DL guy.....from DALPA Contract Admin:

"Profit Sharing Payout Calculations

The Profit Sharing Plan is based upon the Company’s “Pre-tax income” (PTIX) for the calendar year. For the Profit Sharing Plan, PWA Section 2 A. 216. further defines PTIX as:

For any calendar year, the Company’s consolidated pre-tax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but excluding:

a. all asset write downs related to long-term assets,
b. gains or losses with respect to employee equity securities,
c. gains or losses with respect to extraordinary, one-time or non-recurringevents, and d. expense accrued with respect to the profit sharing plan.

The Profit Sharing Plan uses pre-tax income as a trigger for determining payouts. It restricts the write-offs that might otherwise reduce the PTIX metric resulting in a “clean,” not easily manipulated, dollar value from which to determine profit sharing payouts. Also, because the cost of the Profit Sharing Plan itself and other incentive plans are added back when calculating PTIX, the formula provides a higher level of PTIX than most profit sharing formulas at other carriers.

To ensure transparency within the Company accounting process regarding profit sharing, the PWA puts in place a “trust but verify” process. A review of Delta’s business plan, performance, earnings and expenditures is made available to ALPA at regular intervals.

ALPA reviews the methodology and calculation of employee awards with the Company prior to such awards.

Total Employee Payout Calculation

Profit sharing begins at the first dollar of PTIX. The total amount of profit sharing paid out to all pilots is based upon the total PTIX for the year. The total pilot profit sharing is paid at 10 percent of the first $2.5 billion of PTIX for the year and 20 percent of any PTIX for the year over $2.5 billion.

Individual Pilot Payout Calculation and Award

To determine your individual profit sharing payout, you need to know your annual compensation in the year in which the PTIX was earned, the total annual compensation for that year for all eligible employees, and the total profit sharing amount. You then divide your eligible annual compensation by the eligible annual compensation of all profit sharing participants and then multiply that amount by the total profit sharing amount available. The resultis your individual profit sharing amount. Every pilot will receive a pro rata amount of the total profit sharing based on his or her annual compensation in theyear PTIX was earned.

Here’s an example:
Assume Delta earned a PTIX of $1.5 billion. Delta would provide eligible employees a total profit sharing of $150 million ($1.5 B x 10% = $150 million). Also, assume that the total annual compensation for all eligible employees was $3.75 billion and that the pilot’s individual annual compensation was $100,000. To determine the percentage of profit sharing for this pilot, divide the pilot’s individual annual compensation by the total annual compensation ($100,000 / $3.75B = .00002666667). To determine the pilot’s personal profit sharing payout. Multiply this number by the total profit sharing amount (.00002666667 x $150 million = $4,000)."

No where in there does it say Delta figures out what the pilot 16% DC is going to cost and bakes that into our cut of the PS pool.

Maybe. All the employees at Delta get the same profit sharing percentage. The pilots also get 16 percent DC while the other employees are getting 0 DC I believe.

I’d be very surprised if profit sharing makes new contract

It will make it. The only question is if we are smart enough to demand the Delta formula and including it in the compensation for BC plan calculation.

Where Delta's contractual language is similar and superior to ours we need to take advantage of that and either match or exceed the values in their TA. We will have plenty of more complicated issues like scheduling, sick leave and LTD/STD to reinvent the wheel with apple to oranges comparisons.

Yeah, let's definitely give up stuff in this environment.

Anyone see the summary sheet from the reps yet? Very interesting stuff on what the ask is. I'm surprised and actually impressed.

I’m surprised you could see it! They like to keep the proletariat in ignorance.

Where can you see that?

This is not directed to only Sunvox or SalingFun.. but they seem pretty knowledgeable of our/their respective PS.

So, a couple of simple questions-

IF both companies reported 5Billion in Profit for FY23 (NOTHING to do with Delta's current TA, or our potential TA).
1) What would the PS be for their respective pilot groups? Ie.. how much in the pilot pot?
b) based on that amount, and the number of eligible pilots.. what would be the "expected" PS Percentage.

