It has been made known that Vanessa Hudson’s base compensation will be about 25% less than that of her predecessor, Alan Joyce, as she gets ready to take over as the new CEO of Qantas. Despite this discrepancy, Hudson is still expected to receive significant bonuses, underscoring how complicated the CEO compensation system is.
Hudson, who is now Qantas’ Chief Financial Officer (CFO), will start in her new position in November. Compared to Joyce’s existing base salary of $2.2 million, her annual base salary of $1.6 million marks a substantial change in executive compensation policy. Hudson’s prospective earnings are not limited to this though because she will also be qualified for other rewards, such as performance-based bonuses. Her overall compensation of $5.8 million, even after accounting for these additional profits, is significantly less than Joyce’s total compensation of $8.4 million.
This decrease in basic pay is consistent with previous firm trends. A 24% decrease occurred from prior CEO Geoff Dixon’s pay to Joyce’s starting salary in 2008, which is similar to Hudson’s current circumstance. Notably, Joyce’s base pay was $2 million when he started his job, which was $400,000 more than Hudson’s.
It’s important to acknowledge Joyce’s particular financial circumstances in the midst of these discrepancies. He postponed taking advantage of his long-term incentives for the past three years, which qualified him for end-of-financial-year bonuses worth $15.2 million. Along with potential short-term bonuses of up to $4.5 million, his earnings also include approximately 700,000 Qantas shares, valued at $4 million.
The outcome of a thorough hiring procedure was Hudson’s promotion to CEO. She defeated a tough field of competitors that apparently included well-known individuals including Jayne Hrdlicka, the CEO of Virgin, Stephanie Tully, the new CEO of Jetstar, and Cameron Wallace, the incoming Project Sunrise leader.
The chairman of Qantas, Richard Goyder, emphasised the careful consideration that went into this succession choice. He said, “A lot of thought has gone into this succession, and the board had a number of high-quality candidates to consider, both internally and externally.”
The selection of Hudson was greatly influenced by her vast experience, which spans over three decades in a variety of jobs, as well as her significant aviation expertise. She will continue in her position as CFO while also assuming the title of “CEO designate” and becoming a board member.
“This is an exceptional company full of incredibly talented people, and it’s very well positioned for the future,” Hudson exclaimed, expressing excitement for her next career. Delivering for those who depend on us and on whom we depend—our customers, our employees, our shareholders, and the communities we serve—will be my first priority.