The chief executive of Northwest Airlines is giving back a $750,000 bonus he got for his work on a financial restructuring that kept the airline out of bankruptcy.
In a letter to the airline's board of directors on Sunday, John Dasburg said he was concerned that the payment would have impaired employee trust in his leadership.
Employees took pay and benefit cuts in exchange for stock in the company as part of the restructuring. The airline also negotiated easier loan terms from its banks.
"We should not put at risk all we have achieved up to now as a result of any misunderstanding on the part of Northwest employees of the board's or my motivations," Dasburg wrote in returning the bonus.
In a federal filing last week in connection with a pending stock offering, the airline disclosed that Dasburg got the bonus on top of a salary of $463,906 and a performance bonus of $450,705, bringing total 1993 cash compensation to $1.66-million.
Northwest said last week that the payment was based on Dasburg's work over the past two years to delay maturities on $1.8-billion in bank debt, cancel and delay aircraft purchases, negotiate dividend cuts with holders of preferred stock and achieve the wage concessions of $886-million over three years with several unions.
Union leaders praised Dasburg for his decision.
Tom Pedersen, president of Local 143 of the Machinists' union, had demanded that Dasburg return the bonus. He said that returning it is "a statement to management that we are players in this company for the long haul."