Exec Compensation

[diogenes]

The case has been made on this board that executives are worth the compensation and perks they get.

Are they really?

Let us take the case of US.

Supposedly, the wizardry of mahogany row brought us to this point.

Two BK's. Reducing shareholder value to bupkis. Stiffing vendors. Burdening the taxpayers with pensions.

Now, mahogany row says this was the best that could be done, and we are lucky they did it.

Really?

Two BK's could not be avoided?

If BK could not be avoided, would we not have been cheaper off to make a chimp CEO?

After, all - BK was 'unavoidable.'

Now if that theory baffles you, welcome to my world.

I don't see how they can have it both ways.

If BK was unavoidable, then the Palace was paid way too much to accomplish a fait accompli.

If BK was avoidable, then the Palace was paid way too much for a job they didn't accomplish.

Right?

Not just me that thinks so.

http://slate.msn.com/id/2688/?nav=navoa

 

[jimcfs]

Upon reading the first line of the OP, I wanted to know what stuff you're smoking so I can get some.

However, the post turned into an excellent editorial of the problems of the bonus debates at CCY. Their expoits have not deemed them the bonuses for which they ask. Plain and simple.

 

[StewGuy86]

I can hardly wait to hear how Hawk and The Truth will spin their "yes, we're worth it" responses.

 

[SpinDoc]

Upon reading the first line of the OP, I wanted to know what stuff you're smoking so I can get some.

However, the post turned into an excellent editorial of the problems of the bonus debates at CCY. Their expoits have not deemed them the bonuses for which they ask. Plain and simple.

[post="293817"][/post]​

Please set all emotion aside and ponder this....

The road was rocky and fraught with bad decisions.....
BUT

In the end, the correct decisions were made. The
objective has been met. Welcome to US Airways
operated by America Wesr Holdings, Inc.

That feat, coupled with the ability to raise the
money necessary to complete the merger makes
the executive compensation worth it.

If you disagree, you do not know the basics of
the world of Big Business.

 

[EyeInTheSky]

I can hardly wait to hear how Hawk and The Truth will spin their "yes, we're worth it" responses.

[post="293833"][/post]​

In Hawk's case he's going to be paid in Rupees. Personally, I think he's only worth about 43.640 Rupees a week or about $1.00 U.S. dollar.

 

[diogenes]

Sorry Jim, sometimes it takes me a while to get to the point - it's a Southern thing!

Spin, Ok, help me out.

Do you think, going back to 2000, BK was unavoidable, or avoidable?

Or am I missing an option?

If so, I am prepared to admit my ignorance and be educated.

If not, can you reconcile results with compensation?

In 2000, a merger with HP was not on the horizon.

At that time, was the merger with HP inevitable, or

could other actions (rationalize the fleet, the route structure and fares) have averted BK and the need for a merger?

 

[SpinDoc]

Sorry Jim, sometimes it takes me a while to get to the point - it's a Southern thing!

Spin, Ok, help me out.

Do you think, going back to 2000, BK was unavoidable, or avoidable?

SpinDoc replies:

The company went into BK1 after their plan to
merge with UAL failed. They put all of their eggs
into one basket, and the basket was hand made
by S.J. Wolf. Despite the efforts of one Rakesh
Gangwal to right the ship, the debt was just too
high to overcome industry fundamentals, and
there were banks lined up to force the company into
a reorg to preserve their crack habits.

Or am I missing an option?

SpinDoc replies:

The option was to shrink US to a regional carrier,
but because the unions were unwilling to recognize
the situation, BK1 was initiated to allow the company to
shed unnecessary jobs and debt. The only problem
with BK1, is that the reductions did not go far enough
to lower the debt for future events that were out of US
control, like oil prices and continued erosion of yields by the
low cost carriers. Bad information and projections were
the cause.

If not, can you reconcile results with compensation?

SpinDoc Replies:

Overall results from the past two years are certainly
poor. Management acted in a reactionary way and
did nothing proactive to change the circumstances of
the company. But, you must remember, that shortly
before BK2, they made the initiative to study the
possibility of merging with HP, and when they did,
they were given several directives that had to be
achieved to make a merger plan possible. In order
to achieve these directives, BK2 was initiated.


In 2000, a merger with HP was not on the horizon.
At that time, was the merger with HP inevitable, or
could other actions (rationalize the fleet, the route structure and fares) have averted BK and the need for a merger?

SpinDoc Replies:

No, you are correct that a merger with HP was not in the
works in 2000. US Airways is a unique case study in that
under S.J. Wolf, the company did nothing to strengthen
the bottom line. In fact, they incurred debt up to their
eyeballs to attain a route network and customer base to
appeal to UAL and the Star Alliance. During Wolf's tenure,
the company sold most of their assets and leased them
back, hoping that the UAL merger would absorb most
of the debt, or at least some of it would be paid down
by the new money coming into the merger. After the
deal fell through, US had high costs, ridiculously high
debt, and no prosepect of raising yields to pay for that
debt. In BK2, the company has shed a ton of debt, or
at least renegotiated a large portion of the debt, plus
jettisoned a large amount of high costs (re. senior
IAM, CWA, and ALPA employees through buyouts)
and they met the conditions that HP prescribed for a
merger. In business, this is considered a success.

