UAL Rewards Top Brass

Mechanic Sacrifices Go Unrecognized

Time, energy and hard work are what mechanics put in at United Airlines. The “reward”: layoffs, outsourcing and the loss of pensions. Others have certainly fared better with UAL’s turnaround, namely, UAL senior managers and shareholders.

Executive Windfall

The top 400 executives and managers received 10 million shares of company stock, or approximately 8 percent of the total shares issued when UAL emerged from bankruptcy in February 2006. In addition, the top five executives alone took home pay packages in 2006 that have an estimated total value of more than $100 million, and UAL contributed over $4.2 million toward their pensions.

Shareholders More Than Satisfied

Now United Airlines’ parent, UAL Corp., has received the backing of its lenders to make a special payout to shareholders of $250 million or $2.15 per share.

The story reported in Corporate Financing Week states, “…this payment was seen by some staff as an indication that the airline is prioritizing the immediate interests of its shareholders over the long-term value of the company…. and some commentators suggested that with oil at $90, UAL might have opted for a more conservative use for its cash.”

UAL mechanics made sacrifices in wages and work-rule concessions to help United survive bankruptcy. This is the “thank you” we get?