After the announcement to hire Goldman's to sell the company, this was to be expected I guess:
http://www.topix.net/content/trb/3990559583400531427232481861752451326169
Chicago Tribune
By Ameet Sachdev
September 30, 2006
Everyone is looking for a golden parachute.
United Airlines' parent company extended the employment contract on Friday of Chairman and Chief Executive Glenn Tilton by four years and boosted his salary and potential stock awards, rewarding him for piloting the carrier through bankruptcy and back to profitability.
Tilton, whose original five-year contract was set to expire in September 2007, will be paid a salary of $850,000 a year under the new pact that will run through Sept. 1, 2011, according a regulatory filing by UAL Corp.
That's a 40 percent raise over his current salary of $605,625. Tilton cut his salary three times while the Elk Grove Township-based airline was in bankruptcy from December 2002 until February. But when United exited bankruptcy, Tilton received restricted stock and options representing about 1.1 percent ownership in the new company, about 1.3 million shares.
Starting next year, Tilton also will be eligible for long-term incentive awards, which typically comprise restricted shares and options. At a minimum these annual payouts will be equal to four times his new salary, or $3.4 million, United said in the filing.
The contract extension comes as speculation about United's future intensifies. The airline reportedly has hired New York investment bank Goldman Sachs Group Inc. to explore strategic options, including a merger. Meanwhile, Tilton continues to stress the need for domestic airline consolidation as a way to better compete with growing international carriers.
'Under Glenn Tilton's leadership, United completed a $23 billion restructuring and returned to profitability, and we look forward to Glenn's ongoing leadership as United implements its strategic business plan,' James O'Connor, UAL's lead director, said in a statement.
Tilton's raise and additional stock compensation has the potential to rankle United's rank-and-file, who have endured pay cuts and lost pensions during bankruptcy. Tilton's contract runs beyond United's labor contracts, which expire at the end of 2009, a United spokeswoman said.
United's flight attendants union declined to comment on Tilton's extension, and calls to representatives of the pilots and machinists unions were not returned.
United also locked up another senior executive. Pete McDonald, executive vice president and chief operating officer, who received a job offer from an undisclosed company, agreed to a four-year contract.
McDonald will receive a $2.6 million retention bonus, payable over three years, and earn a $700,000 annual salary in the deal that runs through Oct. 1, 2010. In return for the security of a long-term contract, McDonald will forfeit some restricted shares and stock options.
McDonald's recruitment by another company may have triggered the board to start negotiating a new deal for Tilton, said Robert Mann, an aviation consultant. Without an extension, the board might have risked losing the 58-year-old Tilton.
The two employment pacts are unrelated, said United spokeswoman Jean Medina.
'Having a new agreement in place for Glenn is important to ensure continuity,' she said.
McDonald's contract also may trigger similar pacts or retention bonuses for other senior-level executives, Mann said.
'Once you hire the investment bankers, then everybody gets antsy,' Mann said. 'Everyone is looking for a golden parachute.'
In other personnel news, United promoted Graham Atkinson to the new position of executive vice president and chief customer officer. He is responsible for improving the airline's customer service, which has declined in key areas this year.
In July, United reported 5.4 mishandled bags per 1,000 passengers, up from 4.35 in the same month a year ago, according to the latest report from the Department of Transportation. United also had the most consumer complaints of any domestic airline in July.
McDonald, in a call to employees Friday, cited a need to get 'back to the fundamentals' of on-time performance, low cancellations, reliable baggage handling and courteous service.
'From 2003 to 2005, we led the industry in operational performance,' McDonald said. 'We need to get back to the leadership position.'
---------- [email protected]
Copyright © 2006 Chicago Tribune, All Rights Reserved.
http://www.topix.net/content/trb/3990559583400531427232481861752451326169
Chicago Tribune
By Ameet Sachdev
September 30, 2006
Everyone is looking for a golden parachute.
United Airlines' parent company extended the employment contract on Friday of Chairman and Chief Executive Glenn Tilton by four years and boosted his salary and potential stock awards, rewarding him for piloting the carrier through bankruptcy and back to profitability.
Tilton, whose original five-year contract was set to expire in September 2007, will be paid a salary of $850,000 a year under the new pact that will run through Sept. 1, 2011, according a regulatory filing by UAL Corp.
That's a 40 percent raise over his current salary of $605,625. Tilton cut his salary three times while the Elk Grove Township-based airline was in bankruptcy from December 2002 until February. But when United exited bankruptcy, Tilton received restricted stock and options representing about 1.1 percent ownership in the new company, about 1.3 million shares.
Starting next year, Tilton also will be eligible for long-term incentive awards, which typically comprise restricted shares and options. At a minimum these annual payouts will be equal to four times his new salary, or $3.4 million, United said in the filing.
The contract extension comes as speculation about United's future intensifies. The airline reportedly has hired New York investment bank Goldman Sachs Group Inc. to explore strategic options, including a merger. Meanwhile, Tilton continues to stress the need for domestic airline consolidation as a way to better compete with growing international carriers.
'Under Glenn Tilton's leadership, United completed a $23 billion restructuring and returned to profitability, and we look forward to Glenn's ongoing leadership as United implements its strategic business plan,' James O'Connor, UAL's lead director, said in a statement.
Tilton's raise and additional stock compensation has the potential to rankle United's rank-and-file, who have endured pay cuts and lost pensions during bankruptcy. Tilton's contract runs beyond United's labor contracts, which expire at the end of 2009, a United spokeswoman said.
United's flight attendants union declined to comment on Tilton's extension, and calls to representatives of the pilots and machinists unions were not returned.
United also locked up another senior executive. Pete McDonald, executive vice president and chief operating officer, who received a job offer from an undisclosed company, agreed to a four-year contract.
McDonald will receive a $2.6 million retention bonus, payable over three years, and earn a $700,000 annual salary in the deal that runs through Oct. 1, 2010. In return for the security of a long-term contract, McDonald will forfeit some restricted shares and stock options.
McDonald's recruitment by another company may have triggered the board to start negotiating a new deal for Tilton, said Robert Mann, an aviation consultant. Without an extension, the board might have risked losing the 58-year-old Tilton.
The two employment pacts are unrelated, said United spokeswoman Jean Medina.
'Having a new agreement in place for Glenn is important to ensure continuity,' she said.
McDonald's contract also may trigger similar pacts or retention bonuses for other senior-level executives, Mann said.
'Once you hire the investment bankers, then everybody gets antsy,' Mann said. 'Everyone is looking for a golden parachute.'
In other personnel news, United promoted Graham Atkinson to the new position of executive vice president and chief customer officer. He is responsible for improving the airline's customer service, which has declined in key areas this year.
In July, United reported 5.4 mishandled bags per 1,000 passengers, up from 4.35 in the same month a year ago, according to the latest report from the Department of Transportation. United also had the most consumer complaints of any domestic airline in July.
McDonald, in a call to employees Friday, cited a need to get 'back to the fundamentals' of on-time performance, low cancellations, reliable baggage handling and courteous service.
'From 2003 to 2005, we led the industry in operational performance,' McDonald said. 'We need to get back to the leadership position.'
---------- [email protected]
Copyright © 2006 Chicago Tribune, All Rights Reserved.
