United’s Kirby And Hart Taking Lower Salary Than Predecessors

This week, Scott Kirby became United Airlines’ CEO and Brett J. Hart was promoted to president. With these new positions, the two businessmen have waived their salaries until the end of the year to help their company save money amid the impact of the global health crisis. Moreover, their standard base salaries are also lower than their predecessors.

United plane runway getty images
United’s new leadership will be paid less this year. Photo: Getty Images

Large sacrifices

According to a United States Securities and Exchange Commission document, both Kirby Hart are looking to lead the firm by example. As former president, Kirby already waived 100 percent of his base salary from March 10, 2020, through the end of the year. However, this sacrifice will continue even with his new role.

Additionally, Hart waived 50 percent of his base salary when he was the Chicago-based airline’s executive vice president and chief administrative officer. Now, with his promotion, he has waived 100 percent of his base salary for the remainder of 2020.

With his former positions not being taken on by another professional, Hart will be busy as ever while he helps the operator tackle the impact of the coronavirus pandemic. He will be taking on this extra responsibility while not taking a base salary.

United airlines aircraft parked
Most of the airline’s aircraft remain on the ground. Photo: Getty Images

Less pay

Kirby officially has an annual base salary of $1,000,000 and a target annual incentive program (AIP) opportunity equal to 250 percent of this number. According to Chicago Business, his predecessor Oscar Munoz took in a salary of $1.25 million last year.

Furthermore, Hart has an annual base salary of $775,000. This figure has not changed from his previous role. He also has a target AIP opportunity equal to 175 percent of his salary. According to Salary.com, Kirby was paid a salary of $875,000 as president in 2018.

Moreover, United believes it is doubtful that its AIP awards will pay out for 2020. The main reason for this is that the design of this program requires the business to have a profit to satisfy the minimum annual payment criteria. Therefore, the two will lose out on more cash this year.

United explains this situation in the document:

“Kirby and Hart may not realize the full value of their respective compensation packages during any period in which those limitations apply. The Company will continue to monitor and administer its executive compensation programs to be in compliance with the PSP Agreement limitations.”

United Airlines
United has still been performing cargo flights and select services during the outbreak. Photo: Getty Images

A lot at stake

Former CEO Oscar Munoz also sacrificed his base salary earlier this year. United has not sugar-coated the impact that the pandemic has on the aviation industry. It has been clear that substantial cuts may be needed for the company to survive the downturn in passenger activity.

It has been placing measures to limit the damage and is glad to receive government support to help pay wages. However, it has warned that many jobs could be lost this fall if the climate does not change. Therefore, any money saved will go a long way for the company.

Simple Flying reached out to United for comment on the salaries of Kirby and Hart. We will update the article with any further announcements.

What are your thoughts on United’s leadership, sacrificing their base salaries during the current conditions? Let us know what you think of the situation in the comment section.