UAL Announces Changes to Compensation

UAL Corporation, the holding company whose primary subsidiary is United
Airlines, announced changes to salaried and management (SAM) employees’
compensation and benefits that will achieve annual average savings of $112
million through permanent salary reductions, benefit changes, and
productivity enhancements. The permanent SAM salary reductions will increase with an employee’s
responsibilities.

—Salaried employees will take a 4% reduction.—Management employees
will take a 6% reduction.—Officers will take an 8% reduction.—
Members of the Executive Council (Glenn Tilton and his seven direct
reports) have already said they will take an 11% reduction.

In addition to the permanent salary reductions, and consistent with
United’s proposals to its unions, there will be a 4% temporary reduction
in salaries. As a result, total reductions in salaries for the SAM group
will range from 8% to 15%. These salary reductions take effect January 1;
the temporary reductions will be restored upon United’s exit from
bankruptcy.

“This is very difficult for all our employees,” said Sara Fields, senior
vice president-People. “But it is absolutely essential if we are to build
a strong and healthy company providing good, secure jobs, competitive
compensation and benefits, and the opportunity to participate in the
company’s success in the future.”

The company also will adopt a revised benefit plan for salaried and
management employees and is assessing the impact of changes to medical and
dental programs, vacation and holiday schedules, and sick leave. These
plans have not been finalized. The final component of the salaried and
management savings is expected to be achieved through productivity
enhancements. The company has already identified $30 million in annual
productivity savings.

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These changes affect U.S.-based salaried and management employees and
expatriates only.
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