United Airlines Holdings Inc. (NYSE: UAL) may lay off as many as 36,000 employees just after October 1. It cannot make the move any earlier. A loan made by the government forbids it from cutting people until September 30, because retaining employees until then is the condition of that loan. New CEO J. Scott Kirby, who made over $16 million last year, will waive his salary until the end of the year. However, his compensation will not go to zero. He has been granted a long-term restricted stock award. It is a good deal for a man who may push out workers at a count that is equivalent to a small city.
The deal for Kirby’s compensation lessens his sacrifice as the carrier’s troubles deepen due to the spread of COVID-19. The 36,000 figure is about the same as the population of Jackson, Michigan. Imagine that everyone in the city lost his or her job. Of course, that is not a realistic measure, because it would include every man, woman and child. The working population of Pontiac, Michigan, is a fairer equivalent.
The Kirby deal is another sign that CEOs who waive base pay are giving up nothing close to their entire pay package. Of course, the 36,000 people who may leave will involuntarily give up theirs. Kirby might have waived his stock grant as well. He didn’t.
Another indication of the size of the layoffs came from the Association of Flight Attendants-CWA President Sara Nelson: “But the fact remains that these projected furlough numbers are larger than the total size of most mainline airlines a decade ago.”
Kirby also will get to keep his office.
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