AA executive bonus!

[Hopeful]

Do you think AA management deserves any bonus payout while the rest of us are still sharing the sacrifice?






by Santos

SHARED SACRIFICE OR NOT TO SHARE THE SACRIFICE

Dear Mr Arpey,

Before you do victory laps around the bank w/ your 23% raise, think of
the message it sends employees. Until now, you were the only exec who
moderately understood shared sacrifice & the other slogan turned into a
joke: pull together/ win together. This was even the subject of a recent
NY Times article which made you look like Oliver Twist on a corporate
stage. The author apparently was moved by your selflessness as other
execs were swinging from chandeliers.

You'll recall when I e-mailed you on 01/13/04 about the value of
returning some benefits to improve morale & consequently increase
productivity, you responded on 02/27/04 stating my views on productivity
were "very disturbing." The insinuation being workers should be totally
committed to the company's health without economic incentives. Yet,
execs are exempt from this intrinsic philosophy, & there's nothing
"disturbing" about it. Quite the contrary, lavishing execs w/ riches has
become a business plan, despite the hefty cost.

As sanctimonious as it sounds, there are 2 distinct rules governing
motivation @ AA; Workers must maintain the highest level of loyalty &
productivity in the industry even after submitting to life altering
concessions, while execs must be paid to maintain the same level of
motivation.

The only explanation given for the high cost of exec compensation is
that it assures their continued employment w/ AA. This, in essence, is a
sanitized way of saying their loyalty must be bought @ a steep price or
they'll go elsewhere. This legalized form of extortion drains millions
from the treasury.

The people @ the top are suffering from a severe case of arrogance. This
type of bravado reminds me of Civil War general Joseph Hooker, who
pompously proclaimed: "my plans are perfect." Shortly thereafter, Hooker
fought the Confederates in the Battle of Chancellorsville & was smacked
silly by a smaller army. Arrogance may advance the individual but it's
habitually destructive for the larger masses.

Lost in the orgy of excessive salaries, bonuses, stock options,
performance units is that a fundamental tenet of leadership is to lead.
Such extravagances as a 23% raise demonstrates your unwillingness to
provide leadership for a workforce that was asked to sacrifice
unmeasurably for the betterment of the company.

Sincerely,
G Santos
mechanic & burdening the sacrifice @ JFK


------------------------------------------------------------




by Santos

January 8, 2006

Dear Mr Arpey,

In the latest episode of 'Executives Gone Wild' members of management are being awarded generous stock bonuses as the company prepares to post a $600 million loss for 2005. Isn't this like giving the Super Bowl trophy to the NY Jets for finishing the season 4-12??? Jeff Brundage explains it as: "hold[ing] managers & executives directly accountable for the company's performance by placing a significant portion of [their] compensation @ risk when the company does not meet or exceed predetermined performance goals." What is this . . . a Knute Rockne pep talk before the big game??? This is all about frat boys partying hardy at the most inopportune time. I don't know what this binge will cost, but it'll be a pretty penny. At a time when AA needs fiscal sanity, executives are going to Spring Break in January.

I've heard all the elitist arguments about compensating executives to retain them, but lets not forget these are the same guys who invested my pension assets into risky dot com stocks, lobbied against upgrading airport security, & accumulated $21 billion of debt. The same Ivory League psycho-babble that writes blank checks to executives also expects a paltry $25 AIP to keep workers, like me, in a state of euphoria.

All 3 Unions agreed to concessions with the understanding that the sacrifice would be shared equally. Lets examine the time-line that has exposed 'shared sacrifice' as a misnomer; the Don Carty charade, your compensation package of almost 300,000 performance units last year, & now the orgy of stock divvying amongst executives.

I see Dan Garton will be receiving $1.7 million in stock options. The enticement, naturally, is for accountability. This is indisputable because Mr Garton has appeared in JFK as the patron saint of 'shared sacrifice'. His martyr status has been elevated to the height of Nathan Hale since he graciously accepted millions to reverse AA's tailspin. I'm moved to tears by Mr Garton's supreme sacrifice. Tell you what . . . I'm willing to follow his lead. I'll personally accept 44,000 shares of stock for the survivability of the company. It's the least I can do to honor the heroism of so many executives on the frontline of 'shared sacrifice'.

