard-nose management style, it has actually been quite beneficial to Qantas at a very difficult time,” he said. “Joyce came at a time when competition was extremely fierce and the company was trading at a fraction of its book value. He worked through a very difficult time to put the company in a financially healthy space and proved himself as a very good manager and custodian of the business.”
However, the pandemic generated another difficult period, Sequeira said, in which Joyce “pushed a little too far.”
“It’s a high capital-intensive, difficult business to run, but the most recent period leaves a mark on Joyce which, if you look at his broader achievements, is probably unfortunate for him,” Sequeira said. “He goes out on a bit of a low.”
Vas Kolesnikoff, head of Australian and New Zealand research for proxy advisory group Institutional Shareholder Services (known widely as ISS), which advises investors on how to vote on company resolutions, said he was keeping an eye on Qantas’ handling of the media and the regulatory backlash to the company.
“We are watching the board’s response to this, and the company’s response to this.
“There’s some time between now and the AGM, and things could change before then,” he said, pointing to other companies that had decided to change executive remuneration structures due to bad press ahead of their annual meetings including Commonwealth Bank and Westpac.
‘There’s been so much bleeding, that much bad PR that the board had no choice but to do something about it – and there’s going to be more to come.’
Forager Funds Management’s CIO Steve Johnson
Qantas’ shareholders have a long history of supporting the board’s resolutions, and prior criticisms against its remuneration structures have not resulted in a large investor protest vote.
Late last week, two major proxy advisory groups – the Australian Council of Superannuation Investors and Ownership Matters – also said they would be looking for a response from the board in regards to Joyce’s remuneration and tenure. Both groups declined to add to their statements on Tuesday.
Many fund managers have sold out of their Qantas holdings in recent months after scooping up shares during the pandemic when the airline was trading much lower at around $3 or $4 a share.
Steve Johnson, chief investment officer of Forager Funds Management, said it was likely there would be more changes at Qantas as the board considered its options.
“I think there’s been so much bleeding, that much bad PR that the board had no choice but to do something about it – and there’s going to be more to come,” he said.
“I think you will see them try to reset their relationship with their customers and their relationships with the media and government.”
“I would not be surprised to see the company take more actions, ie, paying people back the money that they are owed and changing their behaviour around some of these cancelled flights. You’ll see a lot of that over the next couple of months and this is just the first step.”
Forager’s funds held a stake in Qantas until recently after buying in during the pandemic. It began selling out when the company’s share price recovered to $6.50 in June this year.
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