Former Atlanta Mayor Shirley Franklin is joining the board of Delta Air Lines, nearly two years after pushing for a lease deal between the city and Delta that some criticized as too favorable to the airline.
Franklin defended her role in renegotiating Delta’s airport lease and said the idea of joining the company’s board only came up recently.
“I had no inclination to believe that I would have another role with Delta at all. We did not have discussions until a few weeks ago,” Franklin said in an interview Thursday, following Delta’s announcement.
Franklin, mayor of Atlanta from 2002 to 2010, joins the board of the Atlanta-based carrier immediately.
“As a former mayor and someone interested in success in industry generally, I am interested in the success of Hartsfield Jackson,” said Franklin, who is chief executive and board chair of Purpose Built Communities Inc., a nonprofit that aims to transform struggling neighborhoods.
Franklin will be an independent director -- a designation for directors who do not have business relationships with the airline -- and will sit on the personnel and compensation committee and audit committee.
Delta directors are paid $40,000 annually, along with about $70,000 in restricted stock annually and reimbursement of expenses for attending meetings. Committee members get an additional $10,000 annually. Board members and their families get travel benefits and Sky Club privileges.
Delta cited Franklin’s leadership experience and knowledge of the region’s and nation’s economy in adding her to the board.
Delta Chief Executive Richard Anderson praised Franklin while in lease negotiations with the city late in Franklin’s term as mayor. Airport chief Ben DeCosta was pushing for a deal that would bring more revenue.
In January of 2009, Anderson told employees, “Delta and the other carriers are opposed to the airport management’s plans because the airport costs would make the airport less competitive.... The fortunate thing is the mayor is ultimately over the airport management . . . ”
When the Federal Aviation Administration and DeCosta said provisions in the deal negotiated by the city with Delta could limit competition at Hartsfield-Jackson, Franklin defended the lease. Franklin and others were eager to get the deal signed before she left office. They argued it was crucial to keeping construction of a new international terminal on track by assuring a stable revenue stream to help secure bond financing.
The city adjusted the lease to address the FAA’s concerns.
The deal ultimately passed on a 15-0 city council vote in November 2009. Franklin left office two months later and successor Kasim Reed did not extend DeCosta’s contract as airport chief.
Last year, as the airport faced the need for job cuts and parking rate increases, some city council members and others criticized the Delta lease. City officials estimated the lease would cost the airport $17 million a year in revenue.
Council member Felicia Moore said some of the airport’s budget problems at the time were a result of the lease.
Last August, Reed announced a deal that called for Delta and other airlines to make $30 million in extra rent payments to help the city get bond financing for the new terminal. The airport later in the decade might refund the payments, depending on the economy and other factors.
Two council members who questioned the original Delta lease on Thursday stopped short of criticizing Franklin or questioning her appointment at Delta.
“I think financially we as a city were just giving up too much and unfortunately it put the city in a bad place financially,” council member H. Lamar Willis said. “I wouldn’t fault anybody... The economy seemed to be in a different place, and then worsened.”
Moore said that although she “wasn’t extremely happy” with some of the terms, Franklin “seemed to be fair handed” in the Delta negotiations.
At the time, Delta was coming off a merger with Northwest Airlines and said if costs rose in Atlanta it might move growth to other hubs. Franklin said the deal prevented that and also included provisions to ensure Delta kept its headquarters and a large number of flights in Atlanta.
Council member Howard Shook said Thursday he felt the Franklin administration “was being conservative and would rather meet Delta more than halfway, rather than be the administration that lost Delta.”
In any case, Franklin isn’t the first major political figure to land on Delta’s board. Andrew Young was on the board for a decade after his mayorship, and former Georgia Gov. George Busbee also was on the board into the 1990s. Corporations often include a hometown luminary or two among outside directors.
Young said Thursday it was “a fair question” to ask whether a former mayor should join a corporate board, but he said every situation has to be viewed in context.
“Her job was to make the airport run and to keep our largest customer in it,” Young said.
Politicians on corporate boards “bring different skills and experiences,” said Paul Lapides, director of the Corporate Governance Center at Kennesaw State University. He also noted companies are keen to have diversity among board members, and Franklin becomes one of two women and the only African American on Delta’s.
Delta’s corporate governance committee recommends nominees for the board, uses a search firm and takes potential nominations from stockholders. Lapides said working relationships are a common way for directors to get on boards.
When Delta worked with Franklin, he said, some senior executives in the company “may have said, ‘This is a really smart person, we need a person like this on the board.’”
In addition to her new seat on Delta’s board, ex-Mayor Shirley Franklin is:
-- Chief executive and chair of the board of Purpose Built Communities Inc., a national nonprofit organization aimed at transforming struggling neighborhoods.
-- On the board of Mueller Water Products.
-- A director of the United Nations Institute for Training and Research, co-chair of the Atlanta Regional Commission on Homelessness and co-chair of the board of directors of the National Center for Civil and Human Rights.
The former mayor also has a political blog called "Blogging While Blue."
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