Northwest flight attendants attack executives pay

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04/25/2003 - Updated 02:14 PM ET
Northwest flight attendants attack executives' pay

NEW YORK (Reuters) ? Northwest Airlines flight attendants on Friday blasted
the carrier's top executives for accepting hefty compensation packages
while some attendants have been laid off as the airline's losses mount. At
a sometimes confrontational annual meeting, the No. 4 U.S. airline defended
executives' compensation, a hot-button topic at many carriers, most notably
at American Airlines Inc. Northwest's flight attendants, who protested
outside the meeting in Manhattan, asked management to rescind bonuses and
pare or eliminate stock option awards. "What this dialogue today was about
was, are we really all in this together, or once again are we expected to
take cuts while making executives very rich," said Mollie Reiley, an
official of Teamsters union Local 2000, which represents Northwest's
attendants. "No one's interested in doing that, quite frankly. Our members
would rather go into bankruptcy." American's failure to disclose executive
bonuses and pensions while extracting $1.8 billion of employee concessions
outraged its unions and led on Thursday to the resignation of Chief
Executive Donald Carty.
Northwest executives parried concerns that the airline might seek
bankruptcy protection, following the lead of UAL Corp.'s United Airlines
Inc. and US Airways Group Inc., as war, terrorism fears, security hassles
and the SARS virus crimp travel. American, a unit of AMR Corp., on Friday
appeared for now to have skirted its own Chapter 11 filing by winning
concessions from its unions. "I'm not going to sit here and say we're going
to file for bankruptcy," said Chairman Gary Wilson. He added, however: "If
we're not cost competitive, we can't survive." Northwest shareholders
rejected a proposal to force management to submit for shareholder approval
any anti-takeover "poison pill," such as share issuance that might cause
the value of existing shareholders' stakes to fall. The proposal received a
preliminary 44 percent of the votes tallied.

MANAGEMENT CONCESSIONS
Chief Executive Richard Anderson said in an interview the carrier's
management is prepared to share in cost cuts. Anderson's 2002 compensation
totaled about $2.8 million, including a $500,000 salary and $250,000 bonus,
Northwest's proxy filing showed. That's below the eight-figure packages
commanded by Delta Air Lines Inc. CEO Leo Mullin and Continental Airlines
Inc. CEO Gordon Bethune, but above that of US Airways Group Inc.'s CEO
David Siegel. "We've dealt responsibly with all the areas of executive
compensation ... by any objective measure," he said. "Everybody will have a
shared sacrifice, and that sacrifice needs to be more heavily weighted
toward people that make more." The flight attendants aren't all convinced.
"We're all working short crew, we're working longer days, and he all wants
us to do it for less money," said Josh Zivick, 32, who has for five years
worked for Northwest. "It's not going to happen." Northwest posted a $396
million first quarter net loss, or $4.62 per share. In March it cut its
schedule and announced 4,900 job cuts because of the Iraq war. It finished
the quarter with $2.3 billion of cash, more than at AMR and UAL. Anderson
said Northwest's code-share alliance with No. 3 rival Delta and No. 5
Continental, which experts said might net each carrier $200 million, might
get under way this year. Northwest shares traded Friday afternoon on the
Nasdaq at $7.43, down 6 cents. They closed one year ago at $19.11.


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