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  • Labor's New Ammunition
    Posted by Andrew Compart 10:30 PM on Dec 01, 2009

    I have not hidden my feelings about the level of executive pay in the U.S., which I think is obscenely high in general and disproportionate at some U.S. carriers. But regardless of your feelings on the issue, two new reports are sure to be used as anti-management fodder by airline unions -- and perhaps by the U.S. Congress.

    In this one, analyst Robert Herbst compares 2008 compensation to company performance -- and the average pay for each airline's employees -- for the top five executives at Delta, American, United, Continental and US Airways. He also includes Southwest, as a point of comparison with a carrier that actually made money in 2008. As you might guess, from a labor point of view the data is not exactly flattering for management.

    At nearly the same time, the federal governent's Government Accountability Office released a report (PDF file) on how much senior executives at 10 large U.S. companies were paid in the few years before their companies ditched traditional pension plans for employees. This report is notable for U.S. carriers because two of the companies -- in fact, the first two that are analyzed -- are United and US Airways (the report does not identify the carriers, but provides details that make it obvious which carriers they are).

    As Reuters reported, the chairman of the House Education and Labor Committee, Rep. George Miller, requested the GAO investigation and wasn't happy about the findings, which showed that executives at the 10 companies received approximately $350 million in pay and benefits in the years leading up to the termination of their companies' underfunded pension plans. The California Democrat issued a statement upon the report's release, in which he said he is considering legislation to freeze executive compensation if a company's rank-and-file pension plan becomes significantly underfunded.

    "Executive compensation and golden parachutes should be aligned to the fate of workers’ retirement plan," Miller said. "This will create an incentive for executives to fix workers’ pension plans before they go broke."



    Tags: tw99, unions, executivepay, United, USAirways

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