A retired Delta Air Lines pilot has submitted a shareholder proposal asking the company's board to stop paying bonuses to executives unless it funds retired pilots' pensions.
Atlanta-based Delta plans to block the proposal from going up for a shareholder vote, unless U.S. Securities and Exchange Commission staff says otherwise.
Delta terminated its pilot pension plan while in bankruptcy through a deal in 2006 with the Pension Benefit Guaranty Corp., the quasi-government federal agency that insures pension plans up to certain limits. The move reduced pension benefits for many retired pilots.
The retired pilot who filed the shareholder proposal Jan. 9, Kenneth Wendell Lewis, noted that he is a shareholder and proposed that the board prohibit cash or stock bonus payments to management or executive officers unless there is a process to fund retirement accounts for pilots who retired before Dec. 13, 2007.
But Delta wrote in a letter to the SEC's division of corporation finance that it believes it can exclude the item from its proxy for shareholder voting because the proposal relates to the company's ordinary business operations and because it is "designed to further a personal interest." The company also said a letter Lewis submitted on his shareholder status did not meet requirements under a federal rule.
Lewis declined to comment on his filing, pending a response from the SEC staff. He is also vice chairman of the Delta Pilots Pension Preservation Organization, but submitted the proposal independently.
The retired pilots group filed an administrative appeal last year over the lost pension benefits and is awaiting a decision from the PBGC.
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