Joyce shows he's still flying high in pay stakes

Qantas boss Alan Joyce can claim a small victory in his battle with Virgin Australia chief John Borghetti.

Qantas boss Alan Joyce can claim a small victory in his battle with Virgin Australia chief John Borghetti.

On the measure closest to the hearts of most executives - base pay and bonuses - Mr Joyce has pipped his former Qantas workmate to the title of Australia's highest-paid airline CEO.

A year after he took the honour, Virgin's annual report shows Mr Borghetti's take-home pay amounted to $2.66 million for the year to June, compared with the $3.33 million Mr Joyce pocketed for the year to June.

But when including long-term bonuses which they may or may not receive, the statutory pay number for Mr Joyce of $5.1 million outstrips the $3.7 million for Mr Borghetti.

The Virgin boss's pay dropped only slightly from 2011-12 due partly to a contractual bonus for the completion of the takeover of West Australian airline Skywest, and the purchase of a controlling stake in Tigerair Australia.

The board also decided to boost his base pay by $350,000 because Virgin's restructure was ahead of schedule.

Its other top executives had cuts to their pay in a year in which the airline slumped to a $98 million annual loss due to stiff competition in the domestic market, disruptions caused by a new reservations system and the carbon tax.

While disappointed with Virgin's annual loss, its largest shareholder, Air New Zealand, vowed on Friday to "support and buttress" the airline if needed alongside Singapore Airlines and Etihad.

The three airlines have already provided Virgin with a $100 million line of credit in the event that it needs support. Singapore Airlines has a 19.8 per cent stake, and Etihad 17.5 per cent.

Air New Zealand chief executive Christopher Luxon told his airline's annual meeting that Virgin's recent loss was a "disappointing outcome" but he emphasised that it was challenging a "formidable competitor" in Qantas.

While facing a "capacity and price war", Mr Luxon said Virgin had made decisions such as buying Skywest and a controlling stake in Tigerair in order to set itself up for the long term. It now had a portfolio of brands and aircraft that could be used to compete more vigorously against its main competitors.

Air New Zealand's departing chairman, John Palmer, also said a strong presence in Australia was critical to the profitability of the Kiwi airline, citing the feed of passengers onto its network from Virgin.

"We felt that the glue needed to be some shareholding," he said.

Mr Palmer said it offered Air New Zealand other opportunities, citing the potential for a closer relationship with Singapore Airlines. The latter has an alliance with Virgin.

Air New Zealand will also restart an on-market buyback of up to 3 per cent of its shares, which will temporarily boost the New Zealand government's 73 per cent stake in the airline because it will not take part in the program.

The government plans to eventually reduce its stake to 51 per cent.

-Woolworths boss Grant O'Brien earned $5.7 million last financial year, just over half as much as his rival at Coles. Mr O'Brien was paid about $4.05 million in cash in the 2013 financial year, with the remainder of his remuneration coming in shares and other benefits.

His total pay was up from $4.2 million the previous year. By comparison, Coles chief Ian McLeod's pay packet fell last financial year, but he still earned almost $11 million.

Mr MacLeod's total remuneration in financial 2013 of $10.7 million was down by more than $4 million from the previous year.

Elsewhere in retail, Harvey Norman chairman Gerry Harvey's annual pay remained steady at $1.03 million last financial year, as the company's profit dropped by 17.5 per cent.

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