Delta's Grinstein on Exiting Bankruptcy
A: Some people declined. But my batting average is pretty good.
Q: Delta offered incentive packages to a much broader range of employees than you usually see in companies coming out of bankruptcy, like United Airlines, for example. Why?
A: Management got some incentives coming out, but we also wanted to align management's incentives with those of the frontline employees. It's important to align their share in profits and their reward for meeting performance goals. Going into Chapter 11, there is a huge sense of failure, especially for people with great pride. It is a failure. There's no way to blink at that. A business like ours is so dependent on the morale of people to make sure the flights are on time, the baggage doesn't get lost, that we are handling people well. It's all about keeping morale up. You've got to convince the employees as well as the creditors that we have a plan, it's going to work, and you're going to share the rewards.
Q: Other companies in bankruptcy, like United, have argued the only way to get the best talent to lead them out of bankruptcy is to pay a lot–and guarantee it, regardless of company performance.
A: Well, there has to be restraint on the part of management. Everybody has made sacrifices, and incentives for management can't sound excessive. They have to be broadly shared.
Q: You've said you intend to step down now that Delta has emerged. When do you expect the board to decide on a new CEO?
A: Probably this summer.
Q: So have you thought about starting a fresh career as a turnaround specialist?
A: I think this is the bloody end. I'll be 75 in June, and the spurs are hung up. I'm not jumping on any more horses.
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