Big bucks for top executives can be a labor relations hot potato. Just ask US Airways Chairman Stephen M. Wolf and CEO Rakesh Gangwal. More than a year ago, at the company’s annual meeting on May 19, 1999, shareholders were expected to approve bonuses worth up to 500 percent of their base salary and that of 31 other top executives. But the airline was facing contract talks with the Association of Flight Attendants. Union officials were red hot that top management could think to so reward themselves while flight attendants were being asked to take a 5 percent pay cut. If Wolf and Gangwal went through with the bonuses, a strike was almost certain.

So in a great example of beau geste, Wolf and Gangwal took themselves off the bonus list, turning down up to $2.32 million and $2.2 million respectively, while other executives did get the gravy. The move bought peace in labor relations and the union signed a contract with the airline some months later. "It was a very positive gesture on their part," says Jeff Zack, a spokesman for the union.

Not to worry, though. Wolf and Gangwal may make out like bandits after all. This spring, US Airways and UAL Group, owner of United Airlines, announced merger plans. One factor helping the merger plan along was the contract settlement with the flight attendants’ union. Merger plans sent stock of US Airways from a low of near $20 per share in March to a high of $43 per share when the merger was announced in late May. Stock in mid-September was around $35 per share. Depending upon how they use their options and how the merger agreement pans out, Wolf could earn $18.3 million and Gangwal $21.8 million. Of course, the controversial merger may not go through, largely because of United Airlines’ big service problems. But Wolf and Gangwal could get a big payoff from what seemed a big loss.