AA bonuses

[eolesen]

I will call it IMMORAL, and a slap in the face, to the backbone of AA

On this we agree.

 

[chris perry]

Bottom line its a moral issue,something thats missing these days. Its true with union,company and the average worker.
somewhere in all this certain morals were lost. Teaking the numbers to make targets etc.... Everyone played a part until ithas become the norm. I was raised better than this.... Yet we find ourselfs caught in this constant battle with mangement games.

 

[frontline]

Um first of alll where are you getting this info from? I doubt this has been released yet if they are going to pay them in April like usual.

I don't understand the big fuss over this every year. They get there pay and we get ours. Everyone knows CEO's make more money than line workers. If they were taking cash out of the company I'd be upset, but stock really is not a big deal as it does not impact AA's operations.

I think it is just the militant union types on here grasping for something to attack our CEO.

 

[Hopeful]

Um first of alll where are you getting this info from? I doubt this has been released yet if they are going to pay them in April like usual.

I don't understand the big fuss over this every year. They get there pay and we get ours. Everyone knows CEO's make more money than line workers. If they were taking cash out of the company I'd be upset, but stock really is not a big deal as it does not impact AA's operations.

I think it is just the militant union types on here grasping for something to attack our CEO.

"They get there pay and we get ours"....??????????????

Really? What have we got over the past 8 years, frontline? I hope you are not referring to the $.40 an hour we received for the first 5 years of the CONCESSIONARY contract we are still working under!
So stock is not a big deal? They don't just receive stock, my boy.
I've been giving $20,000 a year back to this company since 2003 for a total of $160,000 to date and in return I got 449 shares of AA stock.

The bottom line here is SHARED SACRIFICE...
Do you know what that means, frontline?

It means NO ONE SHOULD GET ANYTHING!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

 

[damajagua]

Um first of alll where are you getting this info from? I doubt this has been released yet if they are going to pay them in April like usual.

I don't understand the big fuss over this every year. They get there pay and we get ours. Everyone knows CEO's make more money than line workers. If they were taking cash out of the company I'd be upset, but stock really is not a big deal as it does not impact AA's operations.

I think it is just the militant union types on here grasping for something to attack our CEO.

You are not correct about "just the union millitant" I am by far not not a union militant.
At times I dislike some of the union actions just as much as the company.
This is a "moral" issue. If you can not understand that then there is no sense in having a discussion with you.
By the way I would not mind getting a a few thousands AMR share......"it does not impact the AA's operatoins"

 

[eolesen]

By the way I would not mind getting a a few thousands AMR share......"it does not impact the AA's operatoins"

Would you be willing to take your retro pay in stock?

 

[strikeforce]

Um first of alll where are you getting this info from? I doubt this has been released yet if they are going to pay them in April like usual.

I don't understand the big fuss over this every year. They get there pay and we get ours. Everyone knows CEO's make more money than line workers. If they were taking cash out of the company I'd be upset, but stock really is not a big deal as it does not impact AA's operations.

I think it is just the militant union types on here grasping for something to attack our CEO.

I'm sorry but AA, and Arpey and his henchmen have been robbing this company of not only your wages and benefits, but company assets, as well. The majority of all aircraft are fully mortgaged, and re-mortgaged....even the ones in production at Boeing. This is equivalent to continuously re-mortgaging your home.....sounds familiar to the housing mess we're in today. Total debt increased by billions. We lost half a billion in 2010, although we brought in 22 billion. Amazing! Now, Arpey and the boys aren't blinking an eye to bonuses.....to retain key talent. Talented people aren't fiscally irresponsible, let alone morally nieve.
Arpey and the boys are irresponsible, and reckless thieves......slowly bankrupting this company to enrichen the people on wall street...I mean his college buddies on wall street! Does anyone have a clue to what AA pays in interest payments on the total debt.......2.5 billion for 2011.....10% of gross revenue.
I'm not a math whiz by any means....but looking at these numbers.....I wouldn't bet on AA lasting more than a few years before drastic measures are needed to stop the bleeding. AA is going down the same path as your local governments....layoffs and higher taxes. At AA it will be layoffs and more concessions!
As far as stock options.....unfortunately the more options AA prints and makes available to everyone....the price declines. AMR stock is not very popular because AA keeps losing money, therefore demand is low. The price for AMR stock has hovered around $7 per share.....with more options coming in look for the price to go down for 2011. Sell..Sell..Sell!

