Teamsters Target UAL Leadership

By Kevin Robinson in News on May 31, 2008 4:05PM

The Teamsters Union, which represents mechanics at Chicago-based United Airlines, is taking its grievances over executive pay and worker compensation directly to the board. In a letter to shareholders, Teamsters General Secretary-Treasurer C. Thomas Keegel is asking that they withhold votes at the airline's upcoming shareholder meeting in June for six members of the board that set executive pay, including CEO Glenn Tilton.

“The board’s failure to act as an effective check on Tilton’s business strategy demonstrates the need for stronger independent board leadership,” Keegal said. “Since emerging from bankruptcy in 2006, the Board has failed to effectively manage the company’s executive compensation program,” adding that Tilton was awarded $39.7 million in total compensation after United emerged from bankruptcy protection in 2006. Executive pay has been a contentious issue among UAL's union membership.

Mechanics recently voted to join the Teamsters union, ousting the Aircraft Mechanics Fraternal Association in March. UAL mechanics are particularly worried the airline's recent merger talks with both Continental Airlines and US Airways, as well as plans to sell off the airline's maintenance division. The union claims that United has heavily outsourced much of its maintenance work and cut its pension obligations, while increasing executive pay. “Compensation that attracts and retains talented executives is clearly in the best interest of all our shareholders,” a United spokeswoman told Crain's. “Our executive compensation is market-based, on-par with other comparably sized companies, and most importantly, 91% of it is paid out only when certain goals are met.”

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