Finally, an objective editorial...
 

Copied and pasted from the "Milwaukee Journal Sentinel":

http://www.jsonline.com/story/index.aspx?id=604434



Editorial: First-class tickets

The unfortunate adventures of an airline that wrung millions from its employees but managed to take care of the guys at the top.

From the Milwaukee Journal Sentinel
Posted: May 13, 2007

Doug Steenland led his airline into bankruptcy and is now presiding over its emergence from Chapter 11.

For this heavy lifting, the chief executive of Northwest Airlines will receive $26.6 million worth of shares in the reorganized company. He'll get $20.8 million in restricted shares and stock options valued at $5.8 million. The grants vest over four years, and the amount Steenland actually receives will depend on the eventual price of the company's stock.

The company says its "management incentive equity plan" is absolutely necessary to retain its top talent.

What did the employees get?

It's not so much what they got but what they gave up - $1.4 billion in labor costs through wage and benefit cuts and work rule changes. Flight attendants recently agreed to cut their pay by between $15,000 to $18,000 per flight attendant.

Now all of this may have been necessary for an airline on the rocks. But given that, wouldn't it have made sense for Steenland and Northwest to be, shall we say, just a bit more judicious?

Apparently, the airline's compensation committee has no worries about morale. Its plan also calls for the company's four executive vice presidents to receive between

$10 million and $13.5 million a piece.

Said Northwest: "Retention of its top 400 leaders is critical to Northwest's ability to achieve its business plan over the next five years and compete with other large corporations for top-tier talent."

That's some talent.

This is why the airline won't survive

and put UAL in there to..

It's a huge part of the reason most American corporations are in such trouble and cannot compete with foreign companies. Just look at Ford vs. Toyota. Ford lost 12.1 billion last year and compensated their CEO with 28.18 million... in just his first four months on the job. I have no stats on Toyota, but look how well they are doing against Ford and other American companies. What the hell happened that allowed ONE person to be worth that much? So much for profit sharing. I know my company just came out of bankruptcy, and our "great" leader will be seeing some nice bonuses while we all (not just the pilots) take pay cuts. Every time I see him I want to ask him how he justifies his worth.

Retention, Hah!
 

Delta used a similar fig leaf to justify bankruptcy-proof pensions for top executives, but they failed to include a requirement that the recipients actually stay around. So they all grabbed the SERPs and fled.

EXACTLY!!! They can b!tch and moan all day long about how the company will go into the ground if they don't get BILLIONS including lost pensions and livable wages from the rank and file and then they turn around and pat themselves on the back for it with millions in compensation for a 'job well done'. They would have the public believe that pilots are greedy when antics like this is the very reason the pilots are going to hold the line for what they had 'stolen' from them. This is what the public always seems to fail to realize!

Americans (I'm one of them) are sheep in general. When one CEO gets away with it, they all will. Any industry, at any management level.

edit: I'm an American, not a sheep :)

<RANT>
The only solution to the compensation issue is for the Board of Directors to refuse to compensate CEO's at those levels. Of course, its awfully hard to get them to do that when all of the CEO's are on each other's BoD's. You scratch my back, I'll scratch yours. University Presidents are doing the same thing right now. One ups their pay so the others convince the boards to up their own to "retain talent." Its an unending spiral (well except for bankruptcy, but that doesn't seem to affect the airlines). Generally, I'm against government intervention in business affairs, I think its bad for capitalism. I think we may be seeing a time where we require some regulation as to the compensation of publicly held executives.

My biggest beef is that the money that is being raked in is not reinvested in the US economy right now. A publicly held company must grow to remain viable. I also feel that being publicly held gives the company an obligation to benefit the national economy. If you want to just pocket the cash, you should stay privately held.

If all of that money ends up in the hands of individual CEO's and not the public market, sooner or later the American consumer will have no spending power left. It does us(the US economy) no good if the people can't buy things. We need an incentive to get those funds back into our economy instead of foreign investments and the wallets of the top 1%.</RANT>

FYI, editorials aren't supposed to be objective. They are the forum for the editor's opinion.

I'd say editorials can have an unbiased "objective opinion".

BZZZ! Wrong! Thank you for playing!

An opinion, by definition, contains the bias of its author.

Yes, you are right on that. Hope the consolation prize is ok.

http://www.forbes.com/feeds/ap/2007/...ap3725054.html

Associated Press
Northwest to Give Outgoing Chairman $2M
By JOSHUA FREED 05.15.07, 6:33 PM ET

Northwest Airlines said it would give outgoing chairman Gary Wilson a $2 million going-away present, drawing immediate court objections from unions who endured sharp pay cuts while the airline reorganized under bankruptcy protection.

Wilson, who led a leveraged buyout of Northwest in 1989, plans to step down when it emerges from bankruptcy next month.

After creditors had approved Northwest's reorganization plan, Northwest disclosed in a bankruptcy court filing late Monday that it would give Wilson $2 million in "consideration of the substantial contributions provided by Mr. Wilson to the Debtors during the chapter 11 cases."

Northwest said in the filing late Monday that it would also give Wilson lifetime medical and dental insurance coverage, travel, and reimbursement for up to $75,000 per year to run an office.

Unions representing pilots and flight attendants objected on Tuesday, calling on U.S. Bankruptcy Judge Allan Gropper to remove Wilson's payout when he considers Northwest's reorganization plan at a hearing set to begin Wednesday.

"Northwest's apparent determination to make what amounts to a gift to Mr. Wilson by sneaking in a plan supplement at the last minute is an outrage," the Air Line Pilots Association wrote in its objection. It said the disclosure 40 hours before Northwest's confirmation hearing begins leaves no time for the matter to be scrutinized more closely.

"This type of maneuver is contrary to law and good faith ... and destroys employees' and public's confidence in the bankruptcy and judicial systems."

The unions had already objected to Northwest's reorganization plan because it would hand nearly 5 percent of the company over to executives in the form of restricted stock and options, according to earlier disclosures.

Northwest Airlines (other-otc: NWACQ.PK - news - people ) Corp. spokesman Roman Blahoski said the airline had no comment on the Wilson payment or union objections.

The airline paid Wilson $8,380 last year as an employee, according to a regulatory filing, and another $48,258 in travel and medical expenses. Wilson was once a major Northwest shareholder but sold the bulk of his shares in the months leading up to Northwest's September 2005 Chapter 11 filing.

Copyright 2007 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed