Here is an article on Mr. Floley's raise. If I get fuloughed, I'll become a janitor, the quality of life will be so much better.
Mesaba Holdings investors had a tough ride in 2001, but the year turned out pretty well for the regional carrier's chief executive.
Paul F. Foley, who also is president of Mesaba Airlines, received a 36 percent pay increase in 2001, according to Mesaba's proxy statement released Thursday.
His total salary and bonus increased to $640,577, and he received 250,000 stock options, although they came at purchase prices that make them worth virtually nothing today.
Foley has guided the carrier through a time of crisis, improving its operating performance and controlling costs as air travel demand dropped and now slowly recovers. Mesaba's board of directors increased his salary to help retain Foley during the uncertainty after Sept. 11, according to the proxy.
As with other carriers, the terrorist attacks cut into Mesaba's earnings and hammered its share price. Mesaba shares traded near $13 in early 2001 and closed Thursday at $6.20, having traded as low as $4.95 in the past year.
Foley, 49, wasn't available for comment Thursday. His carrier, which flies regional traffic for Northwest Airlines, has been diminished in the eyes of analysts and investors because of few growth prospects. Foley has said he'd like to expand Mesaba's business beyond its contract with Northwest.
Mesaba has long wanted to win new regional jets from Northwest, which said in its earnings conference call Thursday that it has yet to decide where its next batch of jets will go. Northwest so far has committed 83 new jets to its wholly owned regional partner, Pinnacle Airlines, which it intends to spin off in a stock offering.
Mesaba earned $7.8 million in its fiscal year 2001 that ended March 31, down from $19.8 million in its previous fiscal year. Revenue dropped 5 percent to $416 million, as Mesaba cut its contract charges to Northwest by 10 percent briefly to help the larger carrier.
Northwest controls 40 percent of Mesaba's shares and pays a flat fee to Mesaba for each seat it flies, accounting for nearly all of Mesaba's revenue.
Foley has re-engineered every process the carrier performs to new standards. Mesaba's ground employees operate like racing "pit crews" when servicing airplanes that come to gates. The results have been industry-leading on-time and flight-completion statistics among regional airlines and a platform to expand the company with new flying, he has said in previous interviews.
Foley also cut the carrier's costs after Sept. 11, laying off 400, cutting several managers and allowing the carrier to post a modest profit while other carriers lost money for the year.
When he joined Mesaba in October 1999 from cargo hauler Atlas Air, Foley took nearly all of his first-year compensation — $270,000 — and bought Mesaba shares in a bet that the carrier would soon take off. His purchase of 29,500 shares at prices just above $9 per share is worth about a third less today.
Mesaba's compensation committee met in November of last year and took into account the events of Sept. 11 when setting Foley's pay.
