Increase executive bonus payouts!
That last bonus wasn't out the company's coffers - rather, it came directly from the AMR shareholders.
An SEC S-3 form was filed in August 2006 to issue more shares which was, no doubt, the set-up for the recent bonuses. This "payout" from the shareholders caused the dilution (immediate drop in stock price, approx $7.00/share) after the "payouts". If a person owned 1000 shares of AMR common stock, then that individual's contribution to the (mis)management bonuses was $7000.00 or so. Since the AMR stock had made it to $41/share at one time, the real cost to the shareholder may have been much greater.
No doubt, many of those shares were handed to the institutional investors to prop up the NAV of their mutual funds to reduce the otherwise inevitable selloffs by the real investors (those who invest in those funds through IRAs, 401ks, etc., like our wonderous Super SAAver) and guaranteeing their continued loyalty to the present BOD, keeping them from being replaced.
At the annual shareholder's meetings, Funds typically vote their held shares with the Board's recommendations which are designed to keep the status quo in power.
Some time ago, there was a stink over a bill introduced by Barney Frank to allow fund investors to vote their own shares, taking the voting rights away from the fund managers as is presently the practice. Corporate America raised holy hell over this as it would have really upset their applecart; corporate actions like the AMR bonuses from the stockholders would have been remembered at BOD elections and, no doubt, resulted in a radically different BOD composition, not to mention upper (mis)management.
(Reuters...7/18...AA-$6.4B cash)
Saving money, for no other reason than just to save it, will always be a wise plan.
But does HDQ have a "somewhat" different agenda ?
NH/BB's
I still believe they're looking for something to buy, that is, after they spin off or sell the MRO business, add a few billion to their present cash position and give the workers another hosing with the TWU's blessings, then have another round of executive bonuses, whether it be for a good job or failure - it makes no difference.
NWA, with its route authorities, would be quite a prize. Steenland and minions have screwed NWA up to the point there's no fixing it without a quite radical overhaul.
AMR would, with any purchase, do exactly what they did with TWA (hose the workers, keep the routes, pay out executive bonuses). This would get them a few newer aircraft and allow some S80 retirements without having to wait their turn for Boeing deliveries and have the Riceland routes they want.
I vote for the different, unspoken agenda.
