SF Gate: United's chief gets posh digs

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/14/BU138800.DTL
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Friday, February 14, 2003 (SF Chronicle)
United's chief gets posh digs
David Lazarus


   Glenn Tilton, United Airlines' chief executive officer, will be in San
Francisco today to cheerlead for the bankrupt company's restructuring
plan.
   I wonder if he'll also address the fact that even though he's been runni=
ng
the cash-poor Chicago company since September, he still hasn't moved from
his San Francisco home and has, until this week at least, resided in a
luxury hotel whenever he had to visit the Windy City.
   United insiders tell me that the airline, which filed for Chapter 11
protection in December and posted a $3.2 billion loss last year, has been
paying about $18,000 a month to put up Tilton and his wife at the swanky
Four Seasons Hotel in downtown Chicago.
   Chris Brathwaite, a United spokesman, confirmed that Tilton has what may
be the longest commute in the business world.
   "He's here during the week and goes back to San Francisco on weekends,"
Brathwaite said. "He's still looking for a permanent residence in
Chicago."
   So has Tilton been staying at the Four Seasons on weekdays?
   "I don't know anything about that," Brathwaite said, a chilly tone
entering his voice.
   He called back a few minutes later to say that Tilton now has an apartme=
nt
in Chicago. "He's not staying at the Four Seasons," Brathwaite said.
   If so, that's a new development. A receptionist at the hotel told me that
Tilton and his wife checked out on Sunday but have been regular customers
for months.
   "They're here all the time," the receptionist said. "They practically li=
ve
here."
   The Four Seasons has a special residency rate for long-term guests, with
suites going for between $6,000 and $8,000 a month.
   But the Chicago hotel is like the San Francisco Four Seasons in that it
also has a limited number of full-service condo units available for
corporate clients. These can run as high as -- you guessed it -- $18,000 a
month.
   "We have an enormous number of CEOs as residents," one Four Seasons work=
er
said of the Chicago hotel.
   I pointed out to United's Brathwaite that the Four Seasons also has
apartments. Is that where he meant Tilton's staying?
   Brathwaite replied only that, as far as he knows, Tilton is not at the
hotel, which didn't quite answer the question, but so be it.
   This isn't the first time Tilton's cozy deal with the beleaguered airline
has been an issue. As I reported in December, the former vice chairman of
San Francisco's ChevronTexaco is pulling down an annual salary of
$950,000.
   No, sorry, that's what he was making in his original pay packet. Tilton
subsequently agreed to an 11 percent salary cut to show workers that he
feels their pain. He now scrapes by on $845,500 a year.
   Tilton's also making do with a $3 million signing bonus and a $4.5 milli=
on
trust to replace his ChevronTexaco retirement plan. Oh, and don't forget
the 100,000 shares in United's parent company, UAL Corp.
   A committee representing United's creditors has told the airline that it
didn't exercise good business judgment in handing Tilton such a generous
compensation package.
   The committee said that some terms of the deal were unreasonable and that
UAL's board of directors had been misinformed when it gave its blessing to
the deal.
   On Tuesday, UAL filed an emergency motion with the Bankruptcy Court
seeking to block the creditors' committee from questioning Tilton about
his pay package.
   United's flight attendants union filed its own objection to Tilton's
compensation in January. It asked the Bankruptcy Court to delay approving
Tilton's contract until after workers' contracts are finalized.
   United's lawyers countered last week that approval of Tilton's deal is
"incredibly important at this stage" and that failure to do so "would be
the worst form of business judgment."
   Sara Dela Cruz, a spokeswoman for the Association of Flight Attendants,
said that Tilton's multimillion-dollar compensation package is "a tough
pill to swallow" for longtime airline employees making just a fraction of
what the new boss is pulling down.
   "Flight attendants can't comprehend the amount of money Tilton's making,"
she said. "How many years will it take for a flight attendant to make what
he makes in a year?"
   United insists that Tilton isn't making any more than most other CEOs in
similar positions. On the other hand, most other CEOs aren't asking
workers to swallow more than $2 billion in cuts to pay and benefits.
   Brathwaite, the United spokesman, said Tilton is barnstorming the world =
to
get the message out to company employees that their future is in good
hands. He was in Los Angeles on Thursday and is in San Francisco today;
then he's off to Europe.
   Specifically, Tilton is addressing union leaders' concerns that creation
of a separate discount carrier to compete with the likes of JetBlue will
ultimately lead to increased layoffs for the main airline.
   "He wants employees to hear about the business plan firsthand," Brathwai=
te
said, adding that United still hopes to emerge from bankruptcy by
mid-2004.
   Local employees tell me, though, that they intend to focus today's little
get-together on Tilton's various perks, including prolonged stays at a
certain Chicago hotel.
   "We're going to crucify him," one worker said.
   Ouch.
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Copyright 2003 SF Chronicle

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