Qantas Cuts Executive Bonuses After Cyber Attack
In a significant move to bolster accountability, Qantas has decided to reduce the bonuses of its executive team in response to a data breach that occurred in July of this year. The airline’s management, including CEO Vanessa Hudson, will see their short-term bonuses cut by 15 percentage points for the financial year 2024-25, reflecting the impact the cyber incident had on their valued customers. Hudson will experience a substantial reduction of $250,000 in her bonus.
CEO’s Compensation Details
For the 2025 financial year, Hudson’s total compensation will amount to $6.3 million, which marks an increase from her previous compensation of $4.4 million. Meanwhile, former CEO Alan Joyce is set to receive $3.8 million as part of his final bonus package after stepping down from his role in late 2023. This adjustment in pay underscores the company’s commitment to responsible governance and ethical management practices.
Overall Pay Adjustments
Base salaries for executives have seen a 3% increase, and long-term bonuses are on the rise as well, primarily due to a notable increase in the company’s share price over recent years. Qantas Group Chair John Mullen highlighted the proactive measures undertaken by management in reaction to the data breach, stating that the decision to reduce bonuses demonstrates a culture of accountability within the organization.
Details of the Cyber Incident
The cyber attack in July was a sophisticated operation, reportedly involving cybercriminals leveraging artificial intelligence to impersonate a Qantas employee. The attackers managed to deceive a customer service operator in Manila into disclosing sensitive information, affecting nearly six million customers. While no group has taken responsibility for the breach, initial investigations pointed to a hacking collective known as Scattered Spider, although later assessments indicated a connection to another group, ShinyHunters.
Legal and Financial Implications
Mullen also addressed regulatory challenges facing the company, including a $90 million fine and an additional $120 million in compensation related to the illegal outsourcing of ground workers back in 2020. He extended apologies to those affected by the past decision but clarified that executive bonuses for this fiscal year will not be further reduced as they had already faced cuts last year. Hudson, for instance, had her bonus reduced by $450,000 amid those earlier repercussions.
Investor Expectations
Major investors, especially superannuation funds, have expressed their vigilance regarding executive bonuses this year, viewing them as a critical indicator of Qantas’s commitment to ethical business practices. Following a pre-tax profit of $2.39 billion in 2024-25, which is a 15% increase from the previous year, the airline seems to be on a recovery trajectory, with a post-tax profit rise of 28% to $1.61 billion.
Employee Incentives
In a bid to further enhance employee morale and align the interests of staff with company performance, approximately 25,000 non-executive employees will benefit from a new initiative that grants them $1,000 each in shares. This move follows a similar stock-rights scheme announced by Virgin earlier in the year, which offered employees $3,000 in share rights.
In summary, Qantas’s decision to adjust executive bonuses in light of the cyber attack reflects a strong commitment to accountability while navigating financial recoveries and improving employee incentives.
