And they want you to take a pay cut ! Northwest CEO to get restricted stock worth $1.9 million Liz Fedor,  Star Tribune Published July 8, 2003 Northwest Airlines CEO Richard Anderson received a restricted stock award valued at about $1.9 million, according to a recent filing with the Securities and Exchange Commission (SEC). "We are just continuing to follow Northwest's practice of awarding restricted stock as part of our key executive long-term compensation plan," Northwest spokesman Bill Mellon said Monday. The board of directors approved 2003 compensation packages that will include restricted stock awards for the top five executives. The Eagan-based airline filed five reports on the awards with the SEC on Thursday, but information about Anderson and Chief Financial Officer Bernard Han was not released until Monday. Han, who succeeded Mickey Foret as CFO last year, was granted 75,000 shares, which are worth about $817,000 based on Thursday's stock closing price of $10.89 a share. Anderson was awarded 175,000 shares. The SEC reported Thursday that President Doug Steenland was granted 130,000 shares, which have a value of about $1.4 million. Executive vice presidents Tim Griffin and Phil Haan each received 125,000 shares. "The restricted stock is predicated on these five executives remaining with Northwest," Mellon said. Terms of the restricted stock weren't included in Thursday's SEC filings. In 2002, Anderson received restricted stock awards worth about $1.9 million, and Steenland's were valued at about $1.4 million, according to a March proxy statement. Those amounts do not represent cash payments to Anderson and Steenland in 2002. Some of those shares aren't fully vested until May 2005, while others don't vest until February 2007. In 2003, the base salary for Anderson and Steenland is frozen at $500,000. An airline aid bill passed by Congress this year prohibited pay raises for top executives. However, Anderson and Steenland are expected to take pay cuts when the company reaches a wage restructuring agreement with "at least one major union," Mellon said. The company is attempting to cut labor costs by $950 million a year. Northwest Airlines has awarded its top five executives 630,000 shares of restricted stock currently worth nearly $7 million. As is customary with such incentive stock awards, the executives must stay with the company several years to collect all the shares. But that's all they have to do. Their receipt of the shares is not contingent on their job performance or the airline's fortunes. But the higher the airline's stock price, the more money they can pocket. Companies say such stock awards are granted to key executives to encourage them to stay put. "This has been a long-standing executive compensation strategy at Northwest, and it's a pretty common executive compensation strategy for a number of public companies," Northwest spokesman Bill Mellon said. But unionized airline employees who are being asked to take pay cuts to help the struggling airline criticized the stock awards. "This is not the first time that we have witnessed greed at Northwest,'' said Jose Arturo Ibarra, interim vice president of the flight attendants' union. "Current management decides to line their own pockets, instead of taking care of the traveling public and employee morale." Richard Anderson, chief executive, received 175,000 shares, down from the 215,000 he got last year. President Doug Steenland was awarded 130,000, down from 160,000 in 2002, according to filings with the Securities and Exchange Commission. With these awards, Steenland holds 386,647 shares of NWA common stock, with most of them received through restricted stock awards, Mellon said. Anderson will now have 481,647 shares of NWA common stock, most of them restricted. Chief financial officer Bernard Han was given 75,000 shares; executive vice president Timothy Griffin, 125,000; and executive vice president Phillip Haan, 125,000. Northwest did not disclose the vesting period for the latest stock awards. Last years' awards vested in full from May 2005 to February 2008. Mellon indicated that the executives get proportionate shares of the awards if they leave the airline early. Northwest, which has lost $1.6 billion and cut 17,000 employees since the start of 2001, is seeking nearly $1 billion in wage and other concessions from its union employees. Non-union workers also will see their pay cut under a plan the airline says is needed to bring costs in line with reduced revenue. The airline's stock price has doubled since mid-February, closing Monday at $11.10, up 21 cents for the day. Still, that's far below its trading price of more than $60 five years ago. Earlier this year, Northwest disclosed that Anderson and Steenland received $450,000 in performance bonuses between them in 2002 as the airline lost $798 million. Though the bonuses were modest compared to those some other airlines granted their top execs, union leaders at Northwest were livid. They argued that the airline executives should not get bonuses as Northwest tries to squeeze wage and other concessions out of employees. Bonuses have caused problems at other airlines seeking pay cuts from workers. At American Airlines, a $1.8 billion cost-cutting package unraveled this spring after employees learned of previously undisclosed bankruptcy-proof pensions and bonuses for executives. The airline canceled bonuses for its top six executives, which were reportedly worth twice their annual salaries. It sweetened the concessions package to make it more palatable for workers. CEO Donald Carty was forced to resign. Bankruptcy-proof pension accounts for some three dozen top executives at Delta Air Lines have caused controversy among that carrier's union members. Delta is also seeking pay cuts from workers. Chief executive Leo Mullin, who earlier was forced to return a multi-million dollar bonus amid criticism from inside and outside the company, was forced to apologize. Northwest's top 2 bonuses total $450,000 BY MARTIN J. MOYLAN Pioneer Press Dated March 27,2003 Northwest Airlines' top two executives received $450,000 in performance bonuses between them in 2002 as the airline lost $798 million. Though the bonuses are modest compared to those some other airlines granted their top execs, union leaders at Northwest are livid. They argue airline executives should not get bonuses as Northwest continues to cut thousands of jobs and works toward saving $1 billion or more a year by squeezing wage and other concessions out of employees. CEO Richard Anderson's $500,000 annual salary remained unchanged from 2001, according to the proxy statement filed Wednesday by the Eagan-based airline. But while he did not receive a performance bonus in 2001, he got a $250,000 bonus last year, along with stock awards worth $1.9 million when they were granted and $111,638 in other compensation. President Doug Steenland's salary also remained unchanged at $500,000. But he received a $200,000 performance bonus, stock awards worth $1.4 million when granted and other compensation of $92,103. The compensation of Anderson and Steenland paled in comparison with that provided top executives at some other airlines in 2002. Continental chairman and chief executive Gordon Bethune, for instance, last year received about $1.1 million in salary, $652,000 in bonuses. Leo Mullin, chairman and chief executive of Delta Air Lines, the nation's third-largest carrier, got a $12.9 million pay package in 2002. In 2001, NWA says Anderson and Steenland were the lowest compensated top two executives at the nation's six biggest traditional network carriers. Chairman Gary Wilson, who owns 20 percent of Northwest common shares, received a salary of $10,400, the airline reported. But that gets them no sympathy from union leaders. In the past two years, Northwest has lost $1.2 billion and cut 12,000 jobs. Last week, it announced another 4,900 job cuts. "No one will feel sorry for Richard because he 'only' made $500,000 and his bonus was 'only' a quarter million dollars," said Mollie Reiley, head of the flight attendants' union. "If people are taking pay cuts, everyone should share in the burden. And our people don't believe that is happening." John Massetti, secretary-treasurer of Air Transport District 143 of International Association of Machinists, agreed. "It's a tough pill to swallow when everyone is supposed to be making sacrifices," he said. Anderson, anticipating a firestorm of criticism about executive pay, had defended performance pay (bonuses) in the latest edition of the employee newspaper as needed to "attract and retain the best management team in the industry." Executives only get performance pay if they meet or exceed their targets, Anderson has said. Since some met or exceeded their targets in 2002, the airline was obliged to give them performance pay.