As duly noted, the executives of US certainly made
a large number of mistakes from 2000-2004, BUT
they made the correct decisions that currently
permit the HP merger. Henceforth, they met the
objective and should be paid accordingly.

 

[X-U]

What of their fiduciary duty to the stockholders? The executives should not be getting paid bonuses while the stockholders are left with worthless paper.

 

[The Truth]

BUT they made the correct decisions that currently
permit the HP merger. Henceforth, they met the
objective and should be paid accordingly.

I concur with your post. The objective was accomplish to ensure that the company survived and the executives did their best to salvage as many jobs possible during the last two BKs.

An executive compensation package is justified because they create a large amount of value for a company. They don’t have the seniority protection of union contracts outlining their salaries. We must remember that the executive compensation package is subject to market forces. The BOD has the interests of its shareholders when they dictate executive salaries. Executive compensation at US Airways is consistently significantly lower than that paid at other major companies in the Virginia area.

No one can really believe that limiting the compensation of a few executives’ holds the key to renewed financial health for a company. It takes extraordinary talent to run a major airline.

These executives have played an important part-along with the employees-in keeping the airline afloat during the last few years. In limiting executive pay, will only make life harder for the airlines by limiting their ability to keep, and attract, talent.

 

[700UW]

That is funny, all executives at US have employment contracts, don't hide that fact.

That is why Siegel walked away with over $7 million.

And if you call declaring war on your employees success then you gues all deserve the top honor for that one.

And remember lead by example, then why did the company seek a 21% paycut for unionized employees while CEO Lakefield too a ZERO% paycut and earned more then Kelliher and Neeleman?

Last time I checked WN and B6 were making money and US is losing money and was in BK for the second time in less then two years.

Try to pull the wool over someone else's eyes to justify your behavior.

:jerry:

 

[SpinDoc]

And if you call declaring war on your employees success then you gues all deserve the top honor for that one.

Bingo. Give the man a cigar. Let me explain this in a
way even YOU can understand.

US Airways had high costs due to an aging workforce
that were paid top of scale wages. Due to the majority
age involved, health care costs were rising. The number
of weeks of vacation were maxed out, and there was
no way to reduce the total overall costs other than
declaring war and finding a way to get the high cost
employees out of the system.

Nothing personal 700, it was all about the bottom line
and how the costs could be reduced. You've been
alive long enough to understand this concept. Now,
accept it like a man.

 

[700UW]

I will not accept corporate thieves who profit out of the employees wallets and layoff thousands and steal pensions while they get richer off the employees hard earned money and benefits.

You can roll over and play dead, I for one won't.

 

[PITbull]

No one can really believe that limiting the compensation of a few executives’ holds the key to renewed financial health for a company. It takes extraordinary talent to run a major airline.

These executives have played an important part-along with the employees-in keeping the airline afloat during the last few years. In limiting executive pay, will only make life harder for the airlines by limiting their ability to keep, and attract, talent.

[post="293900"][/post]​

Truth,

You don't think we buy that Sh$$! The company has limited Labor's pay with 3 concessions. All is relative. All Management did was threaten everyone with liquidation. Way I see it very crystal clearly is LABOR SAVED YOUR JOBS AND THE JOBS IN CCY WITH OUR CONCESSION, and you still couldn't squeek a "break even".

As Senior managment did not feel the pinch, except to tell the wivey that she could have a brand new lexus for xmas....

I know that all of you funded your defined contributions to the max right before BK 2 in September, 2004. B)

Please!!!!!! Take your BS to another forum. :angry:

 

[PITbull]

Spin,

And the stability of the company was achieved where and when exactly with the senior workforce being disrespected and accused of being the demise of the company????

Are you insane?

Let's just clean house across the board and get rid of everyone in every company that has more than 5 years.

HMMM, is that why the disciplines are so strict and move to terminate quickly.

Thanks for the confirmation and validation of what I have been saying for 3 years...company wants the older work force GONE!

Every employee who gets terminated should file EEOC, even before filing for unemployment!!!!

I bet you are for exterminating all human beings beyond the age of 30?

Yea, figured your mentality. :down: Bottom line... accept the insult like a snake.

 

[SpinDoc]

I will not accept corporate thieves who profit out of the employees wallets and layoff thousands and steal pensions while they get richer off the employees hard earned money and benefits.

You can roll over and play dead, I for one won't.

[post="293919"][/post]​

Contrary to popular belief, I have not rolled over
and played dead. I have just recognized the fact
that there are certain realities in the business
world that I cannot change. I have survived the
carnage that has occurred within US Airways
over the past 4 years. There have been several
cuts in my department that could have placed me
squarely in the US Airways Alumni Association,
but I have found ways to make myself important
to the company and survive. I am keenly aware
that my services may not be needed in the
future, and I am counting on that to be true.

This is the difference between someone who
gives all control of their earning and career
potential over to union representation, and
someone like me who controls their own
destiny for the most part. I am not bitter about
the situation that is at hand because I know
I have done everything I could, and if I lose
my job tomorrow, life does not come to a
screeching halt.