Bankrupt United Airlines Paid CEO Bonus
Bankrupt United Airlines paid its top executive a bonus of over USD$366,000 last year as the company sought salary and other concessions from union workers, but has cut his pay by 15 percent in 2005.
Documents filed with the government on Wednesday showed that Chief Executive Glenn Tilton's salary plus bonus amounted to more than USD$1.1 million in 2004, even though he accepted a pay cut during the year.
Executive pay at major US airlines has plummeted in recent years as the industry struggles through its worst-ever downturn.
But the millions of dollars that senior officers give up in salary today can sometimes be made up later in stock plans, trusts, buyout deals and other deferred compensation plans.
Bruce Lakefield, Tilton's counterpart at the only other major US carrier in bankruptcy -- US Airways -- has a salary of USD$425,000. That figure is sharply lower than his predecessors, and is in line with counterparts at the low-cost airlines, which US Airways is in many ways trying to emulate.
But Lakefield, a former Wall Street executive, did not take a pay cut when the company slashed wages and benefits for its union workers this year.
American Airlines president and chief executive Gerard Arpey makes over USD$500,000 in salary, while Larry Kellner at Continental Airlines makes about USD$700,000.
United's Tilton received salary payments totalling USD$756,832 in 2004, plus a bonus of USD$366,393. In August of that year, he accepted a salary cut to USD$712,500 from USD$845,500.
In 2005, Tilton will get a salary of USD$605,626, a further 15 percent cut from the August 2004 level, the filing with the Securities and Exchange Commission showed.
United granted more than USD$1 million in bonuses to five senior managers last year for reaching incentive targets, the airline said. John Tague, executive vice president for marketing and sales, received the biggest bonus at USD$444,000. Tague did not receive a bonus in 2003.
United has been trying to shed billions in wage, pension and other costs for union and non-union workers during its bankruptcy restructuring. It hopes to emerge later this year but has yet to file a reorganization plan.