Delta Airlines CEO Gerald (Jerry) Grinstein of Delta announced on Tuesday that when Delta emerges from its wrenching bankruptcy period, he will forgo all additional compensation or payouts beyond his normal salary (approximately $330,000/year, a pittance for a Fortune 500 CEO).
"Instead, Delta's plan calls for the distribution of an estimated $995 million and about 39,000 nonunionized employees and 1,000 managers within 12 to 14 months of the company's exit from bankruptcy proceedings." -- Wall Street Journal
Typically, bankruptcy plans provide a considerable compensation for the CEO senior leadership, ostensibly to keep them motivated to see it through during difficult times. This plunder is, in part, what attracts many leadership "superstars" (at least on paper) to the turnaround world, but it seems wrong to me -- particularly unfair to the firm's employees and investors who've suffered even more. Regardless, because it's common practice, my guess is the press and most investors probably would have shrugged their shoulders if he and the board carved a multi-million dollar package and doled it out in the spring when they emerge from bankruptcy.
But that wasn't something Jerry wanted. Delta, like all other major US carriers, had wrung some hard-fought concessions from pilot, flight attendant and mechanic unions. They also fought off hostile acquisitions from US Air, and wrestled with major increases in fuel cost, not to mention the security fallout from 9/11. I guess Jerry just didn't find it right for him to benefit beyond the emotional payoff of a job well done. I wholeheartedly applaud him, and agree.
There's a personal angle to this story beyond just Jerry as a role model for nobility in business. I had the great pleasure of having Jerry Grinstein on my board of directors at VacationSpot.com. He came to us as representative of Madrona Venture Group, the first venture firm to invest in VacationSpot.com, and served a little more than a year. I was constantly impressed by his wisdom and integrity, which is especially evident because of the context in which he served (the go-go-Internet year of 1999). I remember him as the kind of guy that listens 99% of the time, speaks less than 1% of the time, and you'll always learn something important and new with that 1%; it's always pithy and well-considered. In one offline exchange, I remember Jerry being openly critical of various revenue swap schemes going on at various Internet firms like AOL more than a year before they were broadly considered sketchy.
If there were annual awards for nobility in business (and why aren't there?) I'd nominate Gerald Grinstein for this year's award.