WASHINGTON -- So how much does the Big Guy make? You'd expect the chief executive officers of major airlines to be pretty high up there, along with the top guys at some of the brand-name hotel and Internet companies, but how high is high?

To shed some light on the question, Travel Weekly commissioned a survey of executive compensation for the chief executive officers of some of the industry's better-known public companies.

Top Five Data Services, a compensation consulting firm in Fremont, Calif., compiled the data and reported that Continental chairman Gordon Bethune was, by far, the industry's highest paid CEO among the companies surveyed, with a 1999 salary and bonus exceeding $7 million.

Bethune's compensation last year was an anomaly, in that it included a retention bonus voted by the Continental board in 1998 for all the company's top officers, following Northwest's acquisition of a major stake in the airline.

Without the $6 million in bonuses, Bethune's compensation would have been more than $860,000, still the highest base salary among major airlines' top officials.

Overall, the highest base salary among the airline, cruise and hotel companies surveyed was the $1 million paid to Starwood chief Barry Sternlicht.

Top Five president Jay Edelman said, "Our review did not really surprise us or reveal pay practices that were significantly divergent from other industries we have studied."

Chief executives at this level often receive performance or other bonuses that can double or triple the base salary, and bonuses were hefty at 10 of the 13 travel and hospitality companies surveyed by Top Five.

Edelman said, "Profitable companies in all industries are routinely paying bonuses exceeding 100% of base salary, presumably for above-target performance.

"And all of this is occurring while total direct compensation (which includes stock-based incentives) is reaching levels unimaginable 10 years ago."

With bonuses included, Sternlicht's total cash compensation came to more than $2.2 million, second-highest in the group behind Bethune.

In percentage terms, Carnival chief Micky Arison received the second-largest bonus after Bethune, measured at 299.4% of the base salary.

These totals exclude stock options and various deferred benefits.

In one odd twist of fate, the chief executives of the two largest airlines, United and American, received base compensation only slightly above the average for the group, with no bonus. Both are relatively new on the job.

Donald Carty became chairman and CEO in mid-1998, and James Goodwin assumed those titles at UAL in mid-1999.

The only other airline CEO in the group with no bonus last year was TWA chief William Compton, who was appointed to the position in midyear.

Edelman noted that "five out of the 13 companies in this group had a new CEO within the past two years. That's over one-third.

"It's not easy to replace executives at that level, particularly in the overheated employment environment we're in. Considering the disruptions and costs associated with replacing an exec at that level, most companies (and stockholders) are content to pay what look like fairly rich pay packages, as long as results (e.g. the stock price) hold up."

Top Five compiled the data from public documents filed by publicly traded U.S. corporations. This explains the absence of some prominent foreign and/or closely held corporations such as Royal Caribbean, NCL and Hyatt.

Pay scales at the top.


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