AA bonuses

[DFWTWU]

Greed

 

[700UW]

How are the AA Pom Pom users on this board going to refute that?

 

[odie01]

Not again !!!
On April 20, 2011 these PSP shares will be awarded. Using a $10 share price, if a manager chooses to cash-in his or her shares, the following total bonus value will be realized by approximately 950 AA managers. These managers include AA Flight level 8 or higher managers and level 5 or higher managers outside of AA Flight.

PSP Bonus Value @$10 share price (vest April 20, 2011):

All participating managers..................................$14.3 million
Top 5 Officers..................................................$3.1 million
Arpey.............................................................$1.15 million
Horton...........................................................$540,000
Garton...........................................................$540,000
Reding...........................................................$540,000
Kennedy.........................................................$307,000

On May 20, 2011, management will also receive a deferred shares bonus award. This bonus is not affected by competitor rankings.

Deferred Share Bonus Value @$10 per share:

All participating managers...................................$9.5 million
Top 5 Officers...................................................$1.7 million

In July 2011, management will be awarded Stock Appreciation Rights (SAR), which are similar to options with varying strike prices.

SARs (Options) Value @$10 per share:

All participating managers..................................$11.3 million
Top 5 Officers..................................................$2.9 million

2011 Total Bonus Value @ $10 share price:

All participating managers..................................$35.1 million
Top 5 Officers..................................................$7.6 million

The 2011 management bonus total value (@$10 share price) of $35.1 million will be in addition to the $344 million awarded AA management during the period 2006-2010. As management bonus plans are granted three years in advance, the bonus share totals are known through vesting year 2013. Using a $10 share price assumption, the total value of AA manager bonuses for the period 2011-2013 could reach an additional $226 million.

Source: SEC Filings

 

[737823]

Good for them. Management bonuses were set by a compensation committee and should he fulfilled to them accordingly. Would the outraged employee posters be okay if AA management decided to evade your collective bargaining agreement? You can't have it both ways. Bonuses and stock awards are commonplace and necessary to attract and retain key talent.

Josh

 

[Mr Red]

Good for them. Management bonuses were set by a compensation committee and should he fulfilled to them accordingly. Would the outraged employee posters be okay if AA management decided to evade your collective bargaining agreement? You can't have it both ways. Bonuses and stock awards are commonplace and necessary to attract and retain key talent.

Josh

Wow, I thought that was when the company made money.

 

[strikeforce]

Good for them. Management bonuses were set by a compensation committee and should he fulfilled to them accordingly. Would the outraged employee posters be okay if AA management decided to evade your collective bargaining agreement? You can't have it both ways. Bonuses and stock awards are commonplace and necessary to attract and retain key talent.

Josh

Are you kidding me! retain and attract managers that are fiscally reckless, clueless, and just plain morons. Are these the managers your talking about? What a joke! I'm amazed that the pilots, f/a, and mechanics haven't shut this place down. But, I think it's coming!

As far as management evading our CBA....they did that in 2003. Don't forget we had an agreement amendable in May 2004. I wouldn't call it evading.....I would classify it as criminally and fiscally raping us. And Yes......we got it from both ends.

 

[eolesen]

Sorry, there is no excuse for this program to continue to exist. It's feeding at the trough, and I've questioned it for seven years running. No other action by management, including the concessions, has caused more damage to management/labor relations.

I keep waiting for Arpey to show himself as a true leader, and publicly decline the awards. And I'm sure some of his direct reports would follow suit. But it has yet to happen.

Typically L6 and higher is included in the plan; L5's are the exception, and few & far between.

 

[AANOTOK]

Good for them. Management bonuses were set by a compensation committee and should he fulfilled to them accordingly. Would the outraged employee posters be okay if AA management decided to evade your collective bargaining agreement? You can't have it both ways. Bonuses and stock awards are commonplace and necessary to attract and retain key talent.

Josh

There are three scenario's going on here with this comment by Josh.
(1) He likes trolling around because of his true disdain for labor
(2) He really is ignorant of the facts
(3) He is just ignorant

A strong case could be made for all three.

 

[Maark767]

Good for them. Management bonuses were set by a compensation committee and should he fulfilled to them accordingly. Would the outraged employee posters be okay if AA management decided to evade your collective bargaining agreement? You can't have it both ways. Bonuses and stock awards are commonplace and necessary to attract and retain key talent.

Josh

Whenever I see your scene name, I dont even bother reading your posts. I scroll right down and pass your nonsense.

 

[odie01]

Sorry, there is no excuse for this program to continue to exist. It's feeding at the trough, and I've questioned it for seven years running. No other action by management, including the concessions, has caused more damage to management/labor relations.

I keep waiting for Arpey to show himself as a true leader, and publicly decline the awards. And I'm sure some of his direct reports would follow suit. But it has yet to happen.

Typically L6 and higher is included in the plan; L5's are the exception, and few & far between.

I agree, and what ever happened to the saying, "Lead by example." If I were one of these executives receiving these payouts, I truly would be ashamed.

 

[chris perry]

Most people at the company would agree its the Josh attitude that has poisoned labor relations. Its pretty aarrogant to think that management deserves a raise bonus every year and labor none for the past 8. Then haarrp working together slogan!! This is a very different company than the one I joined 20 years ago..... Its even changed in the last six months for the worst.Its to the point to start looking for work somewhere else...... Resumes going out, its time.... Its a sad state of affairs at the company...

