The Wall Street Journal-20080213-Delta CEO Waives Merger Compensation- Move Shows Seriousness Of Effort to Find Partner- A Good-Faith Gesture

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Delta CEO Waives Merger Compensation; Move Shows Seriousness Of Effort to Find Partner; A Good-Faith Gesture

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Delta Air Lines Inc. Chief Executive Officer Richard Anderson told the airline's board that he will waive millions of dollars in compensation to which he would be entitled in the event of a merger.

The move is the latest signal of the seriousness of the airline's effort to find a merger partner, most likely Northwest Airlines Corp. or United Airlines parent UAL Corp. According to people familiar with the discussions, Mr. Anderson last week apprised directors of progress in discussions with Northwest and laid out what the combined airline might look like.

His decision to waive the change-in-control compensation is seen as a good-faith gesture by Mr. Anderson, who took the Delta helm in September, that he intends to remain at the airline well beyond the completion of any deal. Under terms of Mr. Anderson's employment contract, he is eligible over several years for as much as $15 million in Delta stock, performance-based initiatives and travel benefits. In the case of a merger, much of that compensation would vest immediately, even if Delta were the acquirer in the transaction, according to securities filings.

Mr. Anderson "has made clear that he would waive any accelerated compensation that he would otherwise be entitled to in the event of a merger," said Betsy Talton, a Delta spokeswoman. "The personnel and compensation committee of Delta's board of directors has accepted his offer."

Delta wouldn't confirm the progress of any merger talks but has said its board and management are studying possible consolidation scenarios.

According to people familiar with the negotiations, Delta and Northwest hope to reach a merger agreement once the airlines succeed in negotiating a unified employment contract to establish common work, pay and seniority rules with pilots of both carriers. The goal, these people said, is to gain approval from both carriers' pilots in order to avoid the costly and time-consuming contract negotiations that could follow without an agreement. It isn't clear what steps the airlines would follow to integrate other labor groups.