Chicago, June 18, 2002—United Airlines (NYSE:UAL) today announced that, as part of its financial recovery plan, compensation for its officers, and its management and administrative employees, will be reduced, resulting in estimated cost savings of $430 million over the recovery plan period.
“While painful, these steps are an important component of United’s financial recovery plan,” said United Chief Executive Officer Jack Creighton. “United’s employees must sacrifice now in order to ensure a solid future for our company.”
In addition to the compensation reductions, CEO Jack Creighton will continue to forgo any salary.
As part of the recovery plan, affected employees will receive grants of options in UAL Corporation stock.
“We want to reward them for their loyalty and commitment by allowing them to share in the upside they help create,” said Creighton.
The company has previously indicated that if a substantial number of United employees participate in a program of shared sacrifice, it will apply for federal loan guarantees administered by the Air Transportation Stabilization Board. On Friday, United and the Air Line Pilots Association (ALPA) announced that negotiating teams for the union and the company have finalized a proposal for participation by United’s pilots in the financial recovery program. This proposal is subject to documentation, review and consideration by ALPA’s Master Executive Council, and ratification by ALPA members. The UAL Board of Directors and its Labor Committee must also approve the recovery plan.
“I’m delighted that our pilots are seeking ways to assist in the financial recovery of United Airlines,” said Creighton. “I remain hopeful that the leadership of the International Association of Machinists and the Association of Flight Attendants will join the company’s pilots in this effort.”