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.
Sincerely,
David G. Bronner
Chairman
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.
Sincerely,
David G. Bronner
Chairman
