Salaried and management employees will have a reduction in wages, ranging form 2.8% to 10.7%, and the company will forgo the planned 2002 salary increases. Additionally, all participants in the recovery plan will be issued stock options on a post-issuance basis.
The recovery plan is expected to save the company $1.3 billion over the next five and a half years. Although salaried and management employees are not part of the United Airlines Union Coalition, the company said the new compensation plan is consistent with the framework agreed upon by the union and the company.
Officers of the company are excluded from the recovery plan, as the board of directors is currently finalizing plans for an officer contribution program to the financial recovery operation.
UAL, Corp. is making these and other moves in an effort to avoid filing for bankruptcy. Currently the airline has until December 2, 2002 to raise enough money to cover $375 million in debt repayments to avoid bankruptcy filings.