Statement by Geoff Dixon Chief Executive Office, Qantas Airways Limited
Sydney, 14 December 2006
The Private Consortium bidding for Qantas, Airline Partners Australia, has asked me to continue as Chief Executive Officer of Qantas and to take the Company forward with a similar management team to now. I have accepted this offer.
As I understand is the usual practice in private equity transactions, the senior executives of Qantas will hold an equity share in the Company of around 1%. Some of this equity will be the executives' own money, with the majority being provided by the Consortium. The money is at risk and eventual rewards will depend on the performance of the Company.
My own remuneration will be in three parts. Firstly, a salary and a short-term, bonus scheme which will, I am told, be around the same as I currently receive.
Secondly I will invest some of my current Qantas share entitlements in a scheme which will provide returns similar to what I would have received with shares vested under my current contract.
Thirdly, the Consortium will invest for me in a Long-Term Incentive Scheme (LTIP), which will be performance and time based, and at risk.
As I said, the value of this LTIP will depend on how Qantas performs. If Qantas achieves a 15% annual return for five years it will be worth around $30 million, and at a 25% annual return it will be worth around $60 million.
I appreciate the confidence Airline Partners Australia have placed in me.
That said, my family and I have decided that I will gift my entire share of the LTIP to a charitable trust, which we will establish for the benefit of the community, particularly in the areas of medical research and indigenous health and education.
I have instructed my lawyer, Danny Gilbert, Managing Partner of Gilbert and Tobin, to establish a trust which may take the form of a Prescribed Private Fund under the Tax Act. I understand that it will take three to four months to obtain all the necessary approvals for the establishment of the Trust.
Finally, I would like to say that I advised the Board of Qantas on 1 December that, in the event of a sale being concluded, I intended to take this course of action.
Issued by Qantas Corporate Communication (Q0000)