Sincerely,

G Santos

mechanic & burdening the sacrifice @ JFK



----------------------------------------------------------------



pppppp

EXECUTIVE PAY WATCH

PAY

STOCK HOLDINGS
as of 8/06/06
MR. GERARD J. ARPEY


$650,000

578,790

MR. GARY F. KENNEDY

$409,000

171,685
MR. DANIEL P. GARTON

$454,000


319,240

MR. ROBERT W. REDING

$419,000

122,000
MR. THOMAS W. HORTON

$600,000


171,400

SHARES SOLD 2006
as of 8/06/06

SHARES

VALUE

MR. GERARD J. ARPEY


21,330


$546,000

MR. GARY F. KENNEDY


105,126


$2,307,207
MR. DANIEL P. GARTON


141,133


$3,048,152

MR. ROBERT W. REDING


20,000


$454,600

MR. THOMAS W. HORTON


No Report


No Report

Long Term Incentive Program Chart

Stock Appreciation Rights

Deferred Shares Granted

2006/2008 Performance Shares Granted

MR. GERARD J. ARPEY


77,500


22,000


100,000

MR. GARY F. KENNEDY


21,800


4,700


35,000

MR. DANIEL P. GARTON


38,500


11,950


61,000

MR. ROBERT W. REDING


21,800


4,700


35,000

MR. THOMAS W. HORTON


38,500


8,400


61,000

Note: Charles D Marlett, former AMR Corporate Secretary sold 56,626 shares in 2006 for $1,237,952. James Beer, former CFO, sold 33,834 shares for $765,000 before leaving in February 2006.


Mr. Gerard J. Arpey , 47
Chairman, Chief Exec. Officer, Pres, Chairman of American Airlines Inc., Chief Exec. Officer of American Airlines Inc. and Pres of American Airlines Inc.
Mr. Gary F. Kennedy , 50
Chief Compliance Officer, Sr. VP, Gen. Counsel, Chief Compliance Officer of American Airlines Inc., Sr. VP of American Airlines Inc. and Gen. Counsel of American Airlines Inc.
Mr. Daniel P. Garton , 48
Exec. VP and Exec. VP - Marketing of American Airlines Inc.
Mr. Robert W. Reding
Sr. VP of Technical Operations - American Airlines Inc.
Mr. Thomas W. Horton
Exec. VP -Finance and Planning and Chief Financial Officer




AMR shareholder

 

[Man of the People]

There should be no pay out to anyone as long as this company continues to lose money. I am hearing AA will be posting a 4th-qtr loss. No PSP bonus payout and no AIP payout, until such time we return to a profitable carrier.

 

[Chuck Schalk]

what did management do to deserve any bonuses? Did they re-inevent the airline with grass root ideas that did not involve reducing pay, benefits, work rules, layoffs, or increased productivity of the employees? Anyone can implement that formula. Management bonuses have come off the backs of the employees with nothing in return of our investment of over 1.8 billion dollars to allegedly keep the airline afloat. We share in the sacrifice, but are removed from sharing in the rewards.

 

[Wretched Wrench]

what did management do to deserve any bonuses?

"Analysts who expected the parent of American Airlines to break even or earn money in the fourth quarter now forecast a loss for the period."

http://www.sltrib.com/ci_4905721?source=rss

"costs were rising because of factors that include higher maintenance expenses"

Now THERE'S a surprise! Guess we gotta drop more checks and take more cuts.

 

[TWU informer]

what did management do to deserve any bonuses? Did they re-inevent the airline with grass root ideas that did not involve reducing pay, benefits, work rules, layoffs, or increased productivity of the employees? Anyone can implement that formula. Management bonuses have come off the backs of the employees with nothing in return of our investment of over 1.8 billion dollars to allegedly keep the airline afloat. We share in the sacrifice, but are removed from sharing in the rewards.

They hired consulting firms and public relations firms to do all the work, and now they must be over compensated so that they do not leave and hire those firms do that work for the advancement of our competitors.

