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- Aug 30, 2002
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"Delta Takes Aim at American for Its Lack of Profit Sharing"
This week, media outlet TheStreet reported that Delta has released employee communications regarding the disparity of total pay between American Airlines and Delta employees and their opinion of the difference in culture. The following are excerpts from the article.
Stories on a Delta employee Web site, posted Monday and Tuesday, attack rival American for not paying profit sharing in a year when Delta will pay out more than $1 billion.
Tuesday's story (Delta's employee communique) began: "Despite pressure from his employees to implement a profit-sharing program, American Airlines CEO Doug Parker said Monday that profit sharing is outdated."
The story noted that Alaska, Southwest and United all have profit-sharing programs, and said "Delta is expected to pay more than $1 billion in profit sharing to employees for 2014, the highest payout in the industry. Total 2014 profit sharing for Delta employees will average nearly two months' salary."
A similar story was posted on the Delta Web site on Monday. It was titled, "Delta compensation eclipses American counterparts," and began with this sentence: "Delta people will earn on average 26% more total pay in 2014 than their American Airlines counterparts, according to Delta's latest competitive review of compensation."
The story (Delta employee communique) quoted Parker, in an interview with Reuters, as saying, "We should move back to what normal industrial companies do, which is pay people [what] they earn" without profit sharing.
That story said Parker "has been opposed to profit sharing for his employees even as the company reported surging profits," and referred to two recent statements Parker has made. In one, Parker declared at an employee meeting in November that "it's just not the right way to pay 100,000 employees that don't have that much impact on the daily profits." Earlier, Parker told an investor conference that companies pay employees a fair wage, and then distribute remaining profits to shareholders. In such cases, profits are not shared with employees, he said.
"The philosophy is different at Delta," the article said. "The goal is a business model that is consistently profitable even amidst events like global outbreaks of disease, political unrest and spikes in jet fuel prices."
The Delta communique added: The end of profit-sharing at American comes as company executives boast that they will become the most profitable airline next year. "I think were going to lead the industry in pre-tax profit margins next year," Scott Kirby, American's president, told Wall Street analysts during the company's quarterly earnings conference call in October. Parker added: "We said out-of-the-box that if we're going to be the largest airline in the world, we should be the most profitable."
This week, media outlet TheStreet reported that Delta has released employee communications regarding the disparity of total pay between American Airlines and Delta employees and their opinion of the difference in culture. The following are excerpts from the article.
Stories on a Delta employee Web site, posted Monday and Tuesday, attack rival American for not paying profit sharing in a year when Delta will pay out more than $1 billion.
Tuesday's story (Delta's employee communique) began: "Despite pressure from his employees to implement a profit-sharing program, American Airlines CEO Doug Parker said Monday that profit sharing is outdated."
The story noted that Alaska, Southwest and United all have profit-sharing programs, and said "Delta is expected to pay more than $1 billion in profit sharing to employees for 2014, the highest payout in the industry. Total 2014 profit sharing for Delta employees will average nearly two months' salary."
A similar story was posted on the Delta Web site on Monday. It was titled, "Delta compensation eclipses American counterparts," and began with this sentence: "Delta people will earn on average 26% more total pay in 2014 than their American Airlines counterparts, according to Delta's latest competitive review of compensation."
The story (Delta employee communique) quoted Parker, in an interview with Reuters, as saying, "We should move back to what normal industrial companies do, which is pay people [what] they earn" without profit sharing.
That story said Parker "has been opposed to profit sharing for his employees even as the company reported surging profits," and referred to two recent statements Parker has made. In one, Parker declared at an employee meeting in November that "it's just not the right way to pay 100,000 employees that don't have that much impact on the daily profits." Earlier, Parker told an investor conference that companies pay employees a fair wage, and then distribute remaining profits to shareholders. In such cases, profits are not shared with employees, he said.
"The philosophy is different at Delta," the article said. "The goal is a business model that is consistently profitable even amidst events like global outbreaks of disease, political unrest and spikes in jet fuel prices."
The Delta communique added: The end of profit-sharing at American comes as company executives boast that they will become the most profitable airline next year. "I think were going to lead the industry in pre-tax profit margins next year," Scott Kirby, American's president, told Wall Street analysts during the company's quarterly earnings conference call in October. Parker added: "We said out-of-the-box that if we're going to be the largest airline in the world, we should be the most profitable."
