Monday, October 17, 2005

Delphi Corp. executive pay slashed

CEO Miller reduces his salary to $1 per year amid criticism over proposed wage cuts.

By Brett Clanton The Detroit News

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DETROIT -- Delphi Corp. Chairman and CEO Robert S. "Steve" Miller will reduce his salary to $1 per year and other executives will take pay cuts until the bankrupt auto supplier emerges from Chapter 11, the company said today.

The moves come amid intense criticism that Delphi is enriching executives at a time when it is demanding drastic pay and benefit cuts from its blue-collar workers.

In addition to giving up his $1.5 million annual salary, Miller said Delphi officers who were with the company when he took over in July have volunteered to give up 10 percent of their base pay. President and Chief Operating Officer Rodney O'Neal will waive 20 percent of his salary.

All salary changes will be effective Jan 1, 2006, but are still subject to court approval.

"While I remain concerned about the below-market compensation paid to many of our key executives, Delphi's transformation message must be unambiguous and marked indelibly by the commitment of Delphi's leadership," Miller said in a statement.

The voluntary pay cuts should be "a clear indication of their commitment," he said.

Delphi, the nation's largest auto parts supplier, filed for bankruptcy protection on Oct. 8 in New York. Shortly before the filing, the Troy-based company requested generous severance packages for 21 top executives that would extend 18 months if they were released. Then, with the filing, Delphi asked the courts to approve bonuses for hundreds of executives if the company successfully emerged from bankruptcy.

United Auto Workers President called the moves a "disgusting" spectacle of corporate greed and said he will challenge the executive compensation programs in court.

The UAW, which represents 24,000 of the supplier's 34,000 U.S. hourly workers, is being asked to accept dramatic cuts as part of the company's reorganization. In proposals this week, the supplier is expected to push its unions for 60 percent pay cuts, elimination of retiree benefits and the right to close or sell a "substantial portion" of its 44 U.S. plants.

The unions have until mid December to accept a cost-cutting agreement or face a possible rejection of their labor contracts.

Delphi said other compensation arrangements for its executives would be decided by the bankruptcy court at a Nov. 29 hearing.

Bargainers for General Motors Corp. and the United Auto Workers continued talks Sunday in hopes of reaching an eleventh-hour deal to lower the troubled automaker's health care costs ahead of a quarterly earning report today.

Also today, Delphi Corp. plans to hold a 9 a.m. conference call in New York, where company officials are expected to announce changes to a controversial executive compensation program that has drawn fierce criticism from UAW President Ron Gettelfinger and Gov. Jennifer Granholm, among others.

Days before filing for bankruptcy on Oct. 8, the parts giant revised a severance program that would pay its top 21 executives 18 months of salary -- up from a maximum of 12 months -- if they lose their jobs because of restructuring or termination. If they do not lose their jobs, they would receive nothing beyond their normal pay.

You can reach Brett Clanton at (313) 222-2612 or bclanton@detnews.com.