http://news.airwise.com/story/view/1174390644.html
Tuesday March 20, 2007
Delta Plans USD$720 Mln Staff Payout
March 20, 2007
Delta Air Lines plans to reward employees and managers, but not its chief executive, with about USD$720 million in cash and stock when it exits bankruptcy in the coming weeks, the airline said.
Delta, which squeezed USD$1 billion in savings from its employees, is trying to make up for a tumultuous year and a half in bankruptcy. Since filing for Chapter 11 in September 2005, Delta slashed wages to below industry rates and dropped a pension plans for its pilots.
"These are the employees that saved the company," Chief Financial Officer Edward Bastian said in a phone interview.
Delta's generosity is fueled in part by a turnaround in the fortunes of the long-suffering US airline industry. Resurgent demand and lower costs have helped the industry post profits after years of losses following the attacks of September 11, 2001.
Delta said it plans to give its 39,000 non-union employees 3.5 percent of the airline's new shares, valued at about USD$350 million. It also plans to pay them a cash lump-sum of about USD$130 million. The payments work out to an average of about USD$12,300 per employee.
Delta's 1,200 managers will get USD$240 million overall, or about USD$200,000 each on average. But they will not get cash, and unlike regular employees, who can sell their stock immediately, the managers' awards are in the form of restricted stock, stock options, and performance shares, vesting over periods between 6 months and three years.
Chief Executive Gerald Grinstein, who led the company during its restructuring and fended off a hostile takeover bid from US Airways, refused an exit bonus.
Instead, Delta said it is setting up two charitable foundations at Grinstein's request to help Delta employees and their families pay for college or overcome personal hardships. Grinstein, who is 74, plans to retire shortly after Delta emerges from bankruptcy.
Delta also plans to raise non-union employee wages by about 4 percent this summer, as part of a promise to lift their wages gradually to industry standards. The extra wages will add about USD$60 million to annual labor costs, Bastian said.
For union and non-union employees, Delta plans to pay out 15 percent of its annual pre-tax profit and will offer monthly incentives for meeting operational targets for on-time arrivals, flight completion, and baggage handling.
The compensation plan has been approved by Delta's creditor committee. The carrier plans to exit bankruptcy in the second quarter.
(Reuters)
WAY TO GO!!! Congratulations DL!
Tuesday March 20, 2007
Delta Plans USD$720 Mln Staff Payout
March 20, 2007
Delta Air Lines plans to reward employees and managers, but not its chief executive, with about USD$720 million in cash and stock when it exits bankruptcy in the coming weeks, the airline said.
Delta, which squeezed USD$1 billion in savings from its employees, is trying to make up for a tumultuous year and a half in bankruptcy. Since filing for Chapter 11 in September 2005, Delta slashed wages to below industry rates and dropped a pension plans for its pilots.
"These are the employees that saved the company," Chief Financial Officer Edward Bastian said in a phone interview.
Delta's generosity is fueled in part by a turnaround in the fortunes of the long-suffering US airline industry. Resurgent demand and lower costs have helped the industry post profits after years of losses following the attacks of September 11, 2001.
Delta said it plans to give its 39,000 non-union employees 3.5 percent of the airline's new shares, valued at about USD$350 million. It also plans to pay them a cash lump-sum of about USD$130 million. The payments work out to an average of about USD$12,300 per employee.
Delta's 1,200 managers will get USD$240 million overall, or about USD$200,000 each on average. But they will not get cash, and unlike regular employees, who can sell their stock immediately, the managers' awards are in the form of restricted stock, stock options, and performance shares, vesting over periods between 6 months and three years.
Chief Executive Gerald Grinstein, who led the company during its restructuring and fended off a hostile takeover bid from US Airways, refused an exit bonus.
Instead, Delta said it is setting up two charitable foundations at Grinstein's request to help Delta employees and their families pay for college or overcome personal hardships. Grinstein, who is 74, plans to retire shortly after Delta emerges from bankruptcy.
Delta also plans to raise non-union employee wages by about 4 percent this summer, as part of a promise to lift their wages gradually to industry standards. The extra wages will add about USD$60 million to annual labor costs, Bastian said.
For union and non-union employees, Delta plans to pay out 15 percent of its annual pre-tax profit and will offer monthly incentives for meeting operational targets for on-time arrivals, flight completion, and baggage handling.
The compensation plan has been approved by Delta's creditor committee. The carrier plans to exit bankruptcy in the second quarter.
(Reuters)
WAY TO GO!!! Congratulations DL!
