In his haste to reply to a point not made in Crikey about Qantas, its newly appointed former ALP hack, David Epstein avoided providing any illumination on the sensitive issues for shareholders. He also ignores the growing unease over payments to former CEO Geoff Dixon, the question of why shareholders were taking a cut in pay and whether senior management and the board would follow their example.

One of Mr Epstein’s former gigs for the old ALP Government in the 1990s was running an organisation nicknamed the AniMaLS: the national media liaison service, or a bunch of spin doctors to push the Labor Government line on the taxpayer’s purse. Mr Epstein is a former chief of staff to Mr Rudd when he was Federal Opposition leader.

Spinning a line and avoiding answering questions is his craft.

Of course the Qantas board didn’t conspire to hold the meeting in Perth to avoid scrutiny. They have had trouble organising a termination payment for Geoff Dixon, so how could they organise a conspiracy?

That was Mr Epstein’s suggestion, not mine. He should really talk to former Qantas executives and board members about why the move really happened, especially the unease in facing the likes of Jack Tilburn and Stephen Mayne at AGMs.

He should also ask about the company policy of flying and paying for selected journalists to travel to Sydney for AGMs and other functions in past years. Perhaps he could suggest that Qantas offer a special fare deal (not on Jetstar) for small shareholders wanting to travel to Perth or Adelaide. After all the company is already spending thousands flying the board and senior management there, plus accommodation, why not extend the largesse to the owners, all of whom have lost income because the dividend is no longer in place.

If this offer can’t be made to shareholders because of the tough financial times, then why is the board spending all this money on the AGM in Perth? Shareholders would appreciate the need for sacrifices due to the strained circumstances Qantas now finds itself in. And that’s after shareholder income has been sacrificed by the board (whose members are still being paid).

Mr Epstein wrote yesterday:

He [Dyer] has had to concede Qantas is meeting in Perth as part of a long-standing policy to be accessible to shareholders across Australia, not just in Melbourne or Sydney. That can hardly be discriminatory. Nor did anyone suggest that when Qantas met in Brisbane last year.

So what is the problem? Did Dyer secretly want to say that West Australians are less equipped than the rest of us to ask questions as Qantas shareholders? Obviously he couldn’t do that without the risk WA Crikey readers might just hold him to account and demonstrate they are just as capable of critical thought as other Australians.

And what will he say when the Qantas AGM is next held in Adelaide?

Because it was arranged sometime ago is the answer. But perhaps Mr Epstein can tell us how many non-institutional shareholders Qantas has in each of the States and Territories?

Shouldn’t Qantas be focused on giving as many shareholders as possible the opportunity each year to quiz its directors? And, as Qantas is no longer owned by the Government, it doesn’t need to satisfy minorities at the expense of the majority of its shareholders?

Perhaps Mr Epstein will explain to shareholders who have lost their dividends from the airline, why Mr Dixon deserved a $3 million payment, and why he deserved so much money since trying to lead the private equity buyout, while Qantas’ reputation for safety, reliability and reputation as a good employer went down the drain?

Perhaps Mr Epstein can explain what Qantas is doing to repair the damage done to the superannuation and other holdings of small shareholders from the decision of omit dividends for the time being. Perhaps Qantas can do the same for them as it rushed to do for Mr Dixon and compensate them. I’m sure they would only want the payments they have missed out on and not like Mr Dixon, receive compensation for something that didn’t eventuate?

This was the statement at the start of the 2009 annual report:

A priority for the new management team, led by Chief Executive Officer Alan Joyce, was to restore Qantas’ reputation for safety and reliability, which had been damaged by an industrial dispute and subsequent maintenance backlog; and two inflight incidents. By January 2009, Qantas had regained its industry leadership in domestic on-time performance. In March 2009, on the basis of its preliminary investigations, the Australian Transport Safety Bureau found the inflight incidents were related to manufacturing faults beyond Qantas’ control. And in June 2009, monthly customer satisfaction reached its highest level since 2003.

And who was in charge of Qantas before Mr Joyce and the “new management team” took over last November? Geoff Dixon and his management team, and by the way, many of the board who put their hands up to award him the $3 million the airline need not pay him.

Finally Mr Epstein can talk to Qantas director and former CEO, James Strong about AGMs, shareholders and performance. He also chairs Woolworths, a company with a far better track record than Qantas for profit growth, returns to shareholders, good management and aligning management’s remuneration with that of shareholders. Woolies has also gone walkabout to Melbourne and Brisbane, but the majority of AGMs since 2000 have been held in Sydney (including this year’s) where most of its shareholders reside, being a Sydney-based company, like Qantas.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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