Lawrence Kellner, Continental CEO, Sees Compensation Fall To About $5M

DALLAS — The chief executive of Continental Airlines Inc. got compensation the company valued at nearly $5 million in 2008, down 17.1 percent from the year before, according to analysis of a regulatory filing Friday.

Chairman and CEO Lawrence W. Kellner's salary was cut by 58 percent. But more than half of his 2008 compensation was in the value of stock and option grants, and the company doubled his target share award from the year before.

The eventual value of those grants is unclear. Shares of Houston-based Continental were worth 56 percent less Friday than they were when the latest grants were issued in February 2008.

Continental lost $585 million last year as it was stung by record fuel prices during the year and a slump in travel late in 2008. The company's shares fell nearly 19 percent last year and another 26.6 percent this year through Friday as the recession has undercut travel demand.

Kellner's 2008 salary was reduced to $296,875 from $712,500 in each of the two preceding years. He didn't get a bonus _ same as the last two years _ and got $1.9 million in non-stock incentive payments, down from nearly $3.3 million the year before, when Continental was profitable.

Kellner got stock-related grants that the company valued at nearly $2.7 million when they were issued in February 2008. The company set a target of 90,000 shares, but he could get more or fewer shares, according to the proxy statement that the company filed with the Securities and Exchange Commission.

The year before, the company valued the CEO's stock grants at more than $1.9 million with a target of 45,000 shares.

The Associated Press calculates executive compensation based on salary, bonuses, incentives, perks, above-market returns on deferred compensation and the company's estimated value of stock options and awards granted during the year.

The calculations don't include changes in the value of pension benefits, and they often differ from the totals companies list in the summary compensation table of proxy statements.

Continental earned about $800 million in 2006-2007, but like most other U.S. carriers it fell into the red last year, whipsawed by high fuel prices early and falling travel demand later in the year. It also took losses of fuel-hedging transactions.

The company's revenue rose by $1 billion, to $15.24 billion, but fuel expenses jumped $1.9 billion.

Continental lost another $136 million in the first quarter of this year as traffic fell and business travelers saved money by switching from first-class to coach cabins.

Continental, which operates its mainline airline plus regional affiliates, scheduled its annual meeting for June 10 at a Houston hotel.

Comments

[Tom95134]

FALL to $5,000,000?

How about NOTHING, NADA, ZERO, BUPKUS. Or, better yet, he should be paying to work there since under his management the company has lost money .

[Jamie Samans]

Why not extend that across the board; how about we set goals for every employee, and anyone who doesn't meet his or her goal just gets no pay for the year? Gee, that would make sense, huh?

Kellner took home a salary far below the average in his industry. He voluntarily gave up much of it and cut other executives' pay to try and avoid laying off employees. He overfunded Continental's pension plan. His airline is the only one to still serve FREE meals in Coach.

Continental is an AIRLINE. It makes money when people fly, and when fuel prices are low. It's just not all within his control every day, and he's taken far more personal responsibility than any other airline CEO for his company's performance.

It's just ridiculous the way that you all jump on the bash-CEOs bandwagon without a bit of knowledge. Not everyone is the same; not every company that loses money is losing money because of inept managers.

[jteamaz]

Poor guy, I hope he can scrape by on a paltry $5 million a year. Perhaps they should look into food stamps....

[TJCole]

I would so Nationalize our Airlines like yesterday if I had to power as our President does under NSPD-51 and HSPD-20 with just one word.."Emergency" along with our corrupt banking institutions..and all major energy and our ridiculous almost comical embarrassing Health Care Industry..!

[Jamie Samans]

So, in your miracle world, the government would operate everything. Wow, I can't wait.

[mtdon]

i can't make it....how can I pay my bills on 5 million....it's not fair....wa wa wa

[Oxonian2001]

Now, now, don't forget he has priorities. You know--like paying staff at his various 10,000sq. mansions, buying the latest couture for his wife and mistress, and paying for the prep schools which his spawn no doubt attend. Poor poor pitiful CEO.

[Jamie Samans]

He ISN'T complaining.

Kellner volunteered for the salary cut and eliminated his own bonus. He also cut every executive's pay before laying off a single worker, and directed $50M more into the Continental pension plan than was required.

Start doing some actual research, people. Larry Kellner is one of a very small number of executives in this country who really is trying to run a company that's good for employees as well as shareholders, and your badmouthing him is insulting.

[quindy]

As long as they transport passengers like sardines they should not get anything.

[Jamie Samans]

Continental is the only U.S. airline that still provides complimentary meals to its Coach-class passengers. You really have no idea what you're talking about.

[justsaynosarahp]

Awwwww poor baybee. only earned 1.9 million for loosing 585 million. nice work if you can get it.

[jdt67]

That poor bastard, how will he survive!?

[1cubfan]

How will he ever be able to pay next months bills?