All the warm sunshine here in Tampa has me in a good mood. So, I thought I’d put my “cranky” hat away and talk about something, er, sunnier. So, let’s talk about Delta Air Lines, and more specifically, CEO Jerry Grinstein, the latest recipient of a gold star.
If you haven’t been paying attention lately, you’ve missed Jerry’s plan for taking care of his employees upon exit from bankruptcy. Now to be fair, if you’re going to follow United’s lead, it’s hard NOT to look good. But Mr Grinstein deserves more praise than that.
Last week’s press release outlines the plan. About 3.5% of common stock in the newly unbankrupt (is that word?) company will go to non-union employees as will $130 million in cash payments (8% of each person’s 2006 pay). Going forward, the profit sharing plan will see at least 15% of total profit paid out to employees with no minimum threshold. Also this summer, the first pay raises in a long time, up to 4%, will be handed out. The union employees (only pilots and flight dispatchers are union at Delta) have negotiated similar plans.
As for management, this is where the airline really stands out. About 1,200 managers will share 2.4% of the common stock upon exit. (As this other article notes, United handed out 11% to only 800 managers.) Officers and directors won’t be eligible for pay increases until the front line has reached the industry standard. Most importantly, the incentive plan won’t pay out unless the airline is profitable and it uses the same metrics as the plan for the front line employees. So everyone gets paid for the same types of success.
And unlike United’s Glenn Tilton, who has pocketed somewhere in the neighborhood of $40m, Mr. Grinstein will not take anything.
Whaaaaaaaat?!?
Yup. At Mr Grinstein’s request, the money “will establish two new charitable foundations that will fund scholarships and hardship assistance programs for Delta employees, retirees and their families.”
Fantastic.
How does this impact the customer? Well, Delta employees have to be riding high right now. They bonded over fighting the US Airways takeover attempt and now they’re getting close to exiting bankruptcy. Their CEO will funnel his bonus back into the employees as he rides off into the sunset. I may not agree with much that this airline has done in the past, but this is definitely a great thing. Hopefully it will result in less surliness and better customer service for the regular traveler.
