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Qantas execs face options wing clip

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    Qantas execs face options wing clip
    By Steve Creedy
    October 17, 2002
    THE Australian Shareholders Association will today oppose a Qantas deferred share plan that would award its executives hefty bonuses to buy hundreds of thousands of shares.

    The annual general meeting in Perth will vote whether to replace a suspended options scheme and allow chief executive officer Geoff Dixon to buy up to 340,000 shares, currently worth $1.28 million, and chief financial officer Peter Gregg up to 210,000 shares, worth almost $790,000.

    The new plan would apply to 860 Qantas executives who will be able to sacrifice up to 50 per cent of their annual bonuses to buy shares at market value.

    They would have to hold the shares for two years but would then qualify for a "matching award" of one additional share for nine acquired under the plan.

    The ASA disagrees with the matching award and says the scheme would allow executives to sell at a profit even if the airline's performance is poor and shares go down.

    "We consider that this DSP (deferred share plan) does not align the participants' remuneration with normal shareholder interests," the ASA said.

    "It is hoped that the DSP will be reintroduced in a suitably modified form."

    Qantas argues in its notice of meeting that about 17 per cent of the 350 top-listed Australian companies had a deferred share plan in 2000-2001. It believes the plan provides a focus on shareholder wealth, aligns the interests of shareholders and executives and provides an incentive for executives to stay.

    "In addition, the plan should provide management focus on long-term performance during both upturn and downturn cycles as the employee has a shareholding position to consider," it says.

    The ASA will also vote against the re-appointment of non-executive directors Trevor Kennedy and John Schubert on the grounds they have too many other commitments.

    But it will back the appointment of former BHP boss Paul Anderson and a move to boost the total fees paid to non-executive directors by 36 per cent to $1.5 million.

    Qantas says the fee increase brings it into line with other major Australian listed companies and ensures it remains competitive.

    Under current arrangements, chairman Margaret Jackson receives $280,000 a year in fees, and non-executive directors receive an annual base fee of $70,000.

    Non-executive directors who act as chairman on any committees are paid an additional $17,000 annually while committee members receive an additional $10,500.

    They also receive travel and superannuation benefits.

    Qantas shares bounced back yesterday after an initial fall after the Bali bombings to close at $3.76, up 12c.


 
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