The directors of US Airways have awarded chief executive David Siegel a compensation
package with a potential value of nearly $11 million, even as the airline tries
to wring more pay concessions from its rank-and-file workers.
Union leaders called Siegel's pay package hypocritical.
The Associated Press reports that a proxy statement, filed Friday, indicates
Siegel received a salary of $600,000 and no bonus in 2003, plus other cash compensation
of $98,890. He was also given 1.13 million shares of US Airways stock, valued
at $8.3 million under Securities and Exchange Commission accounting rules.
He also received an option on 669,600 shares of stock, with a strike price
of $7.42 a share, valued at $1.9 million, assuming those shares increase in
value 5 percent a year through 2010. Because the stock currently trades at less
than the strike price, they now have no value.
The total compensation package, including the potential value of the options,
But the airline says that figure is misleading because it inflates the value
of the stock awards. Unlike most stock grants, which are redeemable immediately,
Siegel cannot cash in his shares until at least 2005, Castelveter told the AP.
And the $8.3 million value is based on the stock's value of $7.34 a share on
the date they were granted. US Airways, the nation's seventh-largest airline,
now trades at $4 a share.
Castelveter also said that Siegel's salary is less than the $750,000 a year
to which he is entitled under his contract.
The AP reports that because the company did not file a proxy statement in 2003--when
it was in Chapter 11 bankruptcy protection--an exact comparison of Siegel's
2003 pay to his 2002 compensation package is not possible. Excluding stock options
for both years, though, Siegel's 2003 compensation of $8.996 million dwarfs
his 2002 compensation of $1.447 million.
Other major airlines have scaled back executive compensation while the industry
has struggled and sought federal assistance since the Sept. 11, 2001 attacks.