3101AFE Accounting Theory and Practice: Qantas CEO Salary Analysis

This report analyzes the impact of the COVID-19 pandemic on Qantas Airways, focusing on the CEO's decision to forgo salary for six months due to international flight reductions. The analysis applies stakeholder theory to evaluate the implications of this decision on various stakeholders, including shareholders, employees, and the board of directors. The report examines how the company's management, guided by the board, aims to protect stakeholder interests amidst financial losses. The analysis incorporates academic sources to support the discussion of stakeholder theory and its relevance to the case, emphasizing the importance of checks and balances in corporate decision-making and the role of management in maximizing returns for shareholders. Furthermore, it explores the significance of the CEO's action in maintaining stakeholder confidence during a crisis, and the role of financial adjustments in mitigating losses. The report concludes by highlighting the practical application of stakeholder theory in the context of the news article, emphasizing the link between corporate actions and stakeholder welfare.

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3101AFE ACCOUNTING THEORY AND PRACTICE
Article 4. Qantas CEO Gives up salary as International Flights slashed by a quarter
Student’s Name
Student Number:
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Article 4. Qantas CEO Gives up salary as International Flights slashed by a quarter
Business News Australia, Matt Ogg 10 March 2020
Article 4. Qantas CEO gives up salary as International Flights slashed by a quarter
Covid- 19 has led to weak demand in Qantas and therefore leading to a slash of
international flight routes for six months. Due to the slash of the flights, it has reduced the
company capacity by 23%. As the results of this development, the Group CEO will not be
expecting to take home a salary for six months. Other flights that have been suspended the
Bangkok route as they contemplate to reduce flights from Australia to other areas such as Japan
and Vietnam. It's expected it will lose around AUD$ 5.4 billion as a result of Airbus A380
aircraft suspension.
Word: 100
Stakeholder Theory
Stakeholder theory provides the organization with knowledge which is needed to ensure
that the corporation maximizes on the profits accruing to its shareholder. For instance, the
managerial branch will help the management of the company to mainly focus on ensuring that
they meet all expectations of the stakeholders irrespective of market situation (Min, Zhenggang,
& Jing, 2018 P.11-26). Management of the organization has the sole mandate to ensure that all
the stakeholder interests have been protected when making crucial decisions that relate to the
corporation. A board of directors manages the corporation, thus enhance checks and balances on
the firm management to ensure all the activities protect stakeholder welfare. The reason as to
why the management exists is to deliver maximum returns to the shareholders, which could

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either be in dividend or share price. Management should devoid of engaging in philanthropic
activities. Still, they should always focus on the prime purpose, which is to provide the
shareholders with a high dividend at the end of the financial year. With such perspective, it will
enhance good coordination between stakeholders, management, and the board.
Words: 182
Analysis
Stakeholder theory mainly focuses on the corporation, which has a team of management
and the board of directors acting on behalf of stakeholders. They are bound by their duties to
ensure that the stakeholder's interest is always protected in all the activities which they undertake
daily. Stakeholders cannot be all available to make decisions on the daily management of the
company, and that's why they hire the management to act on behalf of them. In addition to that,
stakeholders also appoint the board, which is constituted of the shareholders and other
independent directors to supervise the team of management (Yuesti, Novitasari, & Rustiarini,
2016, P.100). With such a plan, it makes it possible to have checks and balances on the
decisions which are made by a team of management daily. On the other hand, during the Annual
General Meeting, the shareholders and other key stakeholders will also hold into account the
board to ensure their interests have been prioritized.
The company adopts this structure of management to ensure that everyone is working on
behalf of the stakeholder's interest in the company. Also, with the help of the auditor, the
stakeholders can understand the financial status of the firm during the AGM (Miles, 2017 P.445)
Managerial role in organization is significant, and therefore the stakeholders should ensure they

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hire men and women who are professionals in the management of the firm. It's through such
initiative which could help the stakeholder's interest be protected at all the time.
According to the article, the CEO and chairman are not expecting take-home salary and
fees, respectively, due to the suspension of flights. It's a bold move in a bid to ensure the
operations of the firm are left afloat due to the pandemic effect. They should always protect the
interest of the stakeholders by making critical decisions in the firm, which would promote
maximum return in the market (Kent & Zunker, 2017 P.533-563). Due to the suspension of the
flights, the group is expected to lose a lot of money, and such losses could be compensated by
the senior management and board making essential adjustments (De Gooyert et al., 2017 P 406).
When the revenue of the group falls, then there is a need to have a pay cut to help reduce
expenses in the firm. With the CEO accepting to give up salary, it gives the stakeholder a lot of
confidence, which is very important.
Words: 403
Conclusion
As it's shown in the above analysis, the stakeholder theory relates effectively with the
news articles regarding the protection of the stakeholder interest.
Words: 23

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Reference List
De Gooyert, V., Rouwette, E., Van Kranenburg, H. and Freeman, E., 2017. Reviewing the role
of stakeholders in operational research: A stakeholder theory perspective. European
Journal of Operational Research, 262(2), pp.402-410.
Kent, P. and Zunker, T., 2017. A stakeholder analysis of employee disclosures in annual
reports. Accounting & Finance, 57(2), pp.533-563.
Ma, L., Wang, L., Wu, K.J., Tseng, M.L. and Chiu, A.S., 2018. Exploring the decisive risks of
green development projects by adopting social network analysis under stakeholder
theory. Sustainability, 10(6), p.2104.
Miles, S., 2017. Stakeholder theory classification: A theoretical and empirical evaluation of
definitions. Journal of Business Ethics, 142(3), pp.437-459.
Min, Z., Zhenggang, C., and Jing, L., 2018. Stakeholder theory based on an information field
model. Advances in Management and Applied Economics, 8(3), pp.11-26.
Yuesti, A., Novitasari, L.G., and Rustiarini, N.W., 2016. Accountability of non-government
organizations from the perspective of stakeholder theory. International Journal of
Accounting and Taxation, 4(2), pp.98-119.