Delta to reduce pay of executives, pilots

ATLANTA – Delta Air Lines, looking to reduce labor costs as it struggles through a prolonged travel slump, said it would trim the compensation of its executives and indicated that pilots’ pay might be cut sometime in 2003.

Starting March 1, chairman and chief executive Leo Mullin and president and chief operating officer Fred Reid will take 10 percent pay cuts. All employees at the vice president level and above – roughly 50 people in all – will take an 8 percent cut.

Delta’s executive vice president for Human Resources, Bob Colman, said in a memo to employees that workers below the vice president level should not expect pay increases. And he said “events beyond our control could force us” to reduce the pay of pilots. The memo, dated Feb. 4, was circulated to journalists late Wednesday.

Pilots are Delta’s highest-paid employees next to executives. Many make more than $100,000 a year.

According to Delta’s most recent proxy statement, Mullin was paid $596,250 in salary and $1.6 million in stock in 2001. Reid was paid $655,000 in salary and $607,212 in stock. Neither executive received a bonus in 2001, the year that terrorist attacks, coupled with an economic downturn, sent the airline industry into a downward spiral it has yet to come out of.