Reid's wishes were granted. Senate Appropriations Chairman Ted Stevens of Alaska next succeeded in exempting Alaska Airlines. Finally, Sen. Daniel Inouye of Hawaii, second ranking Democrat on the Appropriations Committee, threw out Hawaiian and Aloha.
To the uninitiated, limiting the pay cap to transpacific and transatlantic carriers resulted from impromptu interaction between three Senate old bulls. To savvy lobbyists, it was all orchestrated in advance.
Only the Big Six airlines -- American, United, Delta, U.S. Airways, Northwest and Continental -- now were covered, and only the top five executives from each company. But this was soon trimmed to the top two for a grand total of 12 covered executives.
That exempts Delta chief financial officer M. Michele Burns, whose base salary of $560,000 has ballooned to $3,062,910. Also exempted is Jeff A. Smisek, Continental executive vice president, who has gone from $540,000 to $2,987,860. And the exempted Southwest's Kelleher surpassed Delta's Mullin when he realized $13,943,075 last year in exercising stock options. Highly profitable Southwest, incidentally, shares significantly in the bailout.
In fact, Mullin, whose pay raise launched the congressional exercise in dictating compensation, was not able to bank anything like the much advertised $12.9 million. He actually received $2,196,188, with the additional $10 million estimated to be realized over the next decade.
Congressional passion over executive pay was surpassed by American Airlines labor unions, which protested bonuses granted to executives. American CEO Donald J. Carty (whose bonus was $1.1 million) prostrated himself Monday in canceling bonuses, abjectly apologizing to employees and union leaders, and promising to be "a better person." The bonuses, approved by an independent board of directors, were an attempt to stem the flow of 14 officers plus many senior managers from American to more lucrative industries over the past 18 months. That's the way the capitalist system works, when it is free from quirky congressional intervention.
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