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(New) Continental Chief Waives Pay Till Airline Turns Profit

From the Wall Street Journal:

Quote:

CHICAGO (Dow Jones)--Continental Airlines Inc.'s (CAL) new chief executive, Jeffrey Smisek, said Monday he won't take a salary or an annual bonus until the Houston airline records a full-year net profit.
In a letter to employees, Smisek said "I am not asking you or anyone else to reduce their pay. What I am asking is that you join me in making Continental profitable again."
According to a filing Monday with the U.S. Securities and Exchange Commission, Smisek's annual salary, as of Jan. 1, 2010, is $730,000. The filing said Smisek's retirement and stock purchase plans "will be impacted by his salary and annual bonus waiver." Smisek will still be eligible to receive cash this year for long-term incentive programs that haven't yet been paid out, said airline spokeswoman Julie King.

Executive compensation has been a bone of contention at some other carriers, where rank-and-file employees gave up salary and benefits in the past decade to keep financially weak airlines flying.
Smisek, who has been president of Continental, took over as chairman and CEO following the resignation of Larry Kellner, who left the airline industry at the end of last year.

His first "official" day on the job and he makes a gesture no other major airline CEO to date has ever made. Nice to know there's someone at the top who realizes his compensation is only deserved if the company is profitable. Way to go, Jeff!

I must applaud Jeffrey Smisek for his choice to forgo a salary until the airline is profitable, well played sir. I think CEOs across the globe should take a page out of your book and follow suit.

Quote:

Originally Posted by PHX

he (Jeff) makes a gesture no other major airline CEO to date has ever made

While not as dramatic, Jerry Grinstein did almost the same thing in 2005. Here's a quote from the article:

Quote:

Grinstein's own, self-imposed pay cut helped win some converts, too. The CEO, a Delta director since 1987 who came out of retirement and moved to Atlanta from Seattle to take the controls in 2004, cut his own salary by 25 percent in November 2005, to $338,000. He also gave up millions in potential bonuses. Most of Delta's other top executives earned well under $500,000, while their counterparts at United and Northwest were earning multiples of that. "There has to be restraint on the part of management," Grinstein insists.

While he did not reduce his salary to zero, he did refuse millions in bonuses and reduced other management salaries to more realistic numbers.

Quote:

Smisek will still be eligible to receive cash this year for long-term incentive programs that haven't yet been paid out, said airline spokeswoman Julie King.

mmmmm I wonder how much they will be?