Delta CEO details broad salary cuts

ATLANTA — Delta Air Lines Inc.'s chief executive said Tuesday he is declining his six-figure salary for the rest of the year as he detailed a 10 percent pay cut that will affect senior officials, administrative staff and ticket and gate agents.

CEO Gerald Grinstein also said in a memo to employees that the Atlanta-based company will increase the shared cost of health-care coverage and make changes to retirement benefits as part of its turnaround plan.

"In distressed times like these, when everyone must sacrifice, it is especially important that leadership participates, and they have. It is also necessary for me to lead the way," Grinstein wrote in the memo, adding that he has declined his salary.

Delta, which operates a hub at Salt Lake City International Airport, would not immediately say how much salary Grinstein is relinquishing. His predecessor, Leo Mullin, earned about $500,000 a year.

Also Tuesday, Delta's pilots said they have ratified an agreement allowing Delta to employ newly retired pilots to prevent staffing shortages. Delta has warned it would have to file for bankruptcy if it didn't slow the pace of early pilot retirements by the end of September.

The agreement between Delta and its pilots also includes written assurance from management that the company will not file notice of intent to terminate the pilots' pension plan before Feb. 1, even if the company files for bankruptcy protection by then.

Of voting pilots, 90 percent supported the tentative agreement, with 76 percent of eligible pilots casting a ballot.

Delta shares gained 40 cents, or 13.6 percent, to close at $3.34 in trading Tuesday on the New York Stock Exchange.

The cost cuts, meanwhile, are part of efforts by the nation's third-largest airline to avoid bankruptcy. The cuts do not affect pilots, who are unionized and work under a contract.

"We have a small window of opportunity available to us to avoid Chapter 11 that some other carriers do not have," Grinstein said in his memo to employees. "It is in everyone's best interest that we protect Delta's future by taking these steps together now."

Among the cuts he detailed in the memo are:

• An across-the-board pay reduction of 10 percent for executives, supervisory and administrative, and what were called front-line employees (with smaller reductions for some entry-level positions).

• Increases to the shared cost of health-care coverage.