Eintime Conversion for education and research 05-14-2006 @ 16:52:55
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United CEO Could Get $15M in Incentives

Filed at 2:27 a.m. ET

CHICAGO (AP) -- United Airlines CEO Glenn Tilton could receive stock and options worth $15 million, base pay of more than $600,000 annually and a bonus that could double his salary when the carrier emerges from bankruptcy next month, according to company documents.

Tilton would get 545,000 restricted shares and 822,000 options, or just more than 1 percent of the $1.9 billion in equity United intends to issue, if a bankruptcy judge approves.

Overall, United plans to set aside 8 percent of the equity it plans to issue -- at a value of around $152 million -- for about 400 salaried and management employees. The compensation awards were disclosed in UAL filings Wednesday with the court and elucidated by company spokeswoman Jean Medina.

The proposed incentive plan for senior managers and directors of the nation's No. 2 airline will be a touchy issue as a Chicago bankruptcy court starts hearings Jan. 18 about United's plan for leaving more than three years in bankruptcy court.

Unions representing workers at United, a unit of Elk Grove Village, Ill.-based UAL Corp., criticized the potentially lucrative equity programs Wednesday, noting that United workers have agreed to millions of dollars of pay cuts to help restore the airline to financial health.

''Such compensation for executives is outrageous considering the sacrifices other employees have made,'' said Joseph Tiberi, a spokesman for the International Association of Machinists and Aerospace Workers. ''Our members alone will have sacrificed more than $4.6 billion'' in wages, benefits and pensions.

Medina strongly defended the incentive plan.

''Such equity programs are standard practice,'' she said. ''We believe this program aligns the interests of management and shareholders. And if we are going to attract the best talent, we believe this is essential.''

A compensation expert hired by United estimated the company's restricted stock would be worth $13.75 per share, with the options valued at $9.12 -- though the final value of the equity grants will depend on how the reorganized company's stock does on the market.

Three executive vice presidents at United would pocket restricted stock and options worth $6 million each, and four senior vice presidents would each receive equity grants worth $3 million. Thirty-one other company officers would each get $750,000 in grants, and 366 other managers would receive $100,000 in equity.

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