This is what more top executives need to do: Maybe that way they could retain more employees that actually do the work!
Ailing Delta Cuts Executives' Pay
By HARRY R. WEBER 02/06/2003 10:56:19 EST
Delta Air Lines, looking to reduce labor costs as it struggles through a prolonged travel slump, said it would trim the compensation of its executives and indicated that pilots' pay might be cut sometime in 2003.
Starting March 1, chairman and chief executive Leo Mullin and president and chief operating officer Fred Reid will take 10 percent pay cuts. All employees at the vice president level and above - roughly 50 people in all - will take an 8 percent cut.
Delta would not provide details about whether the cuts would come from salary, benefits or bonuses and it gave no estimate of how much money the company expects to save as a result.
Delta's executive vice president for Human Resources, Bob Colman, said in a memo to employees that workers below the vice president level should not expect pay increases. And he said "events beyond our control could force us" to reduce the pay of pilots. The memo, dated Feb. 4, was circulated to journalists late Wednesday.
Pilots are Delta's highest-paid employees next to executives. Many make more than $100,000 a year.
According to Delta's most recent proxy statement, Mullin was paid $596,250 in salary and $1.6 million in stock in 2001. Reid was paid $655,000 in salary and $607,212 in stock. Neither executive received a bonus in 2001, the year that terrorist attacks, coupled with an economic downturn, sent the airline industry into a downward spiral it has yet to come out of.
By the middle of this year, Delta will have laid off 16,000 employees since the attacks.
Last month, Delta blamed poor economic conditions and lingering fallout from the Sept. 11 attacks as it reported a $363 million loss for the fourth quarter. For all of 2002, Atlanta-based Delta, the nation's third largest airline, lost nearly $1.3 billion. |
