NWA executive compensation

 
Old May 21, 07, 12:39 pm
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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
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Old May 21, 07, 12:44 pm
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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.
http://biz.yahoo.com/ap/070520/airline_shares.html?.v=3

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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Old May 21, 07, 1:14 pm
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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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Old May 21, 07, 1:28 pm
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Originally Posted by FWAAA View Post
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?
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.
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Old May 21, 07, 1:38 pm
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Originally Posted by sxf24 View Post
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.
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):

Delta is also giving 1,200 managers a combined 2.5 percent stake, valued at $240 million, in the reorganized company.
http://www.iht.com/articles/2007/04/26/news/delta.php
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Old May 21, 07, 1:48 pm
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Originally Posted by FWAAA View Post
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
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.

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.

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Old May 21, 07, 1:52 pm
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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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Old May 21, 07, 2:01 pm
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Originally Posted by clarence5ybr View Post
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.
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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Old May 21, 07, 2:07 pm
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Originally Posted by FWAAA View Post
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
I think there is a huge contrast between DL and NW, which is illustrative of their respective management philosophies and current labor relations.

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.
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Old May 21, 07, 2:07 pm
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Originally Posted by jwillett13 View Post
Do they quick math and you will still see that the managers are still getting much more in bonuses than the rank-and-file.
That was acknowledged in my post (the part where I said "the non-execs obviously got a lower per capita cut of the pie"). However, to have people claiming the DL execs were stuffing their pockets and completely ignoring the fact that the DL rank and file got something isn't right.
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Old May 21, 07, 2:09 pm
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Originally Posted by FWAAA View Post
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.
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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Old May 21, 07, 2:13 pm
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Originally Posted by clarence5ybr View Post
If it's looting when the executives take money, then isn't it looting when the rank and file take money?
You're amazingly adept at putting words in others' mouths.
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Old May 21, 07, 2:14 pm
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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 View Post
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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Old May 21, 07, 2:20 pm
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Originally Posted by thezipper View Post
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?
Tilton got about $40 million of the estimated $480 million in new stock that UA execs split (execs split about 8% of the new stock).
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Old May 21, 07, 2:27 pm
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Originally Posted by sxf24 View Post
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.
While it's nice that Grinstein opted not to take any money, that doesn't mean it's not worth it. Would you want your salary driven by someone else who really likes to do your work and says "I'd do it for half of what others might."

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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