Mesa Asks for Employee Wage Cuts

 - January 9, 2008, 4:46 AM

Phoenix-based Mesa Air Group has asked its employees to accept a voluntary 5-percent pay cut for one year in return for an incentive program tied to quarterly profits. The appeal coincided with 20-percent salary reductions for chairman and CEO Jonathan Ornstein, president Mike Lotz and executive vice president Peter Murnane. According to SEC filings, the three top executives’ base pay equals $200,000, $175,000 and $150,000, respectively. Mesa has also instituted a one-year salary freeze for all other management.

Under the voluntary pay reduction, employees would receive the full amount of their pay reduction, plus an equal amount as a bonus, during each quarter the company registers an operating profit. A similar program started by Mesa following 9/11 paid employee bonuses in each of its four quarters and resulted in a 7.5-percent net pay increase to participating employees.

The move follows a reported loss of $9.3 million during Mesa’s fiscal year ending September 30. Last year the airline lost $48 million.