Experts have identified Australia’s best-value chief executive. He works in the travel industry – and in an agency, not for an airline.
Step forward Graham “Skroo” Turner, Flight Centre managing director. He has been identified as the best value chief executive, “pound-for-pound”, in Australia, earning about a quarter of the going rate. The fact has been noted in the company’s annual report.
“In fact, our very own Graham Turner (Skroo), has in the past been judged Australia’s best value CEO (Source: Egan & Associates and The Australian Financial Review),” John Eales, Flight Centre’s remuneration and nomination committee chairman, notes in the report.
“Skroo’s salary again made headlines during 2014/15, when he was identified as the second lowest paid CEO in an ASX S&P 100 company for the 2014 fiscal year,” Eales wrote, adding “hopefully he didn’t see it!”
Eales mentioned that the average Flight Centre senior executive earned less during 2015, when bottom-line results did not meet initial expectations, than during 2014, when the company recorded solid profit growth.
“This reflects the strong correlation between pay and performance within the company’s senior ranks, a feature that is often highlighted by external commentators.”
In an overview of remuneration philosophy, Eales reiterated that Flight Centre did not believe in a one-size-fits-all approach.
“Accordingly, it has a unique remuneration framework that is purpose-built to suit the company and its objectives. This framework is aligned with the company’s philosophies and ties pay to performance, thereby ensuring that FLT’s people are rewarded financially when shareholder value is created.”
According to Flight Centre’s 2015 annual report, Turner’s total remuneration was AUD 518,238, significantly down on the AUD 657,073 he earned in 2014.
The Australian pointed out yesterday that the 15.244 million shares Turner owns in the company earned him more than AUD 23 million in fully franked dividends this year.
The Australian noted that Flight Centre’s chief operating officer, Melanie Waters-Ryan, received AUD 986,127 in 2015, down from AUD 1.082 million the previous year. Executive general manager Rob Flint took home AUD 580,068, down from AUD 795,219.
For really big money in travel salaries, you have to head to the airlines. In the latest financial year, Qantas chief executive Alan Joyce has seen his remuneration soar, nearly trebling to reach AUD 12 million.
Virgin Australia chief executive John Borghetti saw his remuneration fall by 10.5% to AUD 3.64 million over the same period.
As the Sydney Morning Herald points out today, both men had received total pay packages of about AUD 4 million in the 2013-14 financial year. Their changing fortunes since “can be linked to the share price and financial performance of the respective airlines”.
Written by Peter Needham