Qantas Shareholder Showdown: Preparing for the Annual General Meeting Clash. Qantas, Australia iconic airline, is bracing itself for what promises to be a tumultuous annual general meeting, as shareholder discontent simmers in the corporate world. The central issue at hand is the extent to which shareholders are prepared to express their frustration with the airline’s board.

A Record-Breaking Battle for Executive Pay

The burning question on everyone’s mind is the magnitude of the vote against executive pay packages. Will it surpass the record-setting 88 percent vote against National Australia Bank’s executives in 2018, or will it align more with the 62 percent backlash that Westpac faced the same year? Whichever the outcome, it is bound to be a humiliating spectacle.

Anticipating a Resounding Protest

It’s likely that the latter scenario, mirroring the Westpac situation, may play out. A substantial protest vote, expected to tally at least 25 percent, is almost a certainty. Qantas Chairman Richard Goyder and his team are bracing for this impending wave of discontent.

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Shareholder Dissatisfaction: The Underlying Issues

Most major shareholders, whether publicly or privately, have conveyed their dissatisfaction with various issues to the Qantas board. These grievances span from the controversial sale of the majority of shares by then-CEO Alan Joyce in June to allegations by the competition regulator concerning the sale of tickets for already canceled flights.

Concessions and Further Turbulence

Major shareholders have already managed to extract some concessions. Goyder, for example, has announced his departure next year, and two long-standing directors have tendered early resignations. However, more turbulence looms on the horizon, with the fate of another long-standing Qantas board member, Todd Sampson, hanging in the balance. The outcome will be revealed when proxy votes are tallied next Friday.

Preparing for the Departure of Todd Sampson

In the likely event that Sampson’s re-election prospects appear grim, an announcement from Qantas about his decision not to stand for re-election is expected.

Shareholders’ Limited Recourse on Executive Pay

Despite their discontent, shareholders, both major and minor, will have limited recourse concerning the generous payout of over $21 million to departing CEO Alan Joyce. This decision has already been approved by shareholders, and any attempts to amend it now rest at the discretion of the board.

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A Cloud Over Joyce Long-Term Options

Joyce’s financial security appears relatively secure at this point, but it remains vulnerable. If the competition regulator’s allegations of deception against Qantas are substantiated, it may have consequences for Joyce’s long-term options.

A Critical Decision on Vanessa Hudson

Shareholders will have the opportunity to vote on a compensation package for Qantas’ new CEO, Vanessa Hudson. This verdict remains uncertain and will hinge on shareholders’ assessment of her leadership and her role in addressing the airline’s challenges.

Timing and Airfare Increases

Hudson has made two significant announcements recently. Firstly, she has decided not to pursue an acquisition of Alliance Airlines following the Australian Competition and Consumer Commission’s rejection of the deal. Secondly, Qantas has increased airfares by 3.5 percent in response to rising fuel costs. The timing of this move has raised eyebrows, given recent assurances from the airline regarding fare reductions.

Challenges and Unhappy Shareholders

From a shareholder perspective, there is little cause for celebration. Qantas’ share price has dipped over 28 percent in the last six months, primarily due to the potential for cost overruns. The looming threat of a $250 million penalty/settlement against Qantas in the event of an ACCC loss, along with the compensation owed to illegally terminated ground handling staff, adds another $200 million to the growing list of expenses.

The Unlikely Winners

In this turbulent scenario, the only ones celebrating are the Qantas short sellers who, somewhat ironically, are now portraying themselves as prophetic investors.