Allegiant, Teamsters fighting over executive pay

David Becker / AP

A Southwest jetliner taxis by parked Allegiant Air jetliners at McCarran International Airport, May 9, 2013.

The Teamsters union, already grappling with Allegiant Air in court over a possible pilots strike, is fighting with the carrier in the boardroom, too.

The union, which owns a miniscule portion of Allegiant’s stock, is pushing back against the Las Vegas-based discount airline’s $8.5 million payout to former president and chief operating officer Andrew Levy following his resignation last fall.

Click to enlarge photo

In this file photo, Andrew Levy, president of Allegiant Air, looks at the D gates at McCarran International Airport. The Las Vegas-based carrier announced Oct. 1, 2014, that Levy has resigned his post.

The Teamsters, who own 24 shares of Allegiant Travel Co. stock in their general fund, are proposing a plan that the airline no longer accelerate stock payments under certain circumstances for senior executives who have quit or been fired.

The plan will be considered at Allegiant’s annual shareholders meeting June 18 at its Summerlin headquarters, according to a regulatory filing today by the airline.

In the filing, the union said it does “not question that some form of severance payment may be appropriate” when a top executive leaves. But it’s concerned that Allegiant “may permit windfall awards that have nothing to do with an executive’s performance.”

Levy’s payout, given “in response to his decision” to quit, “appears inconsistent with a ‘pay for performance’ philosophy worthy of the name,” the union said.

In the filing, Allegiant's board of directors recommended shareholders reject the proposal.

It said Levy’s payout “was warranted under these circumstances” due to his “substantial contributions during more than 13 years in senior management of the company and given the negotiated terms of his employment agreement.”

The Teamsters’ shares give the union a tiny fraction of Allegiant’s ownership — just 0.00014 percent, as Allegiant has 17.1 million shares outstanding.

Allegiant chairman and CEO Maurice “Maury” Gallagher — who once said that unionization “clogs the arteries” — is majority owner. He holds almost 3.7 million shares, giving him a 21 percent stake in the carrier, which flies leisure travelers from small, underserved cities to warm-weather vacation spots with almost no competition on its routes.

In a statement, Teamsters spokeswoman Kara Deniz said the union has more than 100 pension funds with investments “throughout the market,” and that its general fund “has been at the vanguard of advocating for good governance” for two decades.

She said the union has filed similar proposals “aimed at eliminating accelerated-vesting golden-parachute provisions” at several companies, including newspaper publisher Gannett Co.; real estate investment firm Mack-Cali Realty Corp.; freight transportation company Con-way; cemetery and funeral-home operator Service Corporation International; and garbage hauler Waste Management.

Asked if Allegiant thinks the proposal was prompted by the current spat with its pilots, airline spokeswoman Kim Schaefer said her company "can’t speak" to the union's motivations.

This is the first time the Teamsters have made a proposal for an Allegiant shareholders meeting, according to Schaefer.

The union on April 1 called a strike for Allegiant’s more than 500 pilots, members of Teamsters Local 1224. But they never walked off the job because a few hours after the strike was announced, a federal judge issued a temporary restraining order against the union, halting the plans.

A judge is expected to rule in coming weeks whether the aviators can legally go on strike.

Allegiant pilots voted in August 2012 to join the Teamsters but still do not have a collective bargaining agreement under the union.

The airline appeared to score a small victory this week, announcing Tuesday that its flight dispatchers voted for “no representation” by the Teamsters, thus "ending" their representation by the union.

Allegiant said the election wrapped up Tuesday and that it “looks forward to working with the flight dispatchers in a direct relationship with regard to safety, pay and working conditions.”

Allegiant dispatchers had voted 15-5 in December 2012 to join Teamsters Local 986.

But the airline, which did not announce the exact tally of the recent union vote, may not be Teamsters-free just yet with the dispatchers.

Fourteen votes were cast in the election, with seven voting for the Teamsters and seven voting for “no representative,” according to a letter Wednesday from Mary Johnson, general counsel of the National Mediation Board, which oversaw the vote.

The board — an independent U.S. agency that referees labor disputes in the railroad and airline industries — granted the Teamsters’ request, made Wednesday, to delay issuing a decision until May 6 to allow both sides to submit briefs.

The union had until 7 a.m. today to submit one, and Allegiant has until 7 a.m. Friday.

Deniz, who provided a copy of Johnson’s letter to VEGAS INC, did not respond to an email asking if the union had submitted a brief and, if so, if she could supply a copy.

Schaefer, Allegiant's spokeswoman, said it is "not uncommon after any decertification vote for a union to contest the results."

She said that submitting briefs "is a normal part of that process," and that Allegiant is following the board's guidelines for Friday's deadline.

Meanwhile, the 45-year-old Levy appeared a likely successor to 65-year-old Gallagher.

They worked together for 20 years, at Allegiant and other companies. When Allegiant announced Levy’s resignation, Gallagher said they used to run day-to-day operations together at the airline, but that over the past few years, Levy took on more responsibility as Gallagher moved “into background roles.”

Levy booked more than $5 million in total compensation in 2013, by far the most among Allegiant’s top executives that year.

CORRECTION: This story has been updated to reflect a correction issued by Allegiant Travel Co. on May 5. The company said it “erroneously indicated” in the April 30 regulatory filing that the Teamsters' proposal was being made by Amalgamated Bank, record holder of the union's Allegiant stock. | (May 5, 2015)

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