Union Group Balks At UAL Executive Compensation
News that Glenn Tilton, chief executive of UAL
Tilton, who led the parent of the No. 2 U.S. airline through a more-than-three-year bankruptcy, received a compensation package last year that included salary, stock options and other perks, according to a government filing.
A group called UAL Union Coalition balked at the incomes of UAL's management in a statement complaining that workers made painful wage and benefits concessions during the bankruptcy that ended in early 2006.
"The dedication, sweat and sacrifice of all United employees have led United Airlines on the road toward sustained profitability," said the group, whose members include unions representing UAL's pilots, flight attendants and mechanics.
"It is not unreasonable to demand our fair share in the financial rewards that management currently enjoys," the group said.
But the company said in a statement the management equity incentive plan was approved last year by the bankruptcy court and the airline's major creditors which "benefited from the involvement and oversight of our unions."
The airline also noted it awarded more than 34.7 million shares of the new company to more than 64,000 current and former employees when it left Chapter 11. The value of that distribution was more than $15 billion at the end of last year, it said. "Executives were not eligible for this award," United added.
UAL slashed its costs in bankruptcy by $7 billion a year, cut its work force by 25 percent and jettisoned its underfunded pensions. The company has about 57,000 employees worldwide, according to its Web site.
Airline labor unions throughout the industry are riled about management pay. Much of that income, however, is pinned to company performance and is therefore at risk.
Shares of UAL have fallen about 10% since new shares were issued in February 2006. UAL shares closed at $38.36 on Nasdaq on Tuesday.