CEO Pay vs Average Australian Worker

One theory: the bonus scorecard

A common explanation for offshoring decisions is that executive bonuses are tied to short-term profit, so cutting labour cost pays the people making the decision, while the cost of any long-term damage to the business lands on someone else later. That is a theory about motive, and no company states it. What can be checked is the incentive itself, because listed companies have to publish it.

Qantas is the clearest worked example. Its 2026 annual report sets out a short-term incentive scorecard in which half the weighting is a single financial measure, Underlying profit before tax, with a threshold of $2.1 billion. The result was $2.064 billion, short of the threshold by $36 million, which the report says “in the normal course would result in a zero outcome for 50 per cent of the scorecard”. The board instead exercised its discretion to grant the threshold result of 25 per cent, lifting the scorecard from 54 to 79 per cent. The maximum short-term award for executive management is 140 per cent of base pay. Three months later Qantas announced that 850 corporate roles would move to Accenture, with the work delivered mostly from India, and its shares rose more than 6 per cent on the day.

None of that establishes why the decision was made, and cost is only one of the reasons companies give for offshoring. But the mechanism is not speculative. Half the bonus rides on a profit number, labour cost is one of the few inputs management controls directly, and the board has shown it will use its discretion in management's favour when that number is narrowly missed.

Source: Qantas Annual Report 2026, Remuneration Report (pp 40 and 44)