Northwest's board stands behind bonuses

By Rajiv Vyas
Knight Ridder News Service

NEW YORK — The board of directors of Northwest Airlines defended the compensation given top executives against complaints by flight attendants at the annual shareholders meeting yesterday.

Northwest's flight attendants staged a rally before the meeting protesting bonuses paid to senior executives when the airline was losing millions every day and flight attendants were asked to take annual pay cuts of about 10 percent.

"We have a management problem at Northwest," said Mollie Reiley, trustee of Local 2000 of the Teamsters, which represents the Northwest flight attendants. She challenged chief executive Richard Anderson "to live on a flight attendant's salary for one year and then come and talk to us about pay cuts."

During the shareholders meeting at the Equitable Life Building in New York, shareholders and workers asked members of management whether they plan to take more bonuses this year or accept lower pay and benefits.

The overall management compensation at Northwest is significantly less than that at other airlines, said Gary Wilson, chairman of the Northwest board. "The term bonus is totally misleading in our case. Bonus is a component of salary which must be earned."

Wilson said Anderson was undercompensated when compared with other airline CEOs. Anderson was paid 44 percent of what Delta's CEO received, 37 percent of Continental's and 80 percent of AirTran's, Wilson said.

"Executives elected to accept only 41 percent of the 2002 performance pay to which they were entitled," said Wilson.

Northwest, the fourth largest airline, lost more than $1.5 billion since the 2001 terrorist attacks. To return to profitability, the airline has asked its seven labor unions to terminate their existing contracts and sign new ones with lower salaries and benefits.