 

[AMFAMAN]

"costs were rising because of factors that include higher maintenance expenses"

I take it that the higher costs come from the fuel tank cover management screwup.

 

[Hopeful]

I take it that the higher costs come from the fuel tank cover management screwup.

0/26/2006,
Executive Compensation vs. Workers
An Overview of Wages, Pensions and Health Benefits of Rank-and-File Workers and Sky High Executive Pay Prepared by Democratic Staff of the Financial Services Committee

In the Bush economy it pays to be a CEO—but life is not as easy for the rest of America's workers. Wages for the vast majority of American workers are stagnant, while CEOs and other top executives take home larger and larger payouts. Pension plans for the rank and file are frozen and terminated, while CEOs grab giant multi-million dollar pensions and retirement packages. Health benefits and retiree health benefits for most workers are being slashed, while top executives rake in health perks as compliments to their already oversized compensation packages.

Large portions of the benefits that top executives receive are hidden—as they have not been required to be disclosed, and shareholders are powerless to limit them. A bill introduced by Congressman Barney Frank, Ranking Member of the House Financial Services Committee, and supported by a large number of Democrats would require reasonable disclosure of and permit shareholder participation in the review and approval of executive pay structures.

Wages for Regular Workers are Stagnant—Earnings for Top Executives Increase

CEOs have seen increases in their earnings at a rate far greater than that of the average worker. In 1965, U.S. CEOs at major companies made 24 times a worker's pay—by 2004, CEOs earned 431 times the pay of an average worker.[1] From 1995 to 2005, average CEO pay increased five times faster than that of average workers.[2] While CEO pay continues to increase at rates far exceeding inflation, wages for the vast majority of American workers have failed to keep up with rising prices. In fact, real wages for the 90% of Americans who earn under $92,000 a year have actually fallen since 2001.[3]

When comparing CEOs to minimum-wage earners, the contrast is even starker. In 2005, median pay for CEOs of the 100 largest companies rose 25% from the previous year.[4] Minimum-wage earners this year, on the other hand, made the same amount as last year, and every year before that since the 1996-1997 increase—adjusting for inflation they actually made less than then (in inflation-adjusted dollars, $5.15 today is the equivalent of only $3.95 in 1995). [5] CEOs, on average, take home 821 times as much as a person working for minimum wage.[6] With this extraordinary ratio, an average CEO makes more before lunch on his first day of work than a minimum-wage earner will make all year.

Pensions for Regular Workers Decrease—Pensions for Top Executives Increase

Pensions for the rank-and-file employees are increasingly frozen or done away with, while retirement perks for CEOs and other top executives continue to increase. CEOs and other top executives are often awarded multi-million dollar pensions, options and bonuses when they leave a company, while the average worker at these companies faces a less certain retirement due to a pension that was frozen or not having a pension at all.

By 2004, 71 of the Fortune 1,000 companies had at least one frozen or terminated pension plan—this number increased to 113 in 2005.[7] The number of companies that have closed a pension plan to new hires or announced an intention to do so doubled in just the past year.[8] But as companies move to freeze or terminate pension plans for regular employees, CEOs of many companies continue to rake in record pension plans:[9]

* Lee Raymond of Exxon Mobil has an annual pension of $8.2 million. * Henry McKinnell of Pfizer has an annual pension of $6.5 million. * Edward Whitacre of AT&T has an annual pension of $5.5 million.

Exxon Mobil, with the nation's largest pension for a CEO, also has a record underfunded pension plan for its regular employees—to the tune of $1.2 billion.[10] At BellSouth, pension obligations for ordinary employees have shrunk 3% since 2000, while executive pension obligations are up 89% over the same period.[11] Executive pensions are accounted for separately and are increasingly consuming larger portions of the overall pension obligation of companies:[12]

* At Aflac, executive pension obligations account for 58% of total pension liability. * At Exxon Mobil, executive obligations account for 12% of total liability. * At Federated Dept. Stores, executive obligations account for 19% of total liability. * At Pfizer, executive obligations account for 12% of total liability.

