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Continental Airlines Board Cuts Pay

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Continental Airlines’ board of directors has agreed to reduce its pay to aid the airline’s effort to cut costs.

Continental Airlines has issued the following bulletin to its employees to update them on the latest steps in the company’s cost reduction efforts:

Continental today announced that its board of directors has agreed to cut its compensation and forego its entire 2005 stock option grant.

The board will reduce its base retainer fee and meeting fees by 30 percent, effective Feb. 28, 2005. Due to the increased oversight responsibilities caused by the Sarbanes-Oxley act, the board did not decrease the audit committee’s retainer or meeting fees.

“Our board took this action in recognition of the sacrifice our co-workers are being asked to make to help assure the survival of our airline,” said Larry Kellner, Chairman and CEO. “We appreciate their efforts to work together toward our goal of cutting $500 million out of our pay and benefit costs.”

As previously announced on Nov. 18, Continental needs an annual $500 million reduction in pay and benefit costs. Continental plans to implement the reduction on Feb. 28, 2005. Continental’s financial plan shows Continental losing hundreds of millions of dollars this year, and the airline cannot sustain these losses.

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Continental Airlines Board Cuts Pay
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