Presented by a senior Delta pilot and backed by the carrier’s pilots union, the plan overcame board opposition to win backing from holders of more than 44 million, or about 53%, of shares voted at Delta’s shareholder meeting last week, the Wall Street Journal reported.
Under the proposal, Delta’s board would have to seek shareholder approval for any “extraordinary retirement benefits” given to senior executives, including credit for years of service not worked, accelerated vesting rights, or funding bankruptcy-proof pension accounts.
Such benefits awarded to Leo Mullin, Delta’s former chief executive, and other top executives as part of retention packages caused an uproar during 2003 in light of the carrier’s deteriorating financial position, cutbacks in employees’ benefits, and layoffs (See Delta Deep-Sixes Executive Pension Plan Payments ).
Gerald Grinstein, Delta’s chief executive since January, said the board would abide by the wishes of shareholders. The board, in a statement attached to the proxy filing, said the measure was unnecessary and would restrict Delta’s ability to attract and keep top management talent.