Rex CEO entitled to $352,600 pay-out after his employment terms were updated just days before trading halt

Rex CEO Neville Howell is entitled to a 12-month salary payout if the budget airline ‘terminates his employment’ or ‘there is a significant change’ to the nature of his role.

The update to Howell’s employment terms were listed on the ASX on 25 July, just four days before the airline announced a surprise trading halt. You can see the update here.

Before the 25 July change, Howell’s employment terms stated that he would be entitled to just 5 weeks’ notice period if the airline terminated his employment.

Howell is currently paid an annual salary of $352,600 as stipulated in his employment terms when he took up the position of CEO on 5 June.

The shift in Howell’s employment terms were highlighted on X by market strategist Jessica Amir yesterday.

The trading halt was announced following a story published in The Weekend Australian‘s Margin Call column claiming Rex (REX.ASX) had called in a “turnaround team” from Big Four accounting term Deloitte and that the airline has been having trouble turning a profit in its domestic jet operations.

Rex shares last traded at $0.565, having plummeted nearly 50 per cent over the last 12 months. The trading halt has not affected scheduled flights at this stage.

According to the news report, Deloitte’s Sal Algeri and Richard Hughes, who helped Virgin recover from voluntary administration, are leading the team.

“The securities of Regional Express Holdings Limited (‘REX’) will be placed in trading halt at the request of REX, pending it releasing an announcement,” the ASX statement said.

“Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 31 July 2024 or when the announcement is released to the market.”

In requesting the trading halt, company secretary Richard Kwan said the move was “pending a material announcement in relation to a news article published on Saturday, 27th July 2024”, referring to The Weekend Australian story.

Trading in Rex halted amid deepening internal strife

Earlier this month, Rex’s former executive chairman, Lim Kim Hai, launched a bid to remove long-serving leader and former deputy chairman John Sharp from the board.

In a statement to the ASX, Rex said Lim is seeking to remove four directors, including Sharp, and appoint two new ones in his capacity as a shareholder with a more than five per cent stake in the airline group.

Lim had earlier stepped away from his role with both Sharp and COO Neville Howell promoted.

Chaos at REX as Singaporean shareholder pushes to turf airline’s entire board

Rex were contacted for comment.