Virgin Australia chief executive John Borghetti has been handed a multimillion dollar pay rise in return for making the airline cash flow positive for the first time in five years.
The airline ran at a $186 million net loss in the 2017 financial year, after losing $225 million a year earlier, and its executive team failed the profit metric on the scorecard used to determine bonuses.
But Virgin's annual report, released on Wednesday, shows the company's board weighted 25 per cent of the bonus scorecard to improving free cash flow, and another 25 per cent towards implementing its Better Business turnaround plan.
Both targets were "exceeded", with positive cash flow of $34.3 million compared to $92 million in the red in 2016, and the turnaround plan running ahead of schedule. Other targets around guest satisfaction and safety were also met.
That saw Mr Borghetti take home a $1.8 million cash bonus in addition to a $2.19 million long term bonus, bumping his total remuneration to $6.5 million, up from $4.15 million in 2016.
Profit was worth 15 per cent of the bonuses scorecard in 2017, but the board said it would carry greater emphasis in 2018.
Virgin's short-lived second in command, John Thomas, who took on the role as group executive in September 2016 and unexpectedly left the company at the end of June, was paid $2 million including $990,000 in "termination benefits".
Karl Schuster, chief executive of Virgin's Velocity loyalty scheme, received no short-term bonus after failing performance hurdles, but his remuneration still jumped 13 per cent to $1.4 million.
Acting group executive and Tigerair boss Rob Sharp was awarded $1.42 million, up from $992,000 in 2016.
Alan Joyce, chief executive at rival airline Qantas, was awarded a record $25 million in 2017 after executing its own turnaround plan.
