Letter to Glenn Tilton regarding executive compensation

Date: March 17, 2005
Type: MEC President Letter

Glenn Tilton
Chairman, President and CEO
United Air Lines
1200 E. Algonquin Road
Elk Grove Township, IL 60007

Dear Glenn:

UAL Corporations 2004 Security and Exchange Commission 10K Filing reveals alarming information about executive compensation. As expected, the filing details the prosperous Success Sharing bonuses paid to executives based on the exceptional performance of front-line employees who got the airplanes out on time and brought passengers back for return trips. While these bonuses were only half as generous as they could have been because financial targets for 2004 were missed, they were in fact greater than employees had expected because of the clandestine increase of base salary awarded to Jake Brace, Pete McDonald, John Tague and you. It is extremely disconcerting that for each year that our company has been in bankruptcy, we have seen increases in executive compensation.

Equally as disturbing is the revelation; contained in a footnote in the filing, "any bonus for 2003 under the UAL Corporation Performance Incentive Plan for the named executive officers is not calculable at the time of filing this report as the Human Resources Subcommittee has not determined the amounts to pay the officers at this time." For United to even be considering a bonus payment for the 2003 calendar year is beyond any measure of reason.

Needless to say, Flight Attendants are again disappointed by the unconscionable move of our airline's executives to pad their own pockets at the same time you were demanding wage and benefits cuts from employees, attacking retiree healthcare and moving forward with plans to terminate pensions. It is apparent that the pledge of "shared sacrifice" has been abandoned.

In February of 2004, United Airlines spent a great deal of time talking about "Success Sharing" as the ying of the "shared sacrifice" yang. The company defined success in a mailer to all employees and stated, "When we talk about success for United in 2004, we mean emerging from bankruptcy." Today, media articles report that United rationalizes the raises as compensation for increased responsibilities, a view that is anathema to a typical company in bankruptcy. Clearly the increased salary for corporate officers has no connection to a job well done or the accomplishment of corporate goals such as exiting bankruptcy. The public rationalization of the increases in compensation is a painful slap in the face to Flight Attendants who are working harder than ever with longer hours, paying more for their benefits and earning wages at 1991 rates.

The company proclaims that the success sharing payments are based on the concept of "pay at risk." That concept is at odds with the generous raises awarded top executives for the 2004 calendar year. It is unconscionable that as current management demands more sacrifice from Flight Attendants, your executive team has set an improved compensation scheme in place for themselves. Furthermore, it is not lost on Flight Attendants that the 2005 Success Sharing goals include financial measures that exclude the price of fuel and pay financial goal bonuses quarterly - guaranteeing that executive "at risk pay" is shifted to a category that would be more aptly referred to as "sure pay." The original intention behind Success Sharing has been corrupted.

The Association of Flight Attendants-CWA cannot stress enough the importance of swift action on your part to reverse the unethical payouts provided to United's executive officers from our bankrupt airline. Return the money.

Sincerely,

Greg Davidowitch, President
United Master Executive Council

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