The sheer amount of money that companies are liable to pay out on these excessive retirement packages creates a drain on the profitability of companies. At seven companies, executive pension obligations are now over a billion dollars: General Electric ($3.5 billion), AT&T ($1.8 billion), GM ($1.4 billion), Exxon Mobil ($1.3 billion), IBM ($1.3 billion), Bank of America ($1.1 billion) and Pfizer ($1.1 billion).[13]

Health Benefits for Regular Workers Decrease—Health Benefits for Top Executives Increase

Health benefits for most workers and retirees have been slashed, while at the same time CEOs and other top executives rack up bigger compensation packages with health benefits. Average workers are forced to deal with the economic reality of rising health costs and the uncertainty of whether they will receive the health benefits for which they have worked, while top executives have found new ways to increase their compensation with health care perks. Health benefits to retired CEOs are above and beyond the lush multi-million dollar pensions that many of them already will receive. Like many perks of the already well-compensated executives, these benefits are often hidden from the public—because it isn't required by current disclosure rules.

A recent study of the nation's largest private-sector employers found that the number offering retiree health coverage has decreased from 66 percent in 1988 to only 33 percent in 2005.[14] But, for CEOs and other top executives at many companies, compensation and health benefit perks continue to grow:

* In October 2005, General Motors announced that it would slash health-care coverage for its unionized retirees. [15] GM's CEO Richard Wagoner raked in compensation totaling $5.5 million in 2005.[16] * Regular retirees of Northrop Grumman Corp. can expect annual increases in their health care premiums for inflation—but for a group of select top executives the company will absorb any cost increases.[17] * At Northwest Airlines, rank-and-file employees have to work 23 years before they can qualify for retiree health coverage at the age of 55—which ends in ten years when the employees become eligible for Medicare. This is in comparison to the three years it takes for top executives to qualify for lifetime health coverage that also covers their dependents and includes all out-of-pocket dental and medical costs. [18] * AT&T pays up to $100,000 per family per year for its already highest paid executives to cover any out-of-pocket health-care costs they might incur. This includes CEO Edward Whitacre who made $17.1 million last year.[19] * When Gordon Bethune retired as chairman of Continental Airlines, the company offered free health care for him and his dependents—this is on top of a lifetime of free flights, a decade of free office space and a lump-sum pension of $22 million.[20] _____

[1] AFL-CIO Executive Paywatch website: www.paywatch.org

[2] “Delinquency of the CEOs,â€￾ The Washington Post, July 13, 2006

[3] Piketty and Saez (2006), using IRS data

[4] “Median Pay for CEOs of 100 Largest Companies Rose 25%,â€￾ USA Today, April 10, 2006

[5] Economic Policy Institute website: www.epi.org

[6] “CEO Earnings: 821 Times Minimum-Wage Workers,â€￾ Reuters, June 30, 2006

[7] “More Firms Dropping Pensions,â€￾ The Seattle Times, June 28, 2006

[8] Id.

[9] AFL-CIO Executive Paywatch website: www.paywatch.org

[10] “Shortfall at Exxon,â€￾ BusinessWeek, May 29, 2006

[11] “As Worker's Pensions Wither, Those for Executives Flourish,â€￾ The Wall Street Journal, June 23, 2006

[12] Id.

[13] Id.

[14] “Retiree Health Care is Contentious Issue,â€￾ Deseret Morning News, July 23, 2006

[15] “Wielding the Ax,â€￾ The Wall Street Journal, October 18, 2005

[16] AFL-CIO Executive Paywatch website: www.paywatch.org

[17] “The CEO Health Plan,â€￾ The Wall Street Journal, April 13, 2006

 

[Ed Norton]

When will all you working class pukes stop whining? Don't you listen to Garfield or former moderAAtor?
The CEOs and other corporate elite deserve what they get, it is their BIRTHRIGHT!
You on the other hand are here to be fleeced by the corporate/government industrial complex. Go back to the TV and further dull your senses with sports and sitcoms, get back on your bar stool and inibriate yourselves. Don't forget to have many children so they may be used as cannon fodder to protect the business interest of the corporate empire!
Oh yes ...don't forget to vote for your favorite Republicrat candidate. :down:

 

[Garfield1966]

When will all you working class pukes stop whining? Don't you listen to Garfield or former moderAAtor?
The CEOs and other corporate elite deserve what they get, it is their BIRTHRIGHT!