2) IF two pilots both made 200k in FY22. Based on what I (and others are reading-)
The UAL pilot would be getting 200ooo x .016787= $3357.40 as Profit sharing
The Delta pilot would be getting 200ooo x .05023= $10046.
However, (and correct me if I am wrong)- $10046 x 16% BFund = another $1607.36 for a total of $11653.36.

THAT is a significant difference.
If it all comes down to a few words, ie- Pretax PROFIT up to/over $2.5B vs. Pretax PROFIT up to/over 6.9% margin
A set amount vs a set percentage.

Back to another question-
Two pilots will be getting 1.6787% PS for their FY22 amount.
UAL pilot to get $3357.40
Delta pilot to get $3357.40 + $537.18 BFund = $3894.58

If the above is correct, we (UAL Pilot Group) can not say [With a Straight Face] that our two plans are essentially the same.

And there is nothing wrong with plans being different.. but lets just acknowledge it.
We can argue the value of PS and IF it should or shouldn't be in a UPA/PWA. It seems some pilot groups are going away from it while others are making it more solid.
Personally I like the idea of being rewarded in making our company profitable. Just always felt that a BFund contribution should also be included.
BTW- on our PS page it mentioned that the amount to be distributed to eligible employees is nearly $133million. I was alittle surprised by that low amount. Expected almost double that.

Motch

It's less about the 6.9 vs 2.5B. Delta is just more profitable and has consistently been over the last decade. If we wanted to be on parity you would have to address the 10/20% and make those numbers higher.

Did you read the post you’re responding to? He ran the numbers with the SAME PROFIT

Quarter 4 2022 being first exception.

Annual is all that matters for profit sharing. Delta has beat us pretty handily in every year for the last 10 years.

Motch please forgive me if I'm not reading your post correctly, but let me try to clarify a couple issues I think you are missing.

Number one: Assuming both companies had $5 billion in profit.

On the Delta side the calculation is straight forward with no further assumptions:

The first $2.5 billion gets added to the PS pool at a 10% rate so $2.5 * .1 = $250 million
Then the amount over $2.5 billion (which in this case is $2.5 billion) gets added at a 20% rate so $2.5 bil * .2 = $500 million

so Delta would get $500 mil + $250 mil = $750 mil in their PS pool.

Now for United we have to make a second assumption and that assumption is what revenue to use. How about this years revenue? That is $45 billion.

So first question is what's 6.9% of $45 bil? Answer $3.1 billion.

So now we can calculate the pool.

Step one is 10% of the amount calculated above goes into the pool:
$3.1 bil * .1 = $310 million
Step two is the remaining profit gets multiplied by 20% and that amount is added to the pool.
$5 bil - $3.1 bil = $1.9 bil then $1.9 bil * .2 = $380 million

so UAL pilots would get a pool equal to $310 million + $380 million = $690 million

Delta's pool $750 million; United's pool $690 million

Keep in mind that UAL has fewer pilots so some of that difference would be mitigated in the final payout calculation.

Now the other misconception is that Delta then adds 16% more. That 16% of $750 million would be another $120 mil. That's not how the 401k 16% gets calculated. It's backed out of the total $750 million pool.

Not sure if that helps or not because I may have completely misread your post and you may already realize this.

Bottom line: We could improve our PS clause for sure, but the difference is not quite as egregious as some think.

EDIT: I'm just having a new question come up in my mind that I do not know the answer to. Once the Profit Sharing pool is calculated do UAL pilots share the SAME pool with FAs? And, conversely does DAL share their pool as well? That could be a HUGE difference if UAL pilots share the PS pool with FAs and Delta does not. Honestly I do not know the answer to that question. Time to do more homework :D

It doesn't help because you keep repeating "the 16% DC is backed out" at Delta. You have been told repeatedly that this is not the case. The 16% is additive . The Delta PS language is quoted in post 161.

No he didn't. He calculated it based off of the same salary with current profit sharing percentages. Delta's profit was nearly double United's for 2022.

