Also, the company's stock plunged as it lost money. After trading near $80 a share in early 1998, its shares fell as low as $17.4375 in March - about a 75 percent drop. Those losses helped eviscerate the airline's largest stockholder, the Tiger Management hedge fund managed by renowned investor Julian H. Robertson Jr.
2015 Pilot Discussion.
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But no matter how battered their reputations may be, they still appear determined to rescue themselves instead of their sinking ships. For today's captains of industry, the maxim in a crisis seems to be: "To hell with the women and children -- save the lifeboats for us!"
Take American Airlines. While preparing to make a rough landing in bankruptcy court, executives at the dead broke carrier extracted from workers $1.62 billion in wage and benefit concessions the bosses claimed were needed to keep American aloft. At the same time, the execs secretly safeguarded themselves with a glittering array of golden parachutes, including massive cash bonuses and a $41-million trust fund to guarantee their pensions should the airline crash and burn.
Even after the secret escape plan was revealed and all hell broke loose, the company held fast to its priorities. It canceled the cash bonuses. It tossed CEO Don Carty onto the tarmac. But it refused to relinquish the fund protecting its execs' nest eggs.
In the end, the executives kept their cushy trust fund while the workers were forced to go along with a deal that will lead to thousands of lay-offs and pay cuts of between 15 and 21 percent. I guess in today's business world, that's what amounts to a compromise.
Besides making one reach for the nearest airsickness bag, the American Airlines debacle highlights the growing disparity between the ways corporate America is preparing for the golden years of its executives and its rank and file employees.
In the clubby confines of America's boardrooms, the sky is the limit. Compensation committees are working overtime coming up with ever more creative -- and devious -- ways to boost the earnings of top executives. And super-charged pension plans are the hot new trend.
Among the gimmicks being used to goose the value of these plans is an accounting scheme that can dramatically increase a CEO's retirement windfall by adding phantom years -- even phantom decades -- of service to the exec's pension. In theory, it works the same way as those jailhouse rules that reward a model prisoner with time off for good behavior -- only these guys get rewarded no matter how many employees or shareholders they've knifed in the back with a homemade shiv.
Thanks to this latest innovation in corporate accounting, Leo Mullin, Delta Airlines' CEO, has had an additional 22 years of service tacked on to the less than six years he's actually worked for the company, while US Air's former CEO Stephen Wolf was given credit for 24 years he didn't really put in. And this scam isn't reserved for the high-flyers of the airline industry. When John Snow left CSX Railroad to become Treasury Secretary, he was given credit for having put in 44 years at the firm, even though he'd actually punched a time clock there for 25 -- a little fun with numbers that helped him walk away with a cool $33 million in pension booty.
Corporate directors, who have come under increasing fire from shareholders for approving excessive pay packages for high-level executives, appreciate the fact that these pension plan adjustments allow them to fly under the radar while continuing to funnel millions to CEOs. Unlike salaries and bonuses, which are regularly reported in the business press, the details of executive pension plans are usually hidden away in the extra fine print of a company's SEC filings.
And CEOs love that pension plan payouts come with none of those annoying tied-to-performance strings attached. US Air's Wolf, for instance, made off with a $15 million pension cash-out just six months before the company filed for bankruptcy. Richard Brown, former CEO of Electronic Data Systems, was rewarded for overseeing a 62 percent drop in share price -- and steering the firm into an SEC investigation -- with a pension plan that will pay him $1.6 million a year for life. And Treasury Secretary Snow's $33 million pension prize came despite the fact that his company's stock underperformed its competitors' by two-thirds over the last 11 years of his reign.
Take American Airlines. While preparing to make a rough landing in bankruptcy court, executives at the dead broke carrier extracted from workers $1.62 billion in wage and benefit concessions the bosses claimed were needed to keep American aloft. At the same time, the execs secretly safeguarded themselves with a glittering array of golden parachutes, including massive cash bonuses and a $41-million trust fund to guarantee their pensions should the airline crash and burn.
