A year after Delta Air Lines disclosed it had spent millions on perks to retain high-level executives during tough times, they keep walking out the door.

Three of five top executives and at least six vice presidents have left Delta or announced departure plans in the past six months, after being showered with hefty bonuses in 2002. Some of the executives also had their pension benefits prepaid into special trust funds that are protected even if the company declares bankruptcy.

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The latest to bail out is finance chief M. Michele Burns, who said Thursday she will leave at the end of the month to take a similar job at Mirant Corp., the Atlanta energy company in Chapter 11 bankruptcy proceedings.

Burns follows Leo Mullin, who stepped down as CEO on Dec. 31, and Fred Reid, his No. 2, who left April 1.

Factors that may be fueling the exodus: Delta's new chief executive, while urging executives to defer a separate set of retention bonuses, said they were entitled to the cash even if they left now. And the lucrative pension trust funds provide for lump-sum payouts so long as executives stayed until Jan. 1 of this year.

No clear No. 2

The departures leave Delta CEO Gerald Grinstein, the 71-year-old board member who replaced Mullin on Jan. 1, increasingly alone atop the company flow chart. There is no clear No. 2 executive or succession plan.

Grinstein issued a statement Thursday that said he will name a chief financial officer to succeed Burns "soon." On Wednesday, speaking with analysts after Delta posted a $383 million first-quarter loss, Grinstein had said he expects to present Delta's board with an executive reorganization plan by the end of the month.

Top-echelon turnover was what Delta executives said they were trying to avoid by enacting a gold-plated plan in 2002 to award annual cash bonuses and set up the pension trusts. In addition, Delta promised retention bonuses aimed at keeping executives on board at least two years.

The airline spent $17.3 million on cash bonuses for about 55 top executives in 2002 and another $44 million on pension trust funds for 35 executives in 2002 and early 2003.

Tying up such cash when Delta was losing huge sums of money, cutting jobs and seeking federal financial assistance outraged many employees, shareholders and customers, and some members of Congress.

Delta sought to quell the controversy by scrapping some of the bonuses and ending payments into the pension trusts.

Now it's wrestling with high turnover in the executive suite.

"They're coming and going like crazy," said Karen Miller, spokeswoman for the Air Line Pilots Association. Burns' departure "again points to the fact that the [pension trusts] were ineffective and ill-conceived," the union official said.

Delta spokesman John Kennedy insisted the retention program had succeeded. "The whole point of that program was to achieve certain [financial] goals and to keep people for two years," he said. "The goals were met."

Delta is losing its finance chief as the airline's losses continue to mount and bond rating agencies have cut its credit ratings.

Credit Suisse airline analyst Jim Higgins put out a note to investors Thursday headlined "Getting Lonely: Another One Bites the Dust." Higgins said he is "quite discouraged by the latest defection" from the troubled airline industry.

"Ms. Burns' departure probably says more about the state of the airline industry than about struggling Delta," he said. "But we nonetheless view it as a blow to that company. We suspect it will be difficult to recruit a replacement from outside the industry and, at this point, have no insight on an internal replacement."

Stock dives 9%

Delta's shares fell more than 9 percent Thursday to $6.98, the largest decline among sagging airline stocks.

Burns, in an interview about her new job at Mirant, refused to discuss her reasons for leaving Delta — or the fallout from the executive pay controversy.

She was paid the third-biggest bonus in 2002 — $846,000 — in addition to her salary of $560,000. She got the same salary and no bonus in 2003.

Delta spent almost $1.9 million in the past two years setting up Burns' pension trust, including almost $846,000 in income taxes triggered by the trust's creation, according to regulatory filings.

Burns was due to receive a $1.35 million retention bonus in January, but she agreed to defer the payments to three equal installments paid on April 2 this year and in 2005 and 2006.

Kennedy, the Delta spokesman, said he could not say how much of the retention bonus Burns will get, or when. Because she is 46 and too young to retire from the company, it's unclear whether she can take her pension trust money immediately.

Mullin is retiring as chairman of the board next month, with a retirement package valued by Delta at $16 million. Delta spent $13.4 million setting up his pension trust, including tax payments. In 2002, he got a $1.4 million bonus.

Reid retired April 1 to head a planned discount carrier that could be a rival to Delta, which spent $3 million on his pension trust. He got a $1.2 million bonus in 2002. Delta has not disclosed a value for Reid's retirement package.

'Nothing to hold them'

Some executive compensation experts said few companies set up the type of pension trusts Delta uses as retention incentives because they're expensive and put the pension assets in the recipients' names, creating little incentive for the employees to stay on board.

"There's no retention piece attached to it as a general rule," said Tom Chisolm, senior managing director of Clark Consulting, an executive compensation firm in Chicago.

"They've got nothing to look forward to," he said, since the Delta executives' yearly bonus plans have been scuttled. "They're already vested, so there's nothing to hold them there."

A week before he succeeded Mullin, Grinstein — who is receiving a $500,000 salary with no bonus — asked most of Delta's executives to defer retention bonus payments scheduled for January "until Delta has been profitable one year or in 2007, whichever comes first," according to a company memo.

However, Grinstein also told executives they would receive the bonuses "should they leave Delta, since the rewards have already been earned."

Mullin and Reid previously had agreed to rescind their retention bonuses. Burns and Delta's two other top executives agreed to take theirs over a three-year period starting this month.