SCOOP: Delta Air Lines Is Making Large Bonus Payments To Management Employees

Brother, can you spare $250,000?

Delta Air Lines is paying out bonuses to management employees to compensate them for pay cuts mandated in 2020 as part of the airline’s pandemic belt-tightening. An airline spokesperson confirmed the payments.

The carrier is paying out these management bonuses while on government payroll support and they aren’t offering any ‘make goods’ to front line employees who have seen their hours (and thus pay) cut, or for lower-level employees who in some cases were reduced to three or four day work weeks and received less pay.

According to a Delta employee with knowledge of the matter, the bonuses break down as follows:

  • Managers (Grades 8-10): $8,000
  • General Managers (Grade 11): $25,000
  • Directors & Managing Directors (Grades 12-13): $25,000 – $250,000
  • Sr. Vice Presidents: $250,000 or more

Delta went to great lengths to avoid furloughing any employees during the pandemic, while carriers like American and United furloughed over 15,000 workers apiece. They did this through aggressive efforts to encourage voluntary departures, reduced hours for employees who remained on payroll, and finding other jobs in the company for staff to do while reducing use of contractors and outsourcing.

Much of customer service and above- and below-the wing wing employee compensation has come in the form of profit sharing, where Delta has been by far the most generous in the industry. Employees aren’t seeing profit sharing for 2020, and saw pay cut through reduced work as well. However they’ve been fully paid for the work they did do, and don’t benefit from this program.

Instead, Delta’s make-good focuses strictly on manager-level workers only, who in some cases worked as much or more in 2020 as in 2019, but for less pay. As Delta spokesperson Anthony Black explains,

While all Delta people were affected by the worst year in our history, following a comprehensive pay review of all levels in our organization below the executive officer level, we identified levels that were disproportionately impacted as a result of last year’s events and made a one-time adjustment payment.

This is all happening as the U.S. House of Representatives passed the President’s $1.9 trillion stimulus package which includes a third airline bailout, meaning more payroll subsidies for Delta and other airlines. Yet Delta is voluntarily taking on additional payroll cost, for their highest paid workers, while taxpayers are being asked to cover the expense.

One positive spin to all this, though, is that Delta doesn’t see the need for continued belt-tightening among management employees, and this suggests the world – and airline industry – may be on the cusp of recovering.

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. […] SCOOP: Delta Air Lines Is Making Large Bonus Payments To Management Employees – View from the WingIs Don Carty now running Delta? This is not a good look. I hear other airlines have done something in this general direction but more under the radar. This difference is that those other airlines are union and Delta is not. So anything Delta does has the potential to unionize a workgroup, something it has generally hoped to avoid. This won’t help. […]

Comments

  1. @Rich on A) Southwest, B) those who took *voluntary* leaves and collected unemployment may have the unemployment clawed back, I’ve seen that with American flight attendants. I agree Delta has handled things pretty well with employees overall.

  2. I am one of the people that received what this article calls a bonus. I started at Delta two years ago in IT. I am one of those people that could be considered at risk of “brain drain”. I have people attempting to recruit me on a weekly basis. As part of my salary negotiations Delta considered 10% of my pay to be variable, based on performance. If you remove that 10% variability I took a pay cut to join this company. That 10% is considered part of base pay not a bonus. At this level you are expected to perform, and if you don’t pay is taken away. Bonuses are paid on top of that based on profitably.

    Last year everyone essentially took a 25% pay cut, managers and frontline employees. But then managers also weren’t paid the variable portion of their pay. This means managers, who were working 40 hour weeks on 30 hours pay (as did many non-managers, which is a legitimate complaint), ended up having a 35% or more pay cut. Higher level positions have higher percentages of their salary based on performance.

    There are plenty of pay grades in Delta that pay the equivalent of the manager level salary, but aren’t performance based. Those people only lost 25% of their pay. When this was pointed out, Delta did what they often try to do…make things right by their people. We all win together, we all suffer together.

    As for myself I also voluntarily took a leave of absence. Even with the pay correction I made only 65-70% last year of what I agreed to when I was hired. I choose to do that because I believe in the company. If I didn’t I’d go somewhere else and make a lot more money.

    Not everything is a conspiracy.

  3. How did you get a bonus on a leave of absence. How did your leave contribute to the bottom line of the company you “believe in”??

  4. Given that I didn’t receive a “bonus” I don’t know how to answer your question. My leave of absence was for one month. There are 11 other months in a year in which I got paid.

    The pay adjustment I recieved was less than the amount of pay I missed during my LOA (and less than the 10% of the portion of my pay that is performance based despite being rated a “top” performer). And then I took a 25% temporary pay cut on top of that.

    The combined LOAs of all employees who took them, plus the sacrifice of those who chose to take an extremely generous exit package, affected the bottom line to the point that Delta didn’t have to do any involuntary layoffs. Delta dropped it’s cash burn by 80-90%. That is a huge accomplishment.

  5. Delta management using tax payer dollars to pay out executive bonuses is ludicrous. Who do they think they are a Wall Street Bank? The Delta CEO’s concern for his management team having to tighten the belt during COVID is hypocritical given many Delta employees took equally large cuts in pay or an UNPAID leave, at a 100% pay cut. Where was the CEO’s concern when the Delta pilots took a 47% paycut and lost their pensions completely fifteen years ago? They’ve never received that back…well?

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