DWC CAP10 USAF

DL guy.....from DALPA Contract Admin:

"Profit Sharing Payout Calculations

The Profit Sharing Plan is based upon the Company’s “Pre-tax income” (PTIX) for the calendar year. For the Profit Sharing Plan, PWA Section 2 A. 216. further defines PTIX as:

For any calendar year, the Company’s consolidated pre-tax income calculated in accordance with Generally Accepted Accounting Principles in the United States and as reported in the Company’s public securities filings but excluding:

a. all asset write downs related to long-term assets,
b. gains or losses with respect to employee equity securities,
c. gains or losses with respect to extraordinary, one-time or non-recurringevents, and d. expense accrued with respect to the profit sharing plan.

The Profit Sharing Plan uses pre-tax income as a trigger for determining payouts. It restricts the write-offs that might otherwise reduce the PTIX metric resulting in a “clean,” not easily manipulated, dollar value from which to determine profit sharing payouts. Also, because the cost of the Profit Sharing Plan itself and other incentive plans are added back when calculating PTIX, the formula provides a higher level of PTIX than most profit sharing formulas at other carriers.

To ensure transparency within the Company accounting process regarding profit sharing, the PWA puts in place a “trust but verify” process. A review of Delta’s business plan, performance, earnings and expenditures is made available to ALPA at regular intervals.

ALPA reviews the methodology and calculation of employee awards with the Company prior to such awards.

Total Employee Payout Calculation

Profit sharing begins at the first dollar of PTIX. The total amount of profit sharing paid out to all pilots is based upon the total PTIX for the year. The total pilot profit sharing is paid at 10 percent of the first $2.5 billion of PTIX for the year and 20 percent of any PTIX for the year over $2.5 billion.

Individual Pilot Payout Calculation and Award

To determine your individual profit sharing payout, you need to know your annual compensation in the year in which the PTIX was earned, the total annual compensation for that year for all eligible employees, and the total profit sharing amount. You then divide your eligible annual compensation by the eligible annual compensation of all profit sharing participants and then multiply that amount by the total profit sharing amount available. The resultis your individual profit sharing amount. Every pilot will receive a pro rata amount of the total profit sharing based on his or her annual compensation in theyear PTIX was earned.

Here’s an example:
Assume Delta earned a PTIX of $1.5 billion. Delta would provide eligible employees a total profit sharing of $150 million ($1.5 B x 10% = $150 million). Also, assume that the total annual compensation for all eligible employees was $3.75 billion and that the pilot’s individual annual compensation was $100,000. To determine the percentage of profit sharing for this pilot, divide the pilot’s individual annual compensation by the total annual compensation ($100,000 / $3.75B = .00002666667). To determine the pilot’s personal profit sharing payout. Multiply this number by the total profit sharing amount (.00002666667 x $150 million = $4,000)."

No where in there does it say Delta figures out what the pilot 16% DC is going to cost and bakes that into our cut of the PS pool.

hockeypilot44

Maybe. All the employees at Delta get the same profit sharing percentage. The pilots also get 16 percent DC while the other employees are getting 0 DC I believe.

ugleeual

I’d be very surprised if profit sharing makes new contract

jerryleber

It will make it. The only question is if we are smart enough to demand the Delta formula and including it in the compensation for BC plan calculation.

Where Delta's contractual language is similar and superior to ours we need to take advantage of that and either match or exceed the values in their TA. We will have plenty of more complicated issues like scheduling, sick leave and LTD/STD to reinvent the wheel with apple to oranges comparisons.

ninerdriver

Yeah, let's definitely give up stuff in this environment.

RaginCajun

Anyone see the summary sheet from the reps yet? Very interesting stuff on what the ask is. I'm surprised and actually impressed.

ThumbsUp

I’m surprised you could see it! They like to keep the proletariat in ignorance.

Swakid8

Where can you see that?

horrido27

This is not directed to only Sunvox or SalingFun.. but they seem pretty knowledgeable of our/their respective PS.

So, a couple of simple questions-

IF both companies reported 5Billion in Profit for FY23 (NOTHING to do with Delta's current TA, or our potential TA).
1) What would the PS be for their respective pilot groups? Ie.. how much in the pilot pot?
b) based on that amount, and the number of eligible pilots.. what would be the "expected" PS Percentage.

2) IF two pilots both made 200k in FY22. Based on what I (and others are reading-)
The UAL pilot would be getting 200ooo x .016787= $3357.40 as Profit sharing
The Delta pilot would be getting 200ooo x .05023= $10046.
However, (and correct me if I am wrong)- $10046 x 16% BFund = another $1607.36 for a total of $11653.36.

THAT is a significant difference.
If it all comes down to a few words, ie- Pretax PROFIT up to/over $2.5B vs. Pretax PROFIT up to/over 6.9% margin
A set amount vs a set percentage.

Back to another question-
Two pilots will be getting 1.6787% PS for their FY22 amount.
UAL pilot to get $3357.40
Delta pilot to get $3357.40 + $537.18 BFund = $3894.58

If the above is correct, we (UAL Pilot Group) can not say [With a Straight Face] that our two plans are essentially the same.

And there is nothing wrong with plans being different.. but lets just acknowledge it.
We can argue the value of PS and IF it should or shouldn't be in a UPA/PWA. It seems some pilot groups are going away from it while others are making it more solid.
Personally I like the idea of being rewarded in making our company profitable. Just always felt that a BFund contribution should also be included.
BTW- on our PS page it mentioned that the amount to be distributed to eligible employees is nearly $133million. I was alittle surprised by that low amount. Expected almost double that.

Motch

ThumbsUp

It's less about the 6.9 vs 2.5B. Delta is just more profitable and has consistently been over the last decade. If we wanted to be on parity you would have to address the 10/20% and make those numbers higher.