The latest on pay raises.
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To: Delta Colleagues Worldwide
From: Richard Anderson and Ed Bastian
Subject: Pay Increases Coming Soon
When we announced our plans to create one great airline by merging Delta and Northwest, we said that employees would directly participate in the growth and future success of the new Delta with an award of stock and pay raises shortly after the merger. We delivered on the first promise last week and now it is time to deliver on the other. We are pleased to announce that non-contract employees will receive pay increases as we continue our progression toward industry-standard pay by the end of 2010.
Effective January 1, U.S. payroll non-contract employees will receive pay increases of 3% at every step on every scale. For Aircraft Maintenance Technicians and Flight Training Procedures Instructors, pay scales will be increased 4%. We are differentiating the percentage amount of the pay increase for these workgroups based on their pay relative to industry standard. You can expect to see more such differentiation as workgroups achieve industry standard. There will also be further adjustments to certain steps on pay scales in some Airport Customer Service job categories and in Materials Management to better align them with corresponding Northwest pay scales. For international employees, we are continuing the previously established annual salary reviews, with any adjustments made on a country-by-country basis.
Merit employees of the new Delta below the officer and director level, will participate in a 3% merit pool distributed on April 1, 2009, and increases will be based on individual performance. Pilots will continue to receive increases in accordance with their agreement. We will continue our practice of not including officers and directors in across-the-board pay increases until we have reached industry-standard pay for frontline employees.
For our new Delta coworkers from Northwest who are covered by collective bargaining agreements, pay will continue to be governed by these agreements while representation issues are resolved. The contracts make provisions for increases generally in the amount of 1-1.5% on January 1, 2009.
We have taken unprecedented steps to accelerate integration milestones that will bring our operations and workgroups together as quickly as possible. Delta’s pilot and flight dispatcher unions filed promptly with the National Mediation Board to resolve representation issues. Delta has sent letters to the other unions encouraging them to begin quickly addressing representation issues so that the pay and benefits packages for all employees of the new Delta can be aligned.
Delta’s philosophy on pay is pretty simple – provide industry-standard pay with opportunities for additional compensation through programs that allow us to pay you at the top of the industry when we run a great airline for our customers (Shared Rewards) and we earn top tier profits (15% Profit Sharing). Our compensation programs are designed to retain our fine workforce, attract new talent to the company, and establish well-defined performance metrics so we can continue to provide value to our shareholders, our customers and our employees.
Looking ahead, we must deal with a very difficult economic environment around the world, with many predicting a recession in 2009. At the same time, we know these economic pressures also affect you personally, so it was important for us to keep our pay increase commitment to you. Please keep the challenges we face in mind as you work at Delta every day. We need you to help in every way possible – do your job well, provide great service, and save money whenever you have the opportunity.
As a result of your merger stock awards, employees now have a significant ownership stake in the company, worth more than 15% of pay before taxes for most employees. Stock awards and pay increases are tangible proof that we are serious about ensuring you participate in the success you help create. So keep creating success at Delta!
The new Delta is a strong company built for long-term success. Thank you for keeping us on track by running excellent operations and flying our customers to their destinations safely, on-time and with world-class customer service.