Time to stop posting blatant misinformation.

The difference between the two PS formulas is substantial and will get worse as inflation and growth lead to higher revenues. The crossover between 10% and 20% is key.

United likely has more pilots than Delta now.

Delta's PS is simply part of the compensation on which their BC contributions are based.

Jerry-have you ever seen the actual profit sharing plan for UAL or Delta? Not the UPA/PWA language, but the company plan that is much more detailed. If so, do you have a link to it?

Can you show the math to back up your claim, or show where others are making mistakes? Not being snarky, but others are using math in their arguments. Please do the same to show where they are wrong using identical profits between United and Delta. Without data, an argument is just adherence to a narrative rather than fact.

There is no need to get granular if you understand the difference between the $2.5B v 6.9% crossover from 10% to 20%. It is simple math. As revenues exceed $36B the Delta formula is superior and as revenues/profits grow as Kirby predicts the difference gets larger. Add to that that Delta's PS is part of their compensation on which their 16% BC contribution is based. Don't get lost in the weeds.

Because I don't want UAL pilots to sell themselves short.........following is a quote from the Delta MEC Contract Awareness Bulletin 14-01 21 Jan 2014........... kinda long , but salient point is in red at bottom. SUNVOX is doing you a disservice every time he repeats anything about the DC contribution being "backed out". THE DC CONTRIBUTION IS ADDITIVE!!

"Profit Sharing Payout Calculations The Profit Sharing Plan is based upon the Company’s “Pre-tax income” (PTIX) for the calendar year. Section 2 A. 207. of the PWA defines PTIX to mean:

For any calendar year, the Company’s consolidated pretax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but excluding: a) all asset write downs related to long term assets b) gains or losses with respect to employee equity securities c) gains or losses with respect to extraordinary, one-time or non-recurring events (including without limitation one-time transition or integration costs incurred in connection with the merger of the Company and Northwest Airlines Corporation during the two year period following the merger), and d) expense accrued with respect to the profit sharing plan

In layman’s terms, the Profit Sharing Plan uses pre-tax income as a trigger for determining payouts. It restricts the write offs that might otherwise reduce the PTIX metric resulting in a “clean,” not easily manipulated, dollar value from which to determine profit sharing payouts. Also, because the cost of the Profit Sharing Plan itself and other incentive plans are added back when calculating PTIX, the formula provides a higher level of PTIX than most profit sharing formulas.

To ensure transparency within the Company accounting process regarding profit sharing, the PWA puts in place a “trust but verify” process. A review of Delta’s business plan, performance, earnings and expenditures is made available to ALPA at regular intervals. ALPA additionally reviews with the Company the methodology and calculation of employee awards prior to such awards.

Total Employee Payout Calculation Profit Sharing begins at the first dollar of PTIX. The total amount of profit sharing paid out to all employees is based upon the percentage of total PTIX for the year.The total employee Profit Sharing pool is funded by 10 percent of the first $2.5 billion of PTIX for the year, and 20 percent of any PTIX for the year over $2.5 billion.

Individual Pilot Payout Calculation and Award To determine an individual pilot’s profit sharing payout, we need to know his annual compensation in the year in which the PTIX was earned, the total annual compensation for that year for all eligible employees, and the total profit sharing amount. We then divide the pilot’s eligible annual compensation by the eligible annual compensation of all profit sharing participants, and then multiply that by the total profit sharing amount available. The result is the pilot’s individual profit sharing amount. Put in simpler terms, every pilot will receive a pro rata amount of the total profit sharing pool based on his annual compensation in the year PTIX was earned.

For example, assume Delta earned a PTIX of $1.5 billion. Delta would provide eligible employees a total profit sharing of $150 million ($1.5 B x 10% = $150 million). Also assume that the total annual compensation for all eligible employees was $3.75B, and that the pilot’s individual annual compensation was $100,000. To determine the percentage of profit sharing for that pilot, divide his individual annual compensation by the total annual compensation ($100,000 / $3.75B = .00002666667). To determine his personal profit sharing payout, multiply this number by the total profit sharing amount (.00002666667 x $150 million = $4000).