Even after the secret escape plan was revealed and all hell broke loose, the company held fast to its priorities. It canceled the cash bonuses. It tossed CEO Don Carty onto the tarmac. But it refused to relinquish the fund protecting its execs' nest eggs.
In the end, the executives kept their cushy trust fund while the workers were forced to go along with a deal that will lead to thousands of lay-offs and pay cuts of between 15 and 21 percent. I guess in today's business world, that's what amounts to a compromise.
Besides making one reach for the nearest airsickness bag, the American Airlines debacle highlights the growing disparity between the ways corporate America is preparing for the golden years of its executives and its rank and file employees.
In the clubby confines of America's boardrooms, the sky is the limit. Compensation committees are working overtime coming up with ever more creative -- and devious -- ways to boost the earnings of top executives. And super-charged pension plans are the hot new trend.
Among the gimmicks being used to goose the value of these plans is an accounting scheme that can dramatically increase a CEO's retirement windfall by adding phantom years -- even phantom decades -- of service to the exec's pension. In theory, it works the same way as those jailhouse rules that reward a model prisoner with time off for good behavior -- only these guys get rewarded no matter how many employees or shareholders they've knifed in the back with a homemade shiv.
Thanks to this latest innovation in corporate accounting, Leo Mullin, Delta Airlines' CEO, has had an additional 22 years of service tacked on to the less than six years he's actually worked for the company, while US Air's former CEO Stephen Wolf was given credit for 24 years he didn't really put in. And this scam isn't reserved for the high-flyers of the airline industry. When John Snow left CSX Railroad to become Treasury Secretary, he was given credit for having put in 44 years at the firm, even though he'd actually punched a time clock there for 25 -- a little fun with numbers that helped him walk away with a cool $33 million in pension booty.
Corporate directors, who have come under increasing fire from shareholders for approving excessive pay packages for high-level executives, appreciate the fact that these pension plan adjustments allow them to fly under the radar while continuing to funnel millions to CEOs. Unlike salaries and bonuses, which are regularly reported in the business press, the details of executive pension plans are usually hidden away in the extra fine print of a company's SEC filings.
And CEOs love that pension plan payouts come with none of those annoying tied-to-performance strings attached. US Air's Wolf, for instance, made off with a $15 million pension cash-out just six months before the company filed for bankruptcy. Richard Brown, former CEO of Electronic Data Systems, was rewarded for overseeing a 62 percent drop in share price -- and steering the firm into an SEC investigation -- with a pension plan that will pay him $1.6 million a year for life. And Treasury Secretary Snow's $33 million pension prize came despite the fact that his company's stock underperformed its competitors' by two-thirds over the last 11 years of his reign.
Beancounter
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nevergiveup said:
Legacy AA, the west, and judging by their actions management too appears to think it will be the Nic. I'm not saying it will be, but the odds are pretty good. It would still be a win for the east though, because they already got a long fence and bump/flush is highly unlikely. The CPs are being readied for the outcome, but surprisingly the east is not the only concern, it's the legacy AA guys and gals. I have to agree, because I think legacy AA will come out the best due to their huge wide body fleet, but I fear they'll also be the angriest, because their expectations are so high. In a very short span of time we're all going to be flying together, I plan on being professional/friendly..... and no I don't expect to be a captain.
nevergiveup
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Should be interesting.
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Here comes the "spin".
Phoenix
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Many west pilots have lost ten years of their life to bitterness and jealousy.. It's a fair warning to all, regardless of the outcome, everyone should genuinely accept this arbitration and move on, thankful, if for nothing else, at least this time it truly is a legal finality.end_of_alpa said:
luvthe9
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Not at all, sounds like no NIC and has to be a major blow to the west especially when we offered the NIC at Wye River and thy cried NIC or nothing.........again AOL screwed over all the west pilots.Beancounter said:
Gotta luv it rumors flying everywhere. Poor CB53 is in for shocker
Beancounter said:
I've no idea how this will end as yet, nor can anyone outside of the arbitrators' panel have any real clue as yet, but I hope the ending will prove at least workable for all concerned. The true tragedy in all this nonsense lay simply in not having nearly enough actually rational people involved from the start of it all....I mean seriously folks; the wholly imaginary "Army" of Leonidas?/"knights" who've "heroically" only ever "fought" inside Fantasyland?/"spartan solders"/even "dire wolves" and a group "philosophy" based on "heroic" T-shirts and pathetically ridiculous ties?...Seriously? To see something of this sort play out for a full decade's been plain past parody, and hardly served to demonstrate "the better nature of our angels" among any/all of us.
