In the latest CEO hot-seat interview, NBC’s Meredith Vieira asked Northwest CEO Douglas Steenland to guarantee that nothing would ever mess with his airline’s flights again.
“Do you fly to San Francisco by any chance?” the host of NBC’s “Today” show asked on the August 15 program. “OK, I have to go out there, are you going to promise me, guarantee me, that if I buy a ticket at the end of August you won’t cancel that flight?”
Vieira phrased the outrageous question as though it was Steenland’s fault that a high number of flights had been cancelled earlier in the summer. In addition to the usual weather and mechanical problems airlines face, however, Air Traffic Control has faced “gridlock” conditions this summer, according to The Wall Street Journal.
One of the main reasons for so many cancellations was, according to Steenland, “this year was really a transition year for us. The economic signs were positive so we grew the airline by almost 4 percent. This was the first summer that we were implementing some new work rules. They didn’t quite work the way we were expecting …”
Vieira cut off Steenland: “They were sort of a failure, right?”
Vieira spent almost the entire five-and-a-half-minute interview criticizing Steenland.
“I don’t doubt your sincerity,” she said, “but do you understand … um … some of the anger that’s been directed at you? I mean these pilots, for example flight attendants, they took pay cuts, to help save this airline at the same time you were given almost $27 million in stock and stock options.”
Steenland corrected her, reminding her that stock gains depend on how the company does in the next few years – he wasn’t “given” $27 million.
“First, Meredith, that number is simply wrong,” he said. “In 2006 I received a fraction of that number in terms of what my compensation was. I’ve taken a 20-percent reduction in base salary, and I voluntarily didn’t accept incentive payments that were due to me. If you look at my compensation compared to other Fortune 500 CEOs, I’m in the bottom 10 percent. I did get a stock grant – it’s going to be four years before we know if I realize all of it, and it’s entirely based on what the value of the company is. There are no guarantees involved.”
According to USA Today, while Northwest comes out of its restructuring process, “Steenland could get stock and stock options worth $27 million over the next four years under its re-organization plan.” Of course that depends on how well the company does. According to the Minneapolis Star Tribune, Steenland made $1.88 million last year, putting him 38th among CEOs just in the state of Minnesota.