David Bronner Letter To Employees


May 18, 2003
Open Letter

Chairman David G. Bronner issued the following open letter to all employees today:

Having read the news media coverage from the weekend about the company’s proxy statement – which included comments by representatives of some of the airline’s labor groups – I want to take a moment to address the clear misperceptions that are out there about Dave Siegel’s compensation.

Dave Siegel’s compensation in 2003 – as reported on his W-2 – was $637,460. Yes, I know that is a lot of money, but it is considerably less than what the CEOs at other major airlines made last year – and it is also much less than what he was offered to come to US Airways in 2002.

The Securities and Exchange Commission requires that a publicly traded company issue to its shareholders a proxy statement that discloses the compensation of top executives. As part of that process, all forms of compensation – including stock grants – must be quantified.

In Dave Siegel’s case, the Board of Directors awarded him a stock grant in 2003 of approximately 1.1 million shares. He is not vested in that stock at the current time and it is uncertain when, if ever, he will be able to sell those shares. But the SEC rules required that the stock grant be given a monetary value in 2003 because that is when it was made. Whether Dave Siegel ever realizes any value or compensation from the grant is still to be determined.

Dave Siegel has already said that he is in negotiations with me about a new employment agreement that is competitive with the compensation packages of CEOs at low-cost airlines. Truth is that those compensation packages usually involve lower salaries and more stock. Dave Neeleman at JetBlue draws a low cash salary, but he holds 7.34 million shares of company stock currently valued at almost $190 million and directly benefits from the company’s profitability and increased stock price. That same philosophy is what guides this Board as we seek to implement management compensation guidelines and policies that will help us return to profitability.

I can assure you that the Board of Directors is quite aware of the sacrifices employees have already made – and are being asked to make again. The labor representatives on the Board of Directors also make sure we do not lose sight of the issues of concern to our frontline employees. The Board has also taken a prudent approach to executive compensation, letting the senior team know that we expect them to make sacrifices along with the rest of the employees. They have done that previously, and will continue to do so.

Furthermore, the entire Board of Directors approved the compensation package for Dave Siegel. So I was quite surprised when I saw comments from labor representatives expressing outrage, completely ignoring the fact that Dave Siegel’s compensation was not a secret and that labor representatives on the Board were fully aware.

In every airline and in every industry, CEOs make more money than the average employee. Dave Siegel leads a team of executives that has kept this airline in business and preserved almost 30,000 jobs. People forget that in the spring of 2002, most people were predicting that US Airways would be out of business by the end of 2002. We are still here, and we don’t have any intention of going away. But we must deal with the changing economics of the airline industry.


David G. Bronner
Other airlines are have not been given this 90-day window of do or die either.

Don't understand these folks at all. He gets credit for throwing the co. into Bankruptcy and getting out of Bankruptcy, had a business plan that doesn't work 8 months later and devises another one in "Jiffy slick" time and asking unprecendented major concessions for the 3 time from labor which will eliminate more jobs.

Then Bronner won't say he saved 30,000. It will be more like 20,000 with all the senior execs on board, more stock options and counting their money in a year, while labor uses their credit cards to survive.
Dave Siegel leads a team of executives that has kept this airline in business

I thought I was doing my part to help keep this airline in business.... Didn't know it was only the executives doing all the work. Bonner needs to take his head out of the sand....
I want Bronner to post another message supporting the employees at U, defending the fact they are lower paid than Southwest employees. Its a discrace. Greeter.
Preserved 30000 jobs...cut 20000...still better than 50%!!!! Good job Dave!!!!

The CEO of Jet Blue was instrumental in forming the company, he had a vision sought out the financing and that is why he holds that number of shares. Unlike Dave who was brought in to "save" the airline. He was awarded the stock options along with a high salary...for what? The only track history he had was running the Express unit for CO. He stated he wanted to change the way we do business, he extracted concessions from all the groups, cut many jobs, took Usair in and out of Chap 11.......And now almost two years later he decides the plan is not working and wishes to change it, and he gets paid a salary along with stock options for a failed business plan????

Yes, Dr. Bronner I have a problem with this...............
Dr. Beonner wrote:
Dave Siegel leads a team of executives that has kept this airline in business and preserved almost 30,000 jobs.

With all due respect,I think 30,0000 employees preserved 30,000 jobs to the tune of 1.2 BILLION dollars worth of concessions.
It doesnt matter what Dave makes, we have no control over that. The fact is that Dave is no leader, he is the Pee Wee Herman of airline ceo's. No matter what he is paid or how much we give he will still fail and blame it on the employee's. David Bronner is setting himself up for a big loss out of his pocket but he can afford it also. Dr. Bronner find a leader and the people will follow. Not a guy who dresses up as Austin Powers or Rocky while we go down in flames.
OK now we have 2 clueless Daves.

Fix what's broken BEFORE you come back to the employee group with your hand out.

Can someone send me Bronner's email address???

My best to you all....
USA320Pilot said:
Dave Siegel’s compensation in 2003 – as reported on his W-2 – was $637,460. Yes, I know that is a lot of money, but it is considerably less than what the CEOs at other major airlines made last year – and it is also much less than what he was offered to come to US Airways in 2002.
CEO's at other major airlines? ? ? Under Dave’s watch we have become a small regional feeder.
A CEO's pay should be closely tied to the stock...if the company performs well, they can be rewarded with someone else's money (the buying shareholders)...if the stock tanks, the CEO's pay should tank....
The problem with tying a CEO's pay to performance of the stock is that it tends to encourage short-term thinking; to the detriment of the company long-term. Important capital spending is delayed to make the balance sheet look good, but future revenues are harmed when needed infrastructure is lacking.
Yup. That's the fatal flaw in the American capitalist system. Essentially, all of the other stuff we all complain about is predicated on the short-term incentives built into the system.
Ok so lets see this: Seigel got a lot of dough just to lay thousands of employees off, close a hangar w/out warning, force employees (those who are still left on the property) to take huge paycuts--2 rounds waiting for round 3, turn midsize cities such as pwm srq abe avp cle dtw and so forth into the three ring circus called mainline express, got midatlantic up and running after a late start, running scared due to swa arrival at phl on may 9. well i guess he must have felt that he should get the dough while screwwing the employees around. I will be darned if i give another penny to this bunch of misfits running the airline
The number of employees that are even remotely willing to go with the new "plan" needs to be reported properly. Don't forget that maintenance is NOT part of ANY "plan", and that their backing of any such "plan" will never happen unless management makes it known by actions and words (in writing) that they intend to keep maintenance in-house.

Otherwise, maintenance will not support any concessions, as they know that they will not benefit or prosper from any such give-back. Then maintenance will become irrelevant (one thing that Chip is right about) and will cause Bronner to say bye bye to everyone. And once again, the low-life maintenance (grease monkey) employees will be blamed by management and the media for U's demise.

This might be history repeating itself. It happened at Eastern. It might happen at US Airways. If it does, Siegel will keep following the trail of Lorenzo and will be eventially "banned" from ever running an airline again.

But...he'll be laughing all the way to the bank while he's wearing his bullet-proof vest...just like Lorenzo.