Reluctant USAir chief could get extra $1.5 million Triple pay for him if there's a merger

October 20, 1995|By Suzanne Wooton | Suzanne Wooton,SUN STAFF

By agreeing to stay on as head of USAir until any merger deal is completed, USAir Chairman Seth E. Schofield would qualify for $1.5 million in salary plus other benefits if the airline is purchased.

According to a proxy statement filed by the company with the Securities and Exchange Commission, Mr. Schofield is entitled to receive three times his $500,000 base salary if control of the Arlington, Va.-based carrier changes.

The provision, adopted in 1989, applies to all company officers and also provides for pension, medical and travel benefits.

Mr. Schofield, 56, announced his plans to retire in early September. Weeks later, after the airline's announcement that it was talking with both American and United Airlines about a merger, Mr. Schofield agreed to a request by the airline's board of directors that he stay. Richard M. Weintraub, a spokesman for the airline, said yesterday that Mr. Schofield had been reluctant to remain and that his decision to do so was "totally unrelated" to any benefits he might realize.

"The board wanted continuity of leadership and asked him to stay on," Mr. Weintraub said.

Mr. Schofield has worked with USAir 38 years, rising through the ranks from a teen-age baggage handler. His decision to retire, announced Sept. 6, was believed to have been prompted partly by frustration about failing to reach a cost-cutting agreement with the airline's unions after nearly 16 months of negotiations.

Mr. Schofield initially said he would remain only until a successor was named, but a month later he agreed to the board's request that he remain until the merger discussions had been concluded or a successor was in place.

United Airlines Chairman Gerald Greenwald met with USAir's labor groups this week and warned them that a takeover by United would mean wage and benefit cuts.

The employee-owned United said the meeting was held because the potential merger of the two employee groups was an important issue in the company's month-long study about whether or not to pursue the acquisition.

Mr. Greenwald told union leaders that the company might be willing to offer board representation or some equity stake in the company in exchange for concessions, according to one union leader.

A takeover of USAir would give United or American Airlines access to USAir's valuable mid-Atlantic and Northeast routes. But industry analysts have cautioned that any purchase of USAir would face significant antitrust and financial hurdles.

Although USAir has now reported two consecutive profitable quarters and expects to earn a profit for 1995, it has lost $3 billion since 1988 and still has the highest costs in the industry.

Also yesterday, the USAir Master Executive Council of the Air Line Pilots Association announced that Vice Chairman Robert P. Gaudioso had been elected to the top spot, replacing Peter J. Gauthier, who resigned.

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