When Margaret Jackson announced on May 18 last year that she and James Packer were quitting the Qantas board in the wake of the failed $10 billion private equity takeover, her statement included the line that Geoff Dixon had committed to remain as CEO “until at least July 2009”.
Dixon himself declared just 11 days ago on July 18 when flagging 1500 job cuts that he expected to retire next February after delivering the December half profit result.
To suddenly find 10 days later that a short 42-year-old Irishman had been immediately installed as CEO-designate and a director straight after the airline’s biggest safety drama in history was not a good look for Australia’s most pugnacious CEO.
Dixon’s 18 July press release included the line that “some compulsory redundancies will be necessary, which we regret.”
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So, was Dixon one of those compulsory redundancies? We probably won’t know for sure until we see how much Dixon is paid in 2008-09 and whether the “T” word, termination, is used to describe part of it.
For instance, long-serving Foster’s CEO Ted Kunkel didn’t happily retire after 12 years in February 2004, despite the tone of this press release at the time. Instead, he was pushed out and received a $3.4 million termination payment that was disclosed seven months later.
History tells us that we shouldn’t be surprised by Dixon’s expedited exit because companies which go through some sort of cathartic experience — and the failed private equity bid had critics up in arms — generally change their CEO and chairman in quick succession.
The Dixon legacy is certainly controversial. The former top Qantas executive in North America, Bruce McCaffrey, was last night jailed for six months over an international freight cartel and his family have been writing letters pointing the finger at senior Qantas executives in Australia. Indeed, McCaffrey’s lawyer told the sentencing judge he was following the orders of ”corporate higher-ups in Sydney”.
Throw in cash for comment, highly effective government lobbying, huge executive salaries, an increase in safety incidents and the often brutal deployment of market power and you get a few negative entries on the Dixon ledger up against the overall financial performance which has been first class.
The other fascinating element of Alan Joyce’s ascension to the top job is that Australia’s most iconic brand is now being managed for an expat. An Irish airline can’t buy Qantas but an Irishman can run it.
No other developed country has the Australian situation where eight of the top ten companies have foreign-born CEOs, the exceptions being Michael Luscombe at Woolworths and Frank Lowy at Westfield.
However, this trend is concentrated in the mega-cap stocks because the next 90 largest Australian companies have less than 10 expats in charge, although this list now includes venerable names such Amcor, James Hardie, Santos, Qantas, Lend Lease and Fairfax Media.
*Listen to today’s discussion about bank writes offs and Geoff Dixon on 702 ABC Sydney.