Continental sees "significant" loss, pays CEO $7.6 mln = = = = Wednesday March 26, 6:38 PM EST = (Recasts throughout, adds byline) By Jonathan Stempel NEW YORK, March 26 (Reuters) - Continental Airlines Inc. (CAL), the No. 5= U.S. carrier, on Wednesday said it expects to report "significant" first= quarter and full year losses as air traffic declines because of the war = in Iraq while terrorism fears and fuel and security costs rise. "Current trends in the airline industry make it likely that we will conti= nue to post significant losses for the foreseeable future," the Houston-b= ased airline said. Analysts polled by Thomson First Call expect the airline to lose $2.25 pe= r share this quarter and $3.44 per share in 2003. Continental, which posted a $451 million net loss in 2002, also said it a= warded Chairman and Chief Executive Gordon Bethune a pay package for 2002= , excluding options, worth about $7.63 million, more than 82 percent abov= e the $4.18 million he was awarded the previous year. Including options, = Bethune's 2002 pay package was worth about $11.9 million. = Continental discussed its finances and executive pay packages in a proxy = statement filed with the U.S. Securities and Exchange Commission. Delta Air Lines Inc. (DAL), the No. 3 U.S. carrier, on Tuesday said it aw= arded its Chairman and CEO, Leo Mullin, a $13 million pay package for 200= 2. Last week Continental said it will cut 1,200 jobs by year end and is targ= eting $500 million of annual cost cuts. Bethune said "we need to look in = every nook and cranny" for savings. The Air Transport Association, an industry group which represents major c= arriers, on Wednesday said U.S. bookings are down 20 percent for the next= two to three months, while international bookings are down more than 40 = percent in some regions. In its proxy statement, Continental said it ended 2002 with about $1.3 bi= llion of cash and equivalents, up from $1.09 billion a year earlier, but = is burning through about $1.5 million a day. It also said it expects 2003= pension expenses to total about $326 million, up from $185 million in 20= 02. Continental shares, which closed up 5 cents at $5.89 in Wednesday trading= on the New York Stock Exchange, have fallen 79 percent in the last year.= Continental filed its proxy statement after U.S. markets closed. PAY PACKAGE According to the proxy statement, the 61-year-old Bethune, last year rece= ived a salary of $1,063,350, up from $794,900 in 2001. His bonus for 2002= was $651,563, down from $967,320 a year earlier. Bethune has been CEO si= nce November 1994 and chairman since September 1996. Bethune waived his salary and cash bonus for the period between Sept. 26 = and Dec. 31, 2001, as did new Chief Operating Officer Larry Kellner, the = statement shows. Bethune for 2002 also received $2.32 million of restricted stock, $3.52 m= illion of long-term incentive payments and $77,260 of other compensation,= as well as 800,000 stock options valued at $4.24 million as of the grant= date, the statement shows. Continental said it made the executive compensation awards after determin= ing that the airline "significantly outperformed" major hub-and-spoke com= petitors in 2002. It said it wants to keep current management intact and "motivate manageme= nt to take aggressive actions to maximize the chances of recovery and inc= rease stockholder value." Continental's proxy statement also shows that Kellner, who became chief o= perating officer this week, received a $6.65 million pay package in 2002,= including $1.81 million in stock options, while his predecessor, C.D. Mc= Lean, received about $5.07 million, including $1.46 million in stock opti= ons. = =A92003 Reuters Limited. = Roger EWROPS