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Tue, Mar 20, 2007

Delta Employees Expected To Profit From Failed US Airways Takeover Bid

Will Receive $480 Million In Benefits; Grinstein Won't Collect Bonus

Employees at Delta Air Lines who stood up to fend off a hostile takeover attempt by US Airways will be rewarded for their loyalty, when the carrier emerges from Chapter 11 bankruptcy protection.

The Financial Times reports Delta workers will receive $480 million in cash and stock options, as part of a restructured pay and incentives package. The plan also includes profit-sharing options and bonuses for staff and executives.

Under the plan, some 39,000 Delta employees will receive a 3.5 percent stake in the airline. Approximately 12,000 managers will receive a further 2.4 percent stake in "equity opportunities," the airline announced Tuesday.

Interestingly, one Delta won't receive any such bonus: CEO Gerald Grinstein, who stated last year he plans to retire from the airline once it emerges from bankruptcy.

Though many credit Grinstein with leading the charge against the US Airways bid, he says Delta's employees should be rewarded for sticking with the carrier through difficult times.

"They let it be known how miserable and unhappy they would make life [under US Airways]," Grinstein told the Financial Times. He emphasized the incentive plan was not a ploy to "buy" employee support and morale.

Meanwhile, Delta CFO Ed Bastian said the effort in fending off the US Airways bid helped the airline gain leverage with its creditors' committee, to win support for its reorganization plan.

"They said 'No' to US Airways and 'Yes' to investing $500m in our people," said Bastian. "That was certainly something that [US Airways' CEO] Doug Parker was not planning to provide."

FMI: www.delta.com

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