Delta Air Lines today announced that the Board of Directors approved
enhancements to its Corporate Governance Program. These changes include:
—Establishing independence standards for members of the Board.—
Adopting revised corporate governance principles relating to the Board`s
composition, function, structure and responsibilities.—Amending the
charters of the Board`s Audit, Personnel & Compensation and Corporate
Governance Committees.—Electing a presiding director to chair executive
sessions of the Board. Shareowners may communicate directly with the
presiding director at Presiding.Director@delta.com .
These latest enhancements to the Corporate Governance Program are intended
to assure that Delta`s policies reflect recent developments, including the
requirements of the Sarbanes-Oxley Act and the New York Stock Exchange`s
new corporate governance listing standards.
The Board, comprised of a substantial majority of independent directors,
is committed to maintaining outstanding corporate governance practices. In
1998, the Board adopted corporate governance principles which were based
upon a thorough review of best practices at that time, and the Board has
periodically revised its governance principles and committee charters to
reflect corporate governance developments.
Delta also announced the Board of Directors has taken action regarding two
shareowner proposals that were approved at Delta`s April 2003 Annual
Meeting. These proposals urged the Board to seek shareowner approval for
future severance agreements with senior executives that provide benefits
in an amount exceeding 2.99 times the sum of the executive`s salary plus
bonus; and urged the Company to expense stock options.
The Board has responded to these proposals as follows:—The Board
adopted an executive severance policy that requires shareowner approval
for future severance arrangements for executive officers that provide
benefits exceeding 2.99 times salary and bonus. The term “benefits”
includes both severance amounts payable in cash or stock and the value of
any special benefits or perquisites, subject to certain specified
exceptions.—The Board supports the expensing of stock options and urges
the Financial Accounting Standards Board (FASB) to adopt a standardized
valuation method for expensing stock options as soon as possible. As
required by GAAP, Delta discloses the potential expense of stock options
in its SEC filings in the Notes to the Consolidated Financial Statements.
Delta will expense stock options in 2005 once FASB has adopted a
standardized valuation method. The Board believes expensing stock options
prior to FASB`s adoption of a standardized valuation method would:—
Create multiple changes in reporting if FASB adopts a different stock
option expensing method than chosen by Delta; and—Result in financial
statements that are not comparable to its industry peers. Currently only
one major airline expenses stock options.
The enhanced Corporate Governance Program materials and the Executive
Severance Policy are available on our Web site at:
Delta Air Lines, the world`s second largest airline in terms of passengers
carried and the leading U.S. carrier across the Atlantic, offers 6,362
flights each day to 458 destinations in 82 countries on Delta, Song, Delta
Shuttle, Delta Connection and Delta`s worldwide partners. Delta is a
founding member of SkyTeam, a global airline alliance that provides
customers with extensive worldwide destinations, flights and services. For
more information, please visit delta.com .
Delta Air Lines editorial, based on news release distributed by PR Newswire