By David Milstead, Rocky Mountain News
February 3, 2007

United Airlines' top executives are selling their stock nearly as fast as they can.

CEO Glenn Tilton and others received hefty packages of restricted shares and options when the carrier emerged from bankruptcy a year ago. United designed the stock awards to motivate the executives to stay: Only one-fifth of the shares could be sold before the first anniversary of the carrier's return to the stock exchanges.

But Tilton and his crew have been aggressive at selling that one-fifth.

The CEO has used all 164,400 stock options available to him and sold 87 percent of the restricted shares that "vested," or became available to sell. All told, Tilton has made $4.38 million in stock sales and option profits.

All told, seven top United executives have made $11.6 million on their shares.

"All of our officers are vested in the future of our company," said Jean Medina, a spokeswoman for United, noting that the executives are required to hold at least 25 percent of their restricted stock while working at the company.

United said some executives sold a portion of the stock to cover tax liabilities incurred when the shares vested.

When United was in Chapter 11 bankruptcy, it was unable to use stock awards to compensate its executives because its shares were headed for cancellation.

Once the airline exited bankruptcy in early 2006, with new shares issued, United gave 1.6 million restricted shares and 2.5 million stock options to eight top executives. That represented more than $200 million in compensation, assuming the executives held their options for the full 10-year terms and United stock increased 10 percent per year.

But United's executives aren't waiting for the expiration of their options in 2016. Another round of selling may be beginning - another 765,000 shares and options vested Thursday, and the executives can begin selling anytime.

"When insiders are restricted from selling stock, and the floodgates open up, they tend to make up for lost time," said David Coleman, editor of the Vickers Weekly Insider Report, a newsletter that tracks executive selling.

"Selling into strength is not unusual, but generally I'd consider it a bearish sign," he said. "I don't like to see a big increase in insider selling when the stock is going up."

Executives' stock sale results

Sale results from the top executives who received stock awards in February 2006. The first number is dollars - gross sales of shares plus option profits. The second number is the percentage of available shares they've sold. Only about 20 percent of their options and restricted shares vested on Aug. 1, and the selling started right after.

• Glenn F. Tilton, chairman, president and chief executive officer, $4.38 million/95 percent

• John P. Tague, executive vice president and chief revenue officer, $1.65 million/70 percent

• Frederic F. "Jake" Brace, executive vice president and chief financial officer, $1.08 million/34 percent

• Peter D. McDonald, executive vice president and chief operating officer, $2.02 million/100 percent

• Sara A. Fields, senior vice president - office of the chairman, $1.03 million/100 percent

• Paul R. Lovejoy, senior vice president, general counsel and secretary, $478,93 3/30 percent

• Rosemary Moore, senior vice president - corporate and government affairs, $979,26 2/100 percent

• Richard J. Poulton, senior vice president - business development, none/resigned