MINNEAPOLIS -- The three biggest unions at Northwest Airlines Corp. objected to its reorganization plan on Monday, saying its plan to give executives almost 5 percent of the company is too expensive.
The objections came just as unsecured creditors wrapped up voting on the plan, although results of the vote weren't expected immediately. At Delta Air Lines Inc., results weren't known for a week after the creditor vote on its Chapter 11 case ended.
The union objections came in response to Northwest's disclosure on Friday afternoon that Chief Executive Doug Steenland would get $26.6 million in restricted shares and options after the carrier exits bankruptcy protection. The company had previously disclosed that its top 400 executives would get almost 5 percent of the company, but Friday was the first time it said how much Steenland would get.
Pilots called the payout an "incredible grab of value by a few top executives."
The Air Line Pilots Association acknowledged that executives in other recent airline bankruptcies have been handed sizable chunks of the reorganized company. But, it said in its filing, "No matter how many comparative charts are generated, or how many high-priced compensation consultants testify, the employees of Northwest will conclude, with full justification, that the principle of shared sacrifice is dead and buried."
Objections were also filed by flight attendants and the union that represents ground workers such as baggage handlers and reservations agents.
The disclosure comes at a key time for flight attendants, who began voting on Monday on a tentative agreement that would lock in their pay cuts and work rule changes through 2011, similar to agreements already ratified by Northwest's other unions. Negotiators for the Association of Flight Attendants-CWA said they reached the tentative agreements so the cabin workers would have a shot at a claim in Northwest's reorganization in exchange for some of what they gave up.
The voting runs through May 29. Northwest doesn't need their approval to emerge from bankruptcy.
Also Monday, Northwest said it has applied to have its new shares trade on the New York Stock Exchange after it emerges from bankruptcy, under the symbol "NWA." Before its reorganization, it had traded on the Nasdaq Stock Market.
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