Note: When you see the final announcement of the profit sharing amount, it will be in the form of a percentage of your annual compensation. In this example, the pilot would receive 4 percent of his total annual compensation in the form of profit sharing. As a reminder, the profit sharing is 20% of the amount exceeding $2.5 billion PTIX.

Profit Sharing Plan payouts are treated as ordinary compensation; all Federal, State and local taxes, FICA taxes, ALPA dues and DPMA dues will be withheld. You will also be able to make a special election through Fidelity’s NetBenefits® website to contribute some or all of your Profit Sharing payment to your Delta 401(k) Plan.

You may defer as much as 100 percent of your Profit Sharing payment into the Delta 401(k) Plan. Elections must be made by tomorrow, January 22, 2014 at 4 pm EST, to take effect for the February 14, 2014 Profit Sharing payment. You will be able to make an election to contribute from 0 percent to 100 percent in increments of 1 percent of the Profit Sharing payment through Pre-tax, After-tax, Roth 401(k), Catch-up Contributions and/or Roth Catch- Up Contributions (Catch up Contributions only apply if you are age 50 or older in 2014). After this deadline, the special election window will close. To elect a 401(k) contribution amount specific to your Profit Sharing payment, simply go to NetBenefits at www.netbenefits.com, click on the Delta Pilots Savings Plan, Contribution Amount, then scroll to the section near the end for Profit Sharing elections. You will then enter the percentage of your Profit Sharing payment you’d like to contribute to your retirement accounts. You may also contact the Delta Service Center at Fidelity 1-800-554- 0262 to make your elections or to get answers to any questions you may have. NOTE: For pilots wishing to defer some or all of the February profit sharing payment into the Delta Pilots Savings Plan be aware that the screens on the Fidelity website may be slightly confusing. The profit sharing line of the contributions screen is pre- populated with a “0%.” If you wish for it to remain at “0%” for the profit sharing payment, you must select the "Change Contribution Amount" button and receive a confirmation number or the system will later default to your election currently on file for regular paychecks. If you wish to have a deferral other than your current election, you need to enter that percentage and again save the election for it to become active.

Defined Contribution Profit Sharing Payment. Since Profit Sharing Plan payouts are pensionable, a pilot will ALSO receive a 15% employer contribution to the Delta Pilots Savings Plan based on his profit sharing payout."...


PSA for your negotiations

BTW....(was 15% back in 2014, now 16% match, eventually going to 18% with approval of TA)

Im convinced my 12 year old neice could negotiate a better contract than our union .

Someone can correct me if I'm wrong, but the best we could reasonably do on a contractual basis is to include a DC on top and rope in those under a year (which would dilute non-new hires) if that's even possible under the company's profit sharing plan. Those both seem like pretty good gains to me. The remainder of the aspects are not negotiable under our contract alone as they are defined in the company plan that affects all work groups. The specifics of the company plan aren't that easy to find, though, other than the 6.9% threshold which affects everyone. I just don't see a company-wide change holding up our contract.

Wow.

Okay, but you really didn't need to post all the gibberish in the middle. All you needed to say was "this information from our Union from 2014 indicates Sunvox is not correct". All I can say is that I am merely repeating what was told to me by an UAL-ALPA rep. If that information is wrong then I apologize for spreading false information, but it doesn't change the discussion immeasurably. We all agree, including myself, that UAL pilots would like to do better with regards to Profit Sharing, but there is significant misunderstanding still about the basics of how the pool is calculated.

Please tell this rep that he/she misunderstands the essential elements of the Delta PS and to please figure it out ASAP if they are still doing ALPA work.

Is that person a rep or on the NC as you previously stated?

Delta DC is additive.

But disregarding that, common sense tells you that a fixed dollar amount being the trigger for profit sharing works out much better over time due to inflation than a percentage. Over time 2.5 billion is going to become less and less a percentage of total revenue. 6.9% (or whatever the trigger is) is always going to be 6.9%.

