Bloomberg - U.S. Airline Aid May Be Tied to Executive Pay Cuts
By John Hughes
Washington, March 27 (Bloomberg) -- Two U.S. senators said Congress may require airline executives to forgo pay increases as a condition of providing as much as $3 billion in government aid to avoid bankruptcies.
It''s insulting when they lay off thousands of people and then pay top executives millions of dollars in bonuses, said Senator John McCain, chairman of the Senate Commerce, Science and Transportation Committee. I''m not the only person that''s angry. Everybody''s angry.
McCain, an Arizona Republican, told reporters he wants to add a provision to an airlineaid bill that would prevent such pay increases in similar circumstances. Senator Kay Bailey Hutchison, a Texas Republican and member of McCain''s committee, said the legislation may mandate cuts in employee and executive pay.
Delta Air Lines Inc. Chief Executive Officer Leo Mullin got a $12.9 million pay package in 2002, according to a Securities and Exchange Commission filing this week.
Northwest Airlines Corp. CEO Richard Anderson received $2.8 million, 75 percent more than his pay package in 2001, and Continental Airlines Inc. CEO Gordon Bethune received $11.9 million, more than twice what he received in 2001, according to filings this week.
US Airways
US Airways Group Inc. Chief Executive David Siegel earned $1.45 million from his salary, bonus and other compensation last year, according to a filing published today. He also received restricted stock previously worth $2.36 million and 750,000 options, both of which are now worthless as a result of the company''s bankruptcy filing in August.
U.S. airlines cut 98,000 jobs after terrorist attacks on Sept. 11, 2001, and another 10,000 jobs last week, according to the Air Transport Association, a trade group for major U.S. airlines. The carriers are seeking $4 billion of tax, security and insurance aid from the government to offset expected losses from the Iraq war.
UAL Corp.''s United Airlines and US Airways are operating in bankruptcy. AMR Corp.''s American Airlines, the world''s biggest carrier, may seek bankruptcy protection as early as next week, people familiar with the matter said.
''Getting Closer''
House and Senate lawmakers moved toward an agreement today on an airline-aid proposal that would be added as soon as Tuesday to President George W. Bush''s $74.7 billion proposal to fund the Iraq war. Lawmakers want to pass the war-aid bill by April 11.
We''re getting closer to an agreement, said James May, the Air Transport Association president, in an interview in a U.S. Capitol hallway.
I don''t think we''re far away from a final proposal, said Senator John Rockefeller of West Virginia, top Democrat on the Senate Aviation Subcommittee.
An aid proposal of around $3 billion would include security cost reimbursements, an extension of war-risk insurance subsidies and some tax relief on a temporary basis, Hutchison said.
McCain said lawmakers still must sign off on a proposal and details still need to be worked out. One issue is whether aid would come from the U.S. Treasury or a surplus in a government trust fund that finances aviation projects, said House Appropriations Chairman Bill Young, a Florida Republican.
Executives from Delta, American, US Airways and other airlines made personal visits to Young and other lawmakers today to press their case for aid.
Representative James Oberstar of Minnesota and other Democratic transportation leaders issued a statement in support of aid after meeting with airline executives.
To not act is not an option, the statement said.
By John Hughes
Washington, March 27 (Bloomberg) -- Two U.S. senators said Congress may require airline executives to forgo pay increases as a condition of providing as much as $3 billion in government aid to avoid bankruptcies.
It''s insulting when they lay off thousands of people and then pay top executives millions of dollars in bonuses, said Senator John McCain, chairman of the Senate Commerce, Science and Transportation Committee. I''m not the only person that''s angry. Everybody''s angry.
McCain, an Arizona Republican, told reporters he wants to add a provision to an airlineaid bill that would prevent such pay increases in similar circumstances. Senator Kay Bailey Hutchison, a Texas Republican and member of McCain''s committee, said the legislation may mandate cuts in employee and executive pay.
Delta Air Lines Inc. Chief Executive Officer Leo Mullin got a $12.9 million pay package in 2002, according to a Securities and Exchange Commission filing this week.
Northwest Airlines Corp. CEO Richard Anderson received $2.8 million, 75 percent more than his pay package in 2001, and Continental Airlines Inc. CEO Gordon Bethune received $11.9 million, more than twice what he received in 2001, according to filings this week.
US Airways
US Airways Group Inc. Chief Executive David Siegel earned $1.45 million from his salary, bonus and other compensation last year, according to a filing published today. He also received restricted stock previously worth $2.36 million and 750,000 options, both of which are now worthless as a result of the company''s bankruptcy filing in August.
U.S. airlines cut 98,000 jobs after terrorist attacks on Sept. 11, 2001, and another 10,000 jobs last week, according to the Air Transport Association, a trade group for major U.S. airlines. The carriers are seeking $4 billion of tax, security and insurance aid from the government to offset expected losses from the Iraq war.
UAL Corp.''s United Airlines and US Airways are operating in bankruptcy. AMR Corp.''s American Airlines, the world''s biggest carrier, may seek bankruptcy protection as early as next week, people familiar with the matter said.
''Getting Closer''
House and Senate lawmakers moved toward an agreement today on an airline-aid proposal that would be added as soon as Tuesday to President George W. Bush''s $74.7 billion proposal to fund the Iraq war. Lawmakers want to pass the war-aid bill by April 11.
We''re getting closer to an agreement, said James May, the Air Transport Association president, in an interview in a U.S. Capitol hallway.
I don''t think we''re far away from a final proposal, said Senator John Rockefeller of West Virginia, top Democrat on the Senate Aviation Subcommittee.
An aid proposal of around $3 billion would include security cost reimbursements, an extension of war-risk insurance subsidies and some tax relief on a temporary basis, Hutchison said.
McCain said lawmakers still must sign off on a proposal and details still need to be worked out. One issue is whether aid would come from the U.S. Treasury or a surplus in a government trust fund that finances aviation projects, said House Appropriations Chairman Bill Young, a Florida Republican.
Executives from Delta, American, US Airways and other airlines made personal visits to Young and other lawmakers today to press their case for aid.
Representative James Oberstar of Minnesota and other Democratic transportation leaders issued a statement in support of aid after meeting with airline executives.
To not act is not an option, the statement said.