So when you say "what's all the big fuss about".....remember this when the twu approaches you for more concessions in order to save your job! It's coming! If you see light at the end of this tunnel....good luck!

 

[FWAAA]

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.

I have previously posted about my lack of outrage over the executives' performance share plans (and their compensation plans in general), which in the black and white world of this forum probably places me in the "defender" category. On at least this issue, you and I have not agreed in the past and it's entirely possible that you own the higher ground and that I'm wrong. (As an aside, anyone with any reading skills who's been paying attention over the years should be able to tell from our writings that we're not the same person.)

Executives at all public companies are well-paid whether or not their employees have had to endure concessions, and AA is no different. Troubled companies often have to offer what looks like really generous pay compared to the successful high-tech companies or oil companies or stable consumer product firms. Microsoft or Exxon or Kellogg's have stock that is likely to increase in value over the long-term and none of them is likely to file Ch 11. Legacy airlines, on the other hand, don't typically pay execs as much as other public companies and have to design variable pay programs that reward good results.

When AMR hit $41/sh in January, 2007, after touching 1.25/sh in early 2003, that was a really good result (for good or bad) under their Long Term Incentive Pay programs, and the execs cashed in. For all we know, the only reason AA's top execs stayed from 2002 until 2007 was because of the possibility of that kind of payoff. It certainly wasn't for the base salary, which the board targets as just 15% of their total annual compensation.

Looking back, you gotta admit that it looked like things had turned around in early 2007. AA was thriving despite climbing fuel prices and its stock price had increased more than 3,300% in less than four years. All of its legacy peers except for CO had filed at least one Ch 11 petition and had wiped out all shareholder value. AMR shareholders had plenty of reasons to be pleased with the company's turnaround, and shareholders didn't complain about the PUP/PSP payouts. The execs at US, UA, DL and NW (except for Grinstein at DL) all took gigantic payouts upon their emergence from bankruptcy protection. So for not wiping out the shareholders, Arpey and the others should have been rewarded with less pay than the execs at all those other airlines? I can't blame them. For the 10 years 1999-2008, AA's execs received only 65% of their target compensation - meaning that their "concessions" have equaled 35%.

Many of the posters to this forum appear to have been operating under a mistaken assumption that the execs would voluntarily take concessions equaling 85% (since their base salary is only about 15% of their target compensation). If AA's execs can't accept their variable pay in years where AMR shows net profits (like 2006 and 2007) and when AA's stock vastly outperforms every other airline in the peer group (admittedly helped because some of them wiped out their stock in Ch 11), when exactly would it be ok for execs to accept their variable pay?

Getting worked up in a lather over the pay of the top executives takes time and energy away from the real task at hand, as you have mentioned - and that is figuring out how to substantially increase one's own pay.

The OP's link is to a website run by the flight attendants who are suing the APFA and AA over the concessions and their numbers are suspect. They attribute their numbers to SEC filings which often don't represent the actual amounts paid to the execs. For starters, they assume that AMR is worth $10/sh in April, 2011. Right now, it's about $7.50/sh. Wonder what that does to the numbers? Given that AMR stock has underperfomed many other airlines over the past three years, the PSP payouts will once again be very small compared to the banner years a few years ago, meaning that the execs will only receive a fraction of their target pay, which everyone should agree is the right result. The truly disgruntled (or ignorant) will continue to claim that the execs should receive no variable pay, not conceding that their pay this year represents huge concessions.

 

[damajagua]

Would you be willing to take your retro pay in stock?

Sure why not. This is one of those issues that I do not look eye to eye with some
of the unions at AA. I would also preffer 401k match than a define pension plan.

