ATLANTA – Delta Air Lines Inc.’s top two executives sought to prepare employees and investors Wednesday for what they will see when the world’s largest airline operator files its proxy: large total compensation figures for the leaders in 2008, a year in which the company posted a net loss of $8.9 billion.
Chief Executive Richard Anderson and President Ed Bastian took the unusual step of providing their W-2 earnings for last year in a memo to employees that also was filed with the Securities and Exchange Commission.
They said the figures represent the actual value of their 2008 compensation as reported to the government, even though the total compensation that will show up in their proxy Thursday may show larger numbers.
The memo comes at a time when Americans are increasingly scrutinizing high executive pay amid massive job losses among rank-and-file employees in numerous industries due to the deep economic downturn in the U.S.
The Associated Press has its own compensation formula that is designed to isolate the value the company’s board placed on the executive’s total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don’t include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the SEC, which reflect the size of the accounting charge taken for the executive’s compensation in the previous fiscal year.
The two Delta executives said their “ongoing” compensation is in the bottom third of U.S. corporations of similar size as Delta.
“However, it is still a considerable amount and we do not take it for granted,” Anderson and Bastian said.
The executives said Anderson’s W-2 earnings in 2008 were $2.5 million, while Bastian’s was $5.2 million. They acknowledged that stock and option awards they were granted last year may cause total compensation figures in the proxy to be higher, but they stressed that much of that compensation is not available to them and has little to no current value because of Delta’s current stock price.
They also noted that the numbers that will show up in the proxy were influenced by Atlanta-based Delta’s emergence from bankruptcy in 2007 and its acquisition of Northwest Airlines in 2008.