Continental Airlines has
issued the following bulletin to its employees to update them on the
latest steps in the company’s cost reduction efforts: Continental today announced that its board of directors has agreed to cut
its compensation and forego its entire 2005 stock option grant.
The board will reduce its base retainer fee and meeting fees by 30
percent, effective Feb. 28, 2005. Due to the increased oversight
responsibilities caused by the Sarbanes-Oxley act, the board did not
decrease the audit committee’s retainer or meeting fees.
“Our board took this action in recognition of the sacrifice our co-workers
are being asked to make to help assure the survival of our airline,” said
Larry Kellner, Chairman and Chief Executive Officer. “We appreciate their
efforts to work together toward our goal of cutting $500 million out of
our pay and benefit costs.”
As previously announced on Nov. 18, Continental needs an annual $500
million reduction in pay and benefit costs. Continental plans to implement
the reduction on Feb. 28, 2005. Continental’s financial plan shows
Continental losing hundreds of millions of dollars this year, and the
airline cannot sustain these losses.