United Airlines (NYSE: UAL) today announced that it will reduce the number of company officers by 18 percent and provided details about the officers` participation in the airlineå‘s financial recovery program. The terms of the officers` financial contribution are subject to review and approval by the compensation committee of the board of directors.
“Our objective is to optimize the performance of the organization while reducing the airline’s cost structure,” said Glenn Tilton, United’s chairman, president and chief executive officer.
“We also have determined the financial contribution that our officers will make to the company`s labor-cost savings,” Tilton added. “The 36 officers will contribute an average of 11 percent of their annual compensation over the five-and-one-half year recovery period. The total officer contribution, including the reduction in the number of officers, is more than $60 million.”
In addition to their wage reductions, and consistent with other salaried and management employees, the officers have forgone their planned 2002 merit salary increase and a 2002 incentive payment.
As with other employee groups participating in the company`s financial recovery, the officers will receive stock option grants and participate in a profit sharing program from 2004 through 2008. The officers` wage reduction arrangement will become effective upon the closing of a loan facility for the company, guaranteed in part by the Air Transportation Stabilization Board (ATSB), and satisfactory participation by all employee groups in the recovery plan.
News releases and other information about United Airlines can be found at the company’s website, www.united.com.