Pilots Still Undecided About Talking Pay Cuts
I'm sorry for, what I've done.
I broke your heart, now we're apart.
I'm sorry for, making you cry.
I broke your heart, now I'm alone.
I'm by myself.
--"I'm Sorry," Tyrese
It could be the lament of a lot of airline CEOs. The latest to
sing this song is Delta CEO Leo Mullin (right). Friday, he
apologized for being "insensitive" to outcries about his executive
pay package while pressuring employees to make wage and benefit
concessions and continuing the process of laying off approximately
Delta may indeed still be the healthiest of the big US airlines,
but that's not necessarily saying much. This month, Delta reported
losses of $466 million. Its cost-per-mile-per-seat rose from $10.49
to $11.11 over the same time last year.
But Mullin's Making Out
earlier this month defended his compensation package and those
afforded other senior executives at Delta. "This program was
established in response to 9/11," he said. "We were worrying about
every single airplane. This group [the management team] had no
protection for their pensions, and we were getting calls deep into
And he continues to defend executives' bankruptcy-proof
Mullin himself drew the ire of Sen. John McCain (R-AZ, pictured
below, right) late last month, when the Senator blasted Mullin's
$25.5 million compensation plan. Congressman Martin Sabo (D-MN,
pictured bottom, right) went even further, tying airline executive
compensation to federal aid proposed for the industry in the wake
of 9/11, the war in Iraq and the SARS outbreak.
"Call this our homeland coalition of the willing,"
Sabo said on April 1. "When the airlines are cutting
employees and flights, the executives should agree to reduce their
compensation as well -- particularly as a fair price for the $3.2
billion airline aid contained in this bill."
"My home-state airline, Northwest Airlines, has asked their
employees to take a 22% reduction in their salaries. They
recently announced planned layoffs of another 5,000
workers. They have lost $1.2 billion in the last two
years. Each of us feels the effects of their difficult
situation, exacerbated in large part by the war with
Iraq. Each of us understands the meaning of shared sacrifice,
including airline executives," Sabo stated.
Delta Airlines executives received more than $17 million in
total compensation in 2002 while the airline was losing $1.3
billion. The airline's CEO, Leo Mullin, received almost $13
million, while 16,000 employees lost their jobs.
Continental Airlines CEO Gordon Bethune got a
total cash-stock package valued at $11.9 million in 2002, more than
twice what he received in 2001 -- while the airline's 2002 losses
were $451 million.
Sabo's amendment states, "no airline receiving funding...may
provide compensation (pay, benefits, and stock options) to senior
executives that exceeds the base pay and benefits that such
executives received in 2002." The amendment would not permit
bonuses and stock option compensation, if an airline accepts this
"We all understand the tremendous economic hit the airlines have
taken during these difficult times. We are willing to do our
part to insure both the safety and security of our troops abroad,
and the vitality of our economy at home. Airline executives
should do no less," Sabo concluded.