Delta Air Lines: Pay announcement makes national headlines
OREANDA-NEWS. September 18, 2015. From Atlanta to Seattle and Miami to New York, dozens of news organizations shared the news of Delta’s announcement Wednesday that it would invest more in employee pay and benefits.
The Seattle Times, whose home city hosts a growing Delta hub, called the package “hefty.” The Minneapolis Star-Tribune wrote that the compensation plan “stands out both for its size and for appearing to be a break in the wage stagnation that persisted in the U.S. economy.”
The Star-Tribune, like many news outlets, noted the number of local employees likely to benefit: about 6,000 in that area. Delta's second-largest hub is in Minneapolis-St. Paul.
The hometown Atlanta Business Chronicle cheekily noted, “Last week, Delta employees were told they will get their own ‘SkySpa.’ Now, they're getting a nice pay raise.”
Delta announced Wednesday it is increasing most employees’ base pay by 14.5 percent while continuing to offer a generous profit sharing plan. The company also is increasing its 401(k) dollar-for-dollar match from 5 to 6 percent.
In a memo to employees, CEO Richard Anderson and President Ed Bastian said, “When combined with the April (annual pay) increases, pay rates for most employees will be up 18 percent or more in 2015, providing you with record pay raises in a year of record profits. Few companies can match that.”
Meanwhile, over the past two years Delta has returned over \\$3 billion to shareholders and has reduced its debt by \\$10 billion while continuing to invest in aircraft, the onboard customer experience and upgrading facilities worldwide.
Here’s what Delta shared with employees:
1. Delta is responding to employee feedback by putting more money in base pay.
Base pay rates will increase by 14.5 percent for all eligible merit, ground and flight attendant employees around the world on Dec. 1. When combined with the April increases, pay rates for most employees will be up 18 percent or more in 2015, providing record pay raises in a year of record profits.
2. Profit sharing is here to stay.
The new profit sharing formula, for payouts in 2017 and beyond, shares 10 percent of profits until the airline matches its prior-year profitability and then pays 20 percent of profits, with no limit.
3. Delta increases match on 401(k).
Delta will match employees’ 401(k) contributions up to 6 percent of pay starting Jan. 1. With automatic and matching contributions from the airline, which together can equal up to 8 percent of employee earnings, the total will add up to 14 percent of an employee’s earnings.
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