Bankrupt Pinnacle should rethink big raises for execs, lawmakers say
Updated: April 4, 2012, 10:54 PM

WASHINGTON -- The Buffalo area's three House members and New York's two senators Wednesday urged Pinnacle Airlines executives to rethink the big raises they recently received in light of revelations that the bankrupt airline is struggling to pay its pilots.

"It is reprehensible and unconscionable that your company would shortchange its pilots, who are critical to the safety of the flying public, while approving hundreds of thousands of dollars in extra payment for its corporate officers," the lawmakers said in a letter to John G. Spanjers, senior vice president and chief operating officer at Pinnacle.

"On behalf of our constituents, we ask that Pinnacle executives, including yourself, reconsider the propriety of accepting generous raises while pilots in your employ are waiting to be paid," the lawmakers added.

The Buffalo News reported Wednesday that Pinnacle -- which owns Colgan Air, operator of Continental Connection Flight 3407, which crashed in Clarence Center in 2009 -- was struggling to pay its pilots. Low pilot pay was one of the issues that was raised in the investigation of the crash, which claimed 50 lives.

Despite the pay problems -- which the company blamed largely on a new software system -- Pinnacle last month boosted the annual salary of CEO Sean E. Menke from $425,000 to $675,000. Spanjers, meanwhile, got a raise from $275,000 to $400,000.

Pinnacle said those raises came in conjunction with new duties stemming from the departure of other executives and the company's efforts to reorganize. Those efforts culminated in a bankruptcy filing Sunday, less than two weeks after the raises were announced.

Local lawmakers didn't think very much of the raises at Pinnacle.
"The tragedy of Flight 3407, right in the heart of my district, highlights the dangers of underpaid and overworked pilots, and it's unconscionable for their corporate officers to receive hundreds of thousands of dollars in pay increases right before declaring bankruptcy," said Rep. Kathleen C. Hochul, D-Amherst.
Sen. Charles E. Schumer, D-N.Y, agreed. He made reference to the fact that in addition to the raises for Pinnacle's top executives, departing CEO Philip H. Trenary left the company with a $1.7 million consulting deal.
"These latest facts are appalling, and Pinnacle needs to reset their priorities immediately," Schumer said. "Instead of providing golden parachutes for retiring CEOs, Pinnacle should make sure its pilots are paid a decent wage on time and that they put passenger safety above personal perks."

Sen. Kirsten E. Gillibrand, D-N.Y., also signed the letter to Pinnacle, as did Reps. Brian Higgins, D-Buffalo, and Louise M. Slaughter, D-Fairport.
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