Northwest Airlines said in a regulatory filing that Chief Financial Officer Neal Cohen received a 5 percent raise in his base pay, to $401,625 from $382,500. The bankrupt airline pointed out that on December 1, 2004, all officers took a 15 percent reduction in annual base salary, and on December 1, 2005, all officers took an additional 10 percent reduction in annual base salary, 5 percent of which will continue while Northwest remains in bankruptcy.
Also, on November 1, 2005, parent company NWA Corp. cancelled all outstanding restricted stock and phantom stock awards held by Northwest’s executive officers. The total dollar value on the date of grant of the restricted stock and phantom stock awards that were nixed amounted to $878,500 for Cohen.
Andrew Roberts, the Northwest operations chief, also received a pay hike. Roberts now makes the same base salary as Cohen, but his raise amounted to a 24 percent jump in pay. Chief executive Doug Steenland’s base salary was reduced by about 10 percent to $516,384. But other compensation brought Steenland’s total package for 2006 to $1.8 million.
The Northwest executives will be in good shape financially when the company emerges from bankruptcy. At that time, the executives will own a total of 4.9 percent of the company, according to the Associated Press, citing earlier disclosures. They will receive their equity in the form of restricted stock and options.
Pay is a closely watched item at Northwest, and other bankrupt companies, where the rank and file usually is the last to see pay increase after agreeing to take cuts. Union workers at the company have been working for less money in an effort to save $1.4 billion annually, noted the AP.
Reportedly, part of the savings would come from the pay checks of flight attendants, who are preparing to vote on concessions that would save the company $195 million a year. “[Executives] took concessions, but it looks like they’re going to get almost four times their concessions back with the executive stock plan that they announced a few weeks back,” union spokesman Andy Wisbacher told the wire service.