Lower salary in the works for Hawaiian's trustee
By Dan Nakaso
Advertiser Staff Writer
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The salary would make Gotbaum the second-highest paid U.S. airline executive, according to estimates by some groups critical of his proposed compensation package. But a new, lower compensation plan could be reached today or tomorrow, according to people familiar with the discussions.
Any compensation plan must be approved by the federal bankruptcy court. A hearing is scheduled Jan. 23.
U.S. Trustee Steven Katzman, who oversees the southern district of California, Hawai'i, Guam and Saipan, said he could not confirm discussions about Gotbaum's salary.
"I will confirm that we are performing our statutory obligations," Katzman said.
Asked if his office's performance of obligations was triggered by recent objections filed in court to Gotbaum's salary, Katzman said: "Any analysis we conduct is completely independent from what private parties may proffer."
Hawaiian Airlines' attorney Bruce Bennett did not return telephone calls seeking comment. Gotbaum said through a spokesman that he was unable to comment immediately.
Several groups involved in the Hawaiian Airlines bankruptcy have complained about Gotbaum's proposed salary, including members of the airline's committee of unsecured creditors.
Some committee members said they were stunned by Gotbaum's original $700-an-hour compensation proposal, plus $10,000 in monthly expenses. They asked not to be identified yesterday because they work on the airline's finances and have been asked to keep their discussions confidential.
Some committee members, especially representatives of the Air Line Pilots Association, were particularly angry that Gotbaum simultaneously failed to make a $4.25 million payment to the pilot pension fund, and said he might have to withhold further payments.
Another member of the committee said yesterday that some creditors believed Gotbaum should be working faster to get Hawaiian out of Chapter 11 bankruptcy protection.
"Let's get this done," the committee member said. "The sense is that he's dragging us along."
Hawaiian filed for bankruptcy protection in March. Gotbaum was selected to reorganize Hawai'i's largest airline in July. His background included stints as assistant secretary of Defense and Treasury, controller of the Office of Management and Budget and the first CEO of The Sept. 11th Fund.
In court filings, groups such as the Association of Flight Attendants said Gotbaum lacked the airline experience to warrant an "excessive" salary of $500 per hour — the current proposal — to be capped at $70,000 a month.
In "light of his relative inexperience as a chairman and chief executive officer and the absence of any such experience in the airline industry," the flight attendants said, "his compensation should be on the low end."
Gotbaum replaced John Monahan, who resigned unexpectedly three weeks after taking the job.
Monahan's salary had yet to be determined. But members of the committee said he was asking for $45,000 to $50,000 per month.
Reach Dan Nakaso at dnakaso@honoluluadvertiser.com or 525-8085.
