The new CEO of Continental Airlines Inc. says he will refuse to accept his $730,000 salary or annual bonus until the company makes a full-year profit.
Jeffery A. Smisek, who became CEO on Friday after Lawrence Kellner stepped down to join a private-equity firm, told employees of his pledge Monday.
Continental, the nation's fourth-largest airline by traffic, lost $367 million in the first nine months of last year.
Smisek said if employees want better pay and benefits, they need to focus on making money. He said he was making his pledge because "the tone for any business is set at the top."
Smisek might not have to stick to his pledge for long. Analysts surveyed by Thomson Reuters expect the airline to close the books on 2009 by reporting a loss of more than $38 million in last year's fourth quarter. But for 2010, they predict a profit of about $190 million.
Continental reported large losses in the first and second quarters, and accompanied the second-quarter results with plans to cut 1,700 jobs.
In a regulatory filing Monday, Continental said Smisek's annual salary is $730,000. In his previous job as president and chief operating officer, he was due a salary of $576,000 in 2008 but declined more than half and was paid $240,000. He got no bonus that year — nor in the previous two years — but was paid $1.4 million under an incentive program that rewards executives for the company's performance over the previous three years.
Monday's regulatory filing said Smisek's pledge to forego salary and bonus would not affect future payments under incentive programs.
In his note to employees Monday, Smisek said the work force must focus on "conquering our biggest challenge of all: making money on an ongoing basis." He said profits would make possible all the things that employees want, while continuing losses will lead to furloughs and stagnant pay and benefits.
Smisek said he wasn't asking anyone else to cut their pay.
Continental shares rose 10 cents to $18.02 in late afternoon trading.
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