Bean; you were always one of the very few from the west actually worth even trying to "talk to/with" on these boards, and I wish everyone successful, safe and decent careers. I believe it would've been a true pleasure to fly with you anytime during this past decade, but life et al forever "is what it is"/etc. Per "and no I don't expect to be a captain."?...I hope you become one in fairly short order (not ahead of my east brethren that have more years already invested, of course) as a sufficiency of us aged dinosaurs wondering off to the "brutal" tar pit of retirement ensures a lot of empty seats to fill in the immediately upcoming years in any case.
My best to you and your family Bean. Take Care/Fly Safe/"Live long and prosper"/etc. 😉
P.S. For all "you'se" ummm.....mighty "spartan soldiers"/"cap'n aux" types/etc...Well, thanks for all the hearty laughs over the years, and should any of "you'se" mighty "spartans" feel any "righteous" faux macho umbrage, well the wager's always open...and it isn't like any great many of "you'se" self-"righteous" little punks would/could ever accept such anyway...being that you're just worthless punks with nothing more to offer than big mouths.
PM if any of "you'se" ever grow even the slightest semblance of a spine....? Thanks for all the laughs this whole last decade, mighty "spartans". I'll forever be fully willing to learn "real" flying from some PHX "ace"....So? I've merely a half century of flying to offer..and what with ancient age and slow-moving reflexes..well, I'd think most any "spartan/dire wolf/knight"...especially "soldier" should have no problem accepting such a harmless flying wager...So? Bottom Line = Thanks for all the hearty laughs/chuckles over the last 9 years, widdle "spartan" kiddies. 😉 More truly pitiful wimps I've never seen ANYWHERE else within aviation. What's most utterly disgusting about them is that through "we'll hire ANYTHING" AWA that they,the "cap'n aux" types/etc claim to actually be "Pilots"......I'd say what I really think, but I'm trying to "sugarcoat" things a bit.....
Wager's always open. Be the very first "spartan soldier"/complete joke of a "pilot" to step up....?
PM if any of "you'se" ever grow even the slightest semblance of a spine....? Thanks for all the laughs this whole last decade, mighty "spartans". I'll forever be fully willing to learn "real" flying from some PHX "ace"....So? I've merely a half century of flying to offer..and what with ancient age and slow-moving reflexes..well, I'd think most any "spartan/dire wolf/knight"...especially "soldier" should have no problem accepting such a harmless flying wager...So? Bottom Line = Thanks for all the hearty laughs/chuckles over the last 9 years, widdle "spartan" kiddies. 😉 More truly pitiful wimps I've never seen ANYWHERE else within aviation. What's most utterly disgusting about them is that through "we'll hire ANYTHING" AWA that they,the "cap'n aux" types/etc claim to actually be "Pilots"......I'd say what I really think, but I'm trying to "sugarcoat" things a bit.....
Wager's always open. Be the very first "spartan soldier"/complete joke of a "pilot" to step up....?
nycbusdriver
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luvthe9 said:
Both you and CB53 are victims of wishful thinking in this matter. Aside from the 3 arbitrators, no one knows where this is going.
nycbusdriver said:
Wrong....
Everyone knows where this is going....it is going to be (has been done) in a "fair and equitable" manner.
What no one knows is whose idea of fair will be given the most weight.
However, it is highly unlikely the east's idea of fair (one which ignores the 9th circuit's ruling saying the fruits of an illegal union failure is one to which the east pilots should no longer be allowed to reap benefits) will be given much consideration as either "fair or equitable".
In any event, you are more than correct in your observation that Luv9 is a clueless on the subject.
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