Friday, March 28, 2003

Airline execs under fire. Finally. An uncredited report in the Dallas Morning News says two US senators are considering introducing a bill to regulate pay increases for airline executives as a condition of providing $3 billion in government aid. "It's insulting when they lay off thousands of people and then pay top executives millions of dollars in bonuses," said Sen. John McCain, R-Ariz., chairman of the Senate Commerce, Science and Transportation Committee. It's a shame someone didn't attach similar conditions to the last airline bailout after 9/11. But don't forget, AMR CEO Donald Carty claimed he has already taken an 88% pay cut. According to today's article, his cronies at other airlines haven't been so magnanimous. Delta Airlines chief executive Leo Mullin got a $12.9 million pay package in 2002, according to a Securities and Exchange Commission filing. Northwest Airlines Corp. chief executive Richard Anderson received $2.8 million, 75 percent more than his 2001 pay package, and Continental Airlines chief executive Gordon Bethune received $11.9 million, more than twice what he received in 2001, according to the filings. And just so you'll know, Delta's compensation committee "determined Mullin's 2002 pay package after considering his performance and executive compensation at other big U.S. airlines, among other factors...", according to MSN Money. Obviously, the company's performance sucked, so that leaves "executive compensation at other airlines" as the only arbiter of pay. And therein lies the rub. This isn't about company performance, it's about how much their buddies at other companies make. Talk about the Billionaire Boys Club. Here's how it works: Mullin reduced his salary by 10 percent effective March 1 "to demonstrate his commitment to share the burden of Delta's cost reduction goals," the filing said. Number games. The same report indicates that in 2002, Mullin received $13 million, more than twice what he received in 2001. So that's over a 100% increase. Now let's deduct the sacrificial 10% pay cut. That leaves a 90% increase, right? Keep these figures in mind through the next few months as the airlines belly up to the public trough. Apparently, McCain will. According to Forbes magazine, ... McCain said that if he saw Mullin, head of the No. 3 U.S. air carrier, among other airline representatives visiting lawmakers' offices this week to plead industry poverty, he would tell him: "You ought to be ashamed of yourself." 9:21:01 AM    Oh yeah? [] EDS acknowledges they treat their employees poorly In a massive understatement, new EDS CEO Michael H. Jordan admitted "people care suffered" in recent years. He promised to review HR policies and "situations", with needed changes expected to "happen quickly". Many employees have said for years that morale suffered under [former CEO Dick] Brown, who instituted a strict human resources policy that required managers to rank workers' performance. For a sampling of management absurdities and employee reactions to the former management, be sure to visit Internal Memos.com. The problem is, EDS has long been known in the Dallas area as a horrible place to work, even back in the H. Ross Perot days, with its Draconian dress policy, management-by-intimidation cult, and general contempt of its employees. After Perot left, the company seemingly took all the worst eccentricities and none of the business acumen of the company's quirky founder. Perhaps new CEO Jordan will show good faith by tying his compensation to the company's performance. Nah. 8:51:58 AM    Oh yeah? []