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NWA executive compensation
Not everyone is happy about NW getting out of bankruptcy, but it looks like their executives should be.
"That didn't stop Northwest from throwing open the vault. Under the reorganization plan, the top 400 managers will receive an equity stake in the company worth $297 million; CEO Doug "I Deserve It" Steenland will receive $26.6 million in stock and options; and, departing Chairman Gary Wilson will receive $2 million, dental and medical insurance for life, and $75,000 per year for an office." http://consumerist.com/consumer/airl...ash-261955.php |
The stock and options may not be worth $297 million:
Northwest Shares Could Debut Overpriced Sunday May 20, 3:34 pm ET By Joshua Freed, AP Business Writer Northwest Airlines Shares Could Debut Into Headwind As It Emerges From Bankruptcy MINNEAPOLIS (AP) -- Northwest Airlines Corp. is hoping for the highest valuation in its history when it emerges from bankruptcy protection May 31. But there are signs that it may be a little rich for some investors. Creditors were offered new Northwest shares at $27 each, but more than 90 percent of them went unsold. Underwriter JP Morgan Securities Inc., which has to buy anything unsold from the $750 million offering, believes they're more likely to trade closer to $24 a share, according to a bankruptcy examiner's report issued last week. Northwest shares are set to begin trading on the New York Stock Exchange on a when-issued basis Monday and begin regular trading May 31. In addition, several investors lost interest late last year when climbing prices for Northwest's debt suggested a market value of $7 billion, according to the examiner's report. Northwest no longer plans to seek $150 million in private investment it had once considered. Still, management looks at Ch 11 exit as a great time to loot the treasury. Happened at US, UA and DL, so why not at NW? |
Pretty shameful considering the state of NW labor relations. I believe the DL CEO exercised some leadership when they did their Ch11 exit and passed up a lot of compensation he could have taken. Made a big impression on the rank and file. I doubt you'll see this crowd run the same play.
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Originally Posted by FWAAA
(Post 7772614)
Still, management looks at Ch 11 exit as a great time to loot the treasury. Happened at US, UA and DL, so why not at NW?
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Originally Posted by sxf24
(Post 7772902)
There was no looting at DL. It's CEO decline any options or post BK compensation and actually purchased stock on the open market. The COO and CFO's options were valued at a combined $3.8 million.
Grinstein's refusal to fill his pockets doesn't mean the DL execs didn't fill theirs. DL's execs took 2.5% of the new stock, assumed a month ago to be worth about $240 million (although actually worth about 20% less than that): Delta is also giving 1,200 managers a combined 2.5 percent stake, valued at $240 million, in the reorganized company. |
Originally Posted by FWAAA
(Post 7772954)
A common misperception by DL employees and observers.
Grinstein's refusal to fill his pockets doesn't mean the DL execs didn't fill theirs. DL's execs took 2.5% of the new stock, assumed a month ago to be worth about $240 million (although actually worth about 20% less than that): http://www.iht.com/articles/2007/04/26/news/delta.php From the story you linked to in your post: Next week, 39,000 Delta employees are expected to receive cash and new stock in Delta worth a total of $480 million. The total equity stake the employees will get equals 3.5 percent of the company. Delta is also giving 1,200 managers a combined 2.5 percent stake, valued at $240 million, in the reorganized company. |
Do they quick math and you will still see that the managers are still getting much more in bonuses than the rank-and-file.
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Originally Posted by clarence5ybr
(Post 7773005)
You have conveniently left out the part that rank-and-file employees also got a share of the loot. While the non-execs obviously got a lower per capita cut of the pie, pretending they got nothing while the execs grew rich isn't correct.
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Originally Posted by FWAAA
(Post 7772954)
A common misperception by DL employees and observers.
Grinstein's refusal to fill his pockets doesn't mean the DL execs didn't fill theirs. DL's execs took 2.5% of the new stock, assumed a month ago to be worth about $240 million (although actually worth about 20% less than that): http://www.iht.com/articles/2007/04/26/news/delta.php DL's top 3 execs get options worth $3.5 million and 1,200 managers shared less than $240 million in options. NW's CEO gets $26.6 million, its' non-executive chairman gets a fist-full of cash and 400 managers share in an estimated $297 million worth of options. |
Originally Posted by jwillett13
(Post 7773041)
Do they quick math and you will still see that the managers are still getting much more in bonuses than the rank-and-file.
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Originally Posted by FWAAA
(Post 7773082)
From my reading of the OP and the link provided, the topic of the thread didn't appear to be how much the rank and file are getting, so I didn't list those amounts. I'm not pretending anything. Simply posting about the executive looting. :)
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Originally Posted by clarence5ybr
(Post 7773129)
If it's looting when the executives take money, then isn't it looting when the rank and file take money? :)
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ummm... for comparison as well... what did Tilton and the UA execs get? I'd be interested to see a comparison with UA, DL & NW. Also, who recommended the 26 million for Steenland? was it the BOD? The execs themselves?
Originally Posted by clarence5ybr
(Post 7773129)
If it's looting when the executives take money, then isn't it looting when the rank and file take money? :)
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Originally Posted by thezipper
(Post 7773156)
ummm... for comparison as well... what did Tilton and the UA execs get? I'd be interested to see a comparison with UA, DL & NW. Also, who recommended the 26 million for Steenland? was it the BOD? The execs themselves?
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Originally Posted by sxf24
(Post 7773111)
DL's top 3 execs get options worth $3.5 million and 1,200 managers shared less than $240 million in options.
NW's CEO gets $26.6 million, its' non-executive chairman gets a fist-full of cash and 400 managers share in an estimated $297 million worth of options. Grinstein is the exception, not the rule. The rule is that when executives get a company through troubled times, they get rewarded handsomely. Would people have preferred that NW just go belly up and put all those employees on the street? I'm sorry, but I'd certainly hope the guy in change of tens of thousands of employees and billions of dollars of budget gets a lot more money than the Flight Attendant asking me if I'd like a refill of my Coke. Steve |
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