As Northwest struggles to get themselves profitable again, top executives continue to make larger salaries. Though they did take a pay cut from last year, their salaries are still extremely high for a company that has yet to see a profit in several years.
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As it awaits a crucial union vote on a contract that slashes pilots' wages, bankrupt Northwest Airlines revealed Monday how much it has cut its top executives' pay.
President and CEO Doug Steenland's annual base pay for 2006 will be $516,375, down 24 percent from the $675,000 salary awarded him in late 2004, the airline said.
And Northwest said Steenland took a 58 percent cash compensation cut last year, passing up $675,000 in incentive pay while taking a base pay cut. His 2005 cash compensation totaled $571,354.
Steenland also received $2.2 million in long-term incentive payments last year, though. They were tied to Northwest profits from past sales of its interests in a number of e-commerce businesses, notably the Orbitz and Hotwire travel services.
Northwest invested about $35 million in those businesses when they were startups. But it sold its stakes in them for $190 million.
Airline executives get a cut of the gains because of their efforts to develop the businesses. Payments are spread out over a number of years to encourage the executives to stay with Northwest.
The airline laid out its compensation for Steenland and other top officers in a filing with the Securities and Exchange Commission.
Executive pay has been a volatile issue at the airline.
Northwest has extracted - or hopes to extract - wage cuts of 11.5 percent from some groups of union workers at the airline and up to 40 percent from others.
On Wednesday, Northwest's union pilots wrap up a vote on a contract that calls for 24 percent wage cuts. That's on top of a previous 15 percent reduction.
The airline noted that it has canceled all unvested restricted stock and phantom stock award held by Steenland and other executive officers.
From 2002 to 2005, Steenland's forgone compensation and canceled stock awards totaled $5.1 million, Northwest said.
But Northwest executives will likely receive new stock awards if the airline emerges from bankruptcy.
Steenland was the Eagan-based airline's president in 2004 but took on the CEO post in October of that year with the departure of Richard Anderson, who joined Minnetonka-based UnitedHealth Group.
Anderson, now an executive vice president at UnitedHealth, received $1.2 million in salary and bonus payments in 2005, plus another $400,000 in other compensation. In 2004, he received restricted UnitedHealth stock awards worth $3.6 million at the time.
Current annual salaries for other Northwest executive vice presidents are:
Tim Griffin and Philip Haan, $401,625;
Neal Cohen, $382,500;
Andrew Roberts, $325,125.
Like Steenland, they took 10 percent base pay cuts in December.
None of them received annual performance bonuses in 2005.
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