Delta Air Lines' new chief executive, Gerald Grinstein, said on Tuesday the airline will not give cash bonuses for 2003 to top executives and that it is rethinking its approach to executive compensation.
In a memo to employees, Grinstein also said the No. 3 U.S. air carrier has developed a plan for some executives to defer separate retention bonuses that are payable in January.
"I know that executive compensation remains a controversial issue," Grinstein wrote. "As we move into a new year, it is important for us to clear the air on that topic so we can focus all our energy on the urgent job of making Delta strong and profitable again."
Atlanta-based Delta is in the midst of contract talks with pilots, its only major unionized group, in an effort to reduce costs.
Executive compensation has been a hot button in the troubled airline industry as carriers have turned to employees seeking steep pay cuts while senior officers maintain hefty pay packages.
Delta's former CEO, Leo Mullin, came under fire earlier this year from workers and shareholders over retention bonuses and pension perks given to senior executives while the company was losing money and the industry faced a financial crisis.
Delta announced in late November that it had chosen Grinstein, a longtime board member, for its top job after Mullin unexpectedly announced his retirement. Jack Smith, former head of General Motors Corp. , assumes the position of chairman in April.
Shares of Delta were up 4 percent at $11.87 on the New York Stock Exchange on Tuesday afternoon.