This article from NYTimes.com has been sent to you by psa188@xxxxxxxxx Gosh, it looks as if Glenn F. Tilton is really sucking in his gut here. How's the poor guy going to survive?? psa188@xxxxxxxx United Chief Takes Pay Cut but Retains Other Payments April 5, 2003 By EDWARD WONG United Airlines said yesterday that Glenn F. Tilton, its chief executive, would take a 14 percent cut in his base salary this year, though Mr. Tilton's much more significant stock and cash bonuses and other compensation, worth millions, will remain intact. The pay cut for Mr. Tilton follows similar moves involving several airline executives this week and comes amid growing criticism of airline executives' compensation at a time when the industry is struggling. But the other executives who took pay cuts this week - Leo F. Mullin of Delta Air Lines and Donald J. Carty of American Airlines - have also agreed to give up bonuses. And Mr. Mullin is giving up stock-based retention awards valued at $5.5 million. Mr. Tilton is now expected to earn $712,500 in salary this year. He joined UAL, the parent company of United, in September and is trying to lead the company out of bankruptcy court protection. He has been negotiating with unions for significant wage concessions, recently reaching a tentative agreement with the pilots' union. Mr. Tilton is also trying to start a low-cost carrier within UAL, which would result in many layoffs at United as routes are cut to make room for the carrier. The latest salary cut comes on top of a 11 percent cut that Mr. Tilton and other top executives at United agreed to take in December. United reported a net loss of $3.2 billion last year, while Mr. Tilton received a compensation package worth as much as $9.65 million. His base salary accounted for only 3.2 percent of that total, as Mr. Tilton received, among other payments, a $3 million signing bonus, $287,000 in restricted stock and 1.15 million stock options valued at $1.46 million as of the grant date. UAL also agreed to pay $4.5 million into three trusts set up for Mr. Tilton's pension, with the first installment to come on Jan. 1, 2004. Chris Brathwaite, a United spokesman, said those payments would continue because they compensate for retirement money that Mr. Tilton gave up when he left ChevronTexaco last September. Members of Congress are working out legislation that would give the battered industry more than $3 billion in aid. But they have sharply criticized executives for receiving large compensation packages last year while their companies were losing billions. Senator John McCain, Republican of Arizona, singled out Mr. Mullin of Delta, who had a package worth $13.5 million. Delta lost $1.27 billion last year, and it has been negotiating with its pilots' union for significant concessions that would contribute to $2.5 billion in total cuts by 2005. On Thursday, Mr. Mullin said he would take a cut on his 2003 base salary, to $596,250 from $715,500. He added that he would forgo a potential bonus of $1 million and give up stock-based retention awards valued at $5.5 million. Still, Mr. Mullin did not give up millions of dollars that Delta had paid to a special executive pension trust fund set up in his name. Delta workers and former executives have criticized those payments. Mr. Carty, chief executive of AMR, the parent company of American Airlines, said on Monday that he would take 33 percent off his base salary and forgo a bonus. Mr. Carty had been negotiating with workers to gain concessions worth $1.8 billion a year. United, meanwhile, is starting to react to the severe drop-off in passenger traffic because of fears of the mysterious respiratory illness that has spread in Asia and reached into Canada. Joe Hopkins, a company spokesman, said yesterday that United was canceling its daily flight between Singapore and Hong Kong from April 7 to April 16 and April 22 to April 29. United has 18 percent of its seat capacity on Asian routes, and Hong Kong has been harder hit by fears of the disease than any other city. Northwest Airlines, the other domestic carrier with extensive service in Asia, said yesterday it was not cutting any flights. On Wednesday, James Higgins, an analyst at Credit Suisse First Boston, downgraded his rating on Northwest stock to neutral from outperform, predicting that the outbreak of the disease would soften traffic in Asia. He said Northwest generates 22 percent of its revenue and has 26 percent of its seat capacity on Asian routes. US Airways, which emerged from bankruptcy protection on Monday, said yesterday that David G. Bronner, chief executive of the Retirement Systems of Alabama, would be chairman of its board. The Alabama pension fund is the carrier's main lender and has voting control of the board. http://www.nytimes.com/2003/04/05/business/05AIR.html?ex=1050559036&ei=1&en=e0a128589a2e02a4 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@xxxxxxxxxxx or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@xxxxxxxxxxxx Copyright 2003 The New York Times Company