 

[FWAAA]

Arpey and the boys are irresponsible, and reckless thieves......slowly bankrupting this company to enrichen the people on wall street...I mean his college buddies on wall street! Does anyone have a clue to what AA pays in interest payments on the total debt.......2.5 billion for 2011.....10% of gross revenue.
I'm not a math whiz by any means....but looking at these numbers.....I wouldn't bet on AA lasting more than a few years before drastic measures are needed to stop the bleeding.!

AMR paid $823 million in interest in 2010, not $2.5 billion. You only tripled the interest paid numbers. You may have a future on Wall Street! 😛

Netting out the interest earned and capitalized interest, AMR paid only $766 million in net interest in 2010. Numbers are here:

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9NDEwMzQyfENoaWxkSUQ9NDIwMzg4fFR5cGU9MQ==&t=1

 

[odie01]

Would you be willing to take your retro pay in stock?

AMR stock is already in the crapper, stock in lieu of retro equals dilution, it won't fly. Interesting though.
They can keep their stock, just give us the retro so we can invest in solid blue chips. Owning AMR stock is like owning a beach front condo in Tucson.

 

[Hopeful]

Sure why not. This is one of those issues that I do not look eye to eye with some
of the unions at AA. I would also preffer 401k match than a define pension plan.

401k match? Depends on your age. Unless you are just starting out with the company in your 20s and 30s, you lose.
Later in life, to begin a 401k in lieu of a DB plan is financial suicide. Younger people will benefit far greater than older workers.

As for opting for stock in lieu of retro pay, you had better think long and hard on that one.
The original TWU concession deal of 2003 cost me $20,000 a year for 5 years for a total of $100,000.
In return, the generous company gave me 449 shares of stock optioned at $5 a share. $5 x 449 = $2245.

$2245 of stock in return for $100,000!!!! Now it's almost 8 years and that total is nearing $160,000.
Talk about stock dilution..

Tell me, what do the executives give in return for their stock options?

 

[AANOTOK]

Would you be willing to take your retro pay in stock?

Lat time I was "given" stock for something, I had to pay for it.
Sooo, they would give me 1000 shares of stock in lieu of retro and charge me for the shares. That seems workable!

 

[FWAAA]

As for opting for stock in lieu of retro pay, you had better think long and hard on that one.
The original TWU concession deal of 2003 cost me $20,000 a year for 5 years for a total of $100,000.
In return, the generous company gave me 449 shares of stock optioned at $5 a share. $5 x 449 = $2245.

Sorry to be such a pedantic SOB, but your options were not worth $5/sh until AMR hit $10/sh. The $5 represents the price you had to pay to buy the shares (since you got the increase in price over the $5 option price). When issued, the stock was selling for $5 (hence the $5 price) so your options were worth $0 on May 1, 2003. At AMR's peak in Jan 2007 of $41/sh, your 449 shares were worth $16,164 ($36/sh x 449 sh). Of course, nearly every poster to this website posted that they sold their shares as soon as they vested because everyone was certain that AA would file Ch 11.

$2245 of stock in return for $100,000!!!! Now it's almost 8 years and that total is nearing $160,000.
Talk about stock dilution..

Tell me, what do the executives give in return for their stock options?

No, your options did not come close to making up for your concessions. Even if the represented employees had been given 100% of the outstanding AMR stock in 2003, its value in January, 2007 at the peak of $41/sh would not have made up for the employees' concessions.

The executives gave up the same percentage paycuts in their base guaranteed salary as the represented employees and their total compensation over the past deacade has been only about 65% of their target compensation, so it looks like their concession percentage is about 35%. No doubt you'll argue that it was not enough. As an aside, what concession percentage for execs would have been large enough?

 

[AANOTOK]

No need to apologize for being a pedantic SOB. Bottom line is before I could do anything with those shares, I had to giveback $5 per share.
So if you follow, I would imagine AA would love to "give" me shares instead of retro (good luck on either) then turn around and charge me per share to cash them in. Sounds like a great deal huh? <_<