AP
Exec pay proposal fails at tense UAL meeting
Thursday June 12, 5:37 pm ET
By Joshua Freed, AP Business Writer
United Airlines CEO gets an earful at annual meeting
WOODLAND HILLS, Calif. (AP) -- The annual meeting for United Airlines turned raucous on Thursday, as frustrated workers shouted questions at the chief executive and booed and hissed when the directors were re-elected.
ADVERTISEMENT
A proposal to allow a shareholder vote on executive pay failed after getting only 21 percent of the vote. But even without the so-called say-on-pay, workers made their views known.
When Chairman and CEO Glenn Tilton ended his prepared remarks by talking about a "renewed commitment to all of our stockholders," one woman in the crowd shouted "Prove it! Give up your bonuses and your pay! Prove it!" A different woman told him, "You continue to be compensated for failure."
Nearly all the 115 people at the meeting were United workers, many of them in uniform. They've been frustrated by Tilton's pay because they took steep pay cuts during United's trip through bankruptcy court, which ended in 2006. Tilton said he has taken pay cuts, too.
United and other airlines have been struggling with a crushing rise in fuel prices. United's fuel bill was $6 billion in 2007 and is expected to jump to $9.5 billion this year, Tilton said. Airlines have responded by raising prices and adding fees, including United's announcement on Thursday that in August it will begin charging $15 for the first checked bag, matching a similar charge added by American Airlines three weeks ago.
Delta Air Lines Inc. plans to merge with Northwest Airlines Corp., a major United rival on flights across the Pacific. Tilton has long publicly favored mergers involving United, but potential tie-ups with US Airways Group Inc. and Continental Airlines Inc. both fell apart.
Tilton said one reason for that was that high fuel prices would limit the money available to integrate two airlines.
The morning started with several dozen United workers picketing outside the hotel, carrying signs such as "UAL at war with employees."
Inside, the meeting hit its first rough patch when shareholders tried to ask questions before the designated time. They said they wanted to address the re-election of the directors before the vote.
At United's annual meeting and most others, shareholder votes were mailed in in advance and by the day of the meeting the outcome is no longer in doubt, although the results aren't publicly available until after the meeting. One shareholder stood up to argue that others were being denied a chance to speak. He invited corporate secretary Paul Lovejoy to rule him out of order.
"Good. You're out of order, sir," Lovejoy shot back.
At the podium, Tilton never lost his cool. A couple of times he backed down and allowed workers to ask questions after saying they should wait for the question-and-answer session later in the meeting.
Once the microphones were opened, shareholders lined up 20-deep to the back of the room. On a screen next to Tilton, a clock with red numbers ticked down from two minutes to zero for each questioner, although nearly all of the questions and Tilton's answers went much longer.
Some workers spoke slowly and respectfully, while others were more heated. One retired ramp worker sounded tearful as he talked about a funeral happening Thursday for a United worker who he said committed suicide because of pressures related to his job. Tilton offered sympathy and said he didn't know about the suicide.
One frequent flier and shareholder who said he has spent more than $100,000 on United tickets said amenities such as lie-flat seats in business class are nice but won't keep workers happy.
Airbus A320 captain Jose Moreno pointed out to Tilton that Continental Chairman and CEO Lawrence Kellner is not taking his salary or incentive pay for the rest of the year.
Tilton said United needs to pay competitive salaries for executives who could choose to work in an industry with a brighter outlook. He said his job is tough, too.
"Someday one of you ought to come up and stand here," he said.
Instantly he had several volunteers.
Tilton, smiling, quickly added, "I'll pick which one of you gets to do it." That got the only laugh of the morning.