20 year AMT Chris Perry

 

[eolesen]

Chris, the class I railroads like UPRR and BNSF love having skilled labor to work on diesels and in signals... having the AMT background might pay off in those specialties. They also have shops in Fort Worth and a lot of other AA cities.


I don't know that anyone except Josh is defending the bonuses. Since they're contractual, it's not as simple as demanding "don't pay them" but as I have said over and over, just because it is contractual doesn't mean that someone has to accept it.

 

[odie01]

Not again !!!
On April 20, 2011 these PSP shares will be awarded. Using a $10 share price, if a manager chooses to cash-in his or her shares, the following total bonus value will be realized by approximately 950 AA managers. These managers include AA Flight level 8 or higher managers and level 5 or higher managers outside of AA Flight.

PSP Bonus Value @$10 share price (vest April 20, 2011):

All participating managers..................................$14.3 million
Top 5 Officers..................................................$3.1 million
Arpey.............................................................$1.15 million
Horton...........................................................$540,000
Garton...........................................................$540,000
Reding...........................................................$540,000
Kennedy.........................................................$307,000

On May 20, 2011, management will also receive a deferred shares bonus award. This bonus is not affected by competitor rankings.

Deferred Share Bonus Value @$10 per share:

All participating managers...................................$9.5 million
Top 5 Officers...................................................$1.7 million

In July 2011, management will be awarded Stock Appreciation Rights (SAR), which are similar to options with varying strike prices.

SARs (Options) Value @$10 per share:

All participating managers..................................$11.3 million
Top 5 Officers..................................................$2.9 million

2011 Total Bonus Value @ $10 share price:

All participating managers..................................$35.1 million
Top 5 Officers..................................................$7.6 million

The 2011 management bonus total value (@$10 share price) of $35.1 million will be in addition to the $344 million awarded AA management during the period 2006-2010. As management bonus plans are granted three years in advance, the bonus share totals are known through vesting year 2013. Using a $10 share price assumption, the total value of AA manager bonuses for the period 2011-2013 could reach an additional $226 million.

Source: SEC Filings

I'm not sure I really understand how this bonus system works. The way I read it is, every manager level 5 and higher gets paid, Right? Also, it reads that in May they will receive an additional bonus in deferred shares, Right? And if that's not enough, in July they get SAR's, not the airborne sickness, but more stock options, Right? Is this standard practice for a corporation to reward their executives, when all three labor groups agreed to concessions to avoid bankruptcy?

 

[eolesen]

I'm not sure I really understand how this bonus system works. The way I read it is, every manager level 5 and higher gets paid, Right? Also, it reads that in May they will receive an additional bonus in deferred shares, Right? And if that's not enough, in July they get SAR's, not the airborne sickness, but more stock options, Right? Is this standard practice for a corporation to reward their executives, when all three labor groups agreed to concessions to avoid bankruptcy?

First of all, I said earlier today that very few of the L5 managers are among the privileged, and those that are probably are not in the field locations (including the bases). I knew a lot of L5's at HDQ when I was still there, and none ever admitted to being in this particular program.

Second... is it standard practice to reward executives? Not really, but as has been pointed out ad nauseum, this is not a reward -- it is contractual variable compensation.

Love it, hate it, call it a loophole or make up other names for it, but at the end of the day, variable compensation is not a discretionary payment. It has a stated value to be paid provided certain conditions are met. Quite similar to commissions and other incentive payments which exist for commissioned salespeople. Hit the target, you get paid. GM continued to pay out incentives to their dealers for hitting sales targets while they were in bankruptcy, and their salesforce continued to earn commissions. The fact that they'd stiffed shareholders, creditors, and the banks didn't matter.

We've discussed this several years in a row. It pisses me off, too, but as much as I feel the triggering conditions should have been changed seven years ago to include financial benchmarks/thresholds, I don't sit on AMR's compensation committee, so they weren't changed.

 

[odie01]

First of all, I said earlier today that very few of the L5 managers are among the privileged, and those that are probably are not in the field locations (including the bases). I knew a lot of L5's at HDQ when I was still there, and none ever admitted to being in this particular program.

Second... is it standard practice to reward executives? Not really, but as has been pointed out ad nauseum, this is not a reward -- it is contractual variable compensation.

Love it, hate it, call it a loophole or make up other names for it, but at the end of the day, variable compensation is not a discretionary payment. It has a stated value to be paid provided certain conditions are met. Quite similar to commissions and other incentive payments which exist for commissioned salespeople. Hit the target, you get paid. GM continued to pay out incentives to their dealers for hitting sales targets while they were in bankruptcy, and their salesforce continued to earn commissions. The fact that they'd stiffed shareholders, creditors, and the banks didn't matter.

We've discussed this several years in a row. It pisses me off, too, but as much as I feel the triggering conditions should have been changed seven years ago to include financial benchmarks/thresholds, I don't sit on AMR's compensation committee, so they weren't changed.

Love it, hate it, call it a loophole or make up other names for it, but at the end of the day, I will call it IMMORAL, and a slap in the face, to the backbone of AA. Thanks for your insight, it means alot since your ex/management.