Well....since I have posted here to you 3 separate times that you are incorrect.....AND you went to an ivy league school AND you have an accounting degree(this is you?...maybe I'm wrong here)....I felt you needed some proof. Others have asked for language also.
Since I'm a cliff notes kinda guy....I stated up front in red and put the salient point in red at end.

I am frustrated with you because you seem pretty cavalier in your misinformation. Once something is stated as incontrovertible that DC is backed out(like you did several times).....it takes a lot of corrections to get people to see the light.

I know it tough when somebody tells you that your baby is almost as cute as another's....but it's painful to be told your baby is downright homely.

You guys have a homely baby and getting the DC on profit sharing should be an easy get......so long as people see the light and refuse to be swayed by ignorant information.

BTW...the DC is measurable, not a "pip" as you still try to lead some to believe. For me, the best year of PS, the DC alone was 15K. We are talking SUBSTANTIAL sums of money across the seniority spectrum.

Perfectly said, "pretty cavalier in your misinformation." There seems to have no feedback loop. He is worried we are trying to get too much in our contract negotiations if you can believe it in the wake of the Tumi TA.

Most of the examples in this thread don’t even understand how our profit sharing works to include Sunvox’s example of 690 million vs 750 million. The 6.9% is a threshold relating to pre-tax profit MARGIN. I say again MARGIN. It is not multiplied by any number to drive our profit sharing pool. The impact of inflation on that number is basically meaningless as it could work to our favor in some years and against it in others. The only benefit of a solid number is making it easier for a layman to understand.

6.9% margin = $2.5B at $36B in revenue. Above $36B in revenue the Delta formula is better. UAL's 2022 revenue was $43B and as inflation and growth increase that number Delta's formula further outpaces United's formula. Simple math.

So if I understand this correctly, assuming we think United will have at $36B in revenue we would be better to have Delta’s formula and of course add the additional DC on top of the profit sharing that Delta has too. This thread seems to have clarified how we can improve PS.

actually what this thread shows is that there are a lot of people who think they know a lot about PS but don’t haha. They can’t all be right

Yes. Delta's formula is better at revenue levels above $36B and that is not including their PS being part of the compensation that determines the BC contributions.

Our formula isn't going to change because it's not ours. Its the formula for 85k (or however many) employees and workgroups. Unless someone can point to the terms of the company plan and how individual work groups can deviate from it, this is all just academic. The pie isn't getting any bigger, but our slice will increase with bigger increases in pay, as a 18% increase in our pay amounts to a much larger absolute increase than a comparable % increase in another workgroup's pay. The best we can realistically negotiate for is a DC on top which I'll gladly take. Would everybody like more, sure, but is the company going to change the profit sharing plan for the entire company when negotiating our contract? Unlikely.

Exactly !! So all I need to know is when are we going to get it ??
I told my hoes down in Costa Rica I would be back with a pocket full of cash . I can’t disappoint them . 😂🙄🙄🙄🤪😆😆

I’m not arguing with you, but why did the FAs get 3+% if the formula for the entire employee population is the same?

From FT...

"Your work group percentage reflects the proportional share of the company’s profits divided by the total company-wide eligible earnings for the plan year. The proportional share is based on your work group's wages as compared to the wages of all work groups. So, for example, if your work group percentage is 5%, your work group would receive its proportional share of 5% of the company’s profits, based on the ratio of your group’s wages to the wages of all work groups."

So each work group has it's own slice based on their earnings relative to earnings of all eligible employees. Pilots and Flight attendants have 10/20% shares above/below the 6.9% pre-tax profit margin threshold. Every other workgroup with a CBA has 5/10%. All have the same threshold of 6.9%.

Assuming this is the most current version, those are on the last page. https://contracts.justia.com/compani...ontract/87028/

Thanks for that explanation.

FT says payment is coming on the 8th, IIRC

They did at Delta, 3 different times!!!