Huh? Did I miss something? When did I say that? I do recall saying that it is corporate culture. I do recall saying that you can tilt at windmills till your heart is content. I don't think a sport figure is worth millions a year, I don't think Letterman is worth millions a year, I don't think Arpey is worth more than a few 100K a year but I am old enough to know you're not going to change it. He who has the money makes the rules. You ain’t got it so you don’t get a say. It sucks to be us. Be bitter about if you want. Throw a temper tantrum for all I care. To me it is not worth it. I worry about my little corner of the world and that is enough for me. If I find something better to do that pays better I will move on, till then I sit tight and do my job. Worrying about what Arpey is making is not worth an ulcer or a heart attack.

I have not yet seen a republican I would vote for so not sure where that one came from either.

BTW, just so we are clear. I cannot stand management. I have very little use for anyone above a level 4 or 5. They make my life difficult and duck away when the lights come on. I like management about as much as I like unions. I would not pi$$ on either if they were on fire.

 

[Ed Norton]

Huh? Did I miss something? When did I say that? I do recall saying that it is corporate culture. I do recall saying that you can tilt at windmills till your heart is content. I don't think a sport figure is worth millions a year, I don't think Letterman is worth millions a year, I don't think Arpey is worth more than a few 100K a year but I am old enough to know you're not going to change it. He who has the money makes the rules. You ain’t got it so you don’t get a say. It sucks to be us. Be bitter about if you want. Throw a temper tantrum for all I care. To me it is not worth it. I worry about my little corner of the world and that is enough for me. If I find something better to do that pays better I will move on, till then I sit tight and do my job. Worrying about what Arpey is making is not worth an ulcer or a heart attack.

I have not yet seen a republican I would vote for so not sure where that one came from either.

BTW, just so we are clear. I cannot stand management. I have very little use for anyone above a level 4 or 5. They make my life difficult and duck away when the lights come on. I like management about as much as I like unions. I would not pi$$ on either if they were on fire.

Jiminy Crickett!!!! Give me a break!!!!
Have you ever heard of SATIRE ???!!!
Yap, yap, yap...me, me, me....another fine product of the dumbed down American education system!!! Go back to watching American Idol (Idle)! :down: :down:

 

[Garfield1966]

Jiminy Crickett!!!! Give me a break!!!!
Have you ever heard of SATIRE ???!!!
Yap, yap, yap...me, me, me....another fine product of the dumbed down American education system!!! Go back to watching American Idol (Idle)! :down: :down:

Satire? I just looked up the definition and lying about what someone has said/not said is not one of the definitions. You can hurl insults all you like. It does not affect me in the least. It does seem to reveal you as a bitter person with out the intellectual ability to present a rational and coherent argument.

 

[Ed Norton]

Satire? I just looked up the definition and lying about what someone has said/not said is not one of the definitions. You can hurl insults all you like. It does not affect me in the least. It does seem to reveal you as a bitter person with out the intellectual ability to present a rational and coherent argument.

Look it up again, kitty.

 

[Ken MacTiernan]

"costs were rising because of factors that include higher maintenance expenses"


WHAT EXPENSES? Can they be a bit more definitive? It certainly wasn't to maintenance labor costs!

Will someone explain where these costs are coming from?

PS: I can't wait for the explaination. Will the company's and twu's answers be the same?

 

[Oneflyer]

"costs were rising because of factors that include higher maintenance expenses"
WHAT EXPENSES? Can they be a bit more definitive? It certainly wasn't to maintenance labor costs!

Will someone explain where these costs are coming from?

PS: I can't wait for the explaination. Will the company's and twu's answers be the same?

Of course it can be from increased labor costs. If the planes break down more then more time is spent fixing them. More mechanic hours = higher costs.

 

[Hackman]

Of course it can be from increased labor costs. If the planes break down more then more time is spent fixing them. More mechanic hours = higher costs.

When you have less aircraft, less mechanics due to layoffs and retirements, and then massive concessions....result??? FAR LOWER MAINTENANCE COSTS

The only thing going up by an insane rate is.....

ManAAgement Costs!!!!