AMR Execs $13.4m vs. SWA Execs $5.3m in 2008

[Hopeful]

PAY FOR PERFORMANCE. AA lost 2 BILLION in 2008, and had to be saved from bankruptcy by an employee bailout in 2003. Therefore no executive PUP, no executive stock, no executive bonuses, no executive gimmies.....only the very large executive base pay, and that's it.

You don't like it? Leave. I am sure we could find some outsourced foreign executives to do the job for much less.

Haven't you heard? A fat salary is not enough for an executive.....He/she needs EXTRAS to take that position while the low life workers are constantly reminded how lucky we are to have jobs and if we don't like it, we can quit.

Corporate America is pro outsourcing everyone from widget assemblers to engineers and scientists. But the executive is exempt from any job-loss fears and any paycut pains.

 

[FA Mikey]

Hopeful is right. The fat Cat capitalist want this to be a county of consumers not a country of producers. A country with a strong manufacturing infrastructure has a strong middle class. The corporate execs fear people with education and a willingness to stand up for themselves in a union. Stupid and poor serves there needs, and that is where they have tried to steer this country. Its time people put their foot on the brakes, stand up and say, "No more".

We need and want to be manufacturing things and making a wage large enough to purchase what we produce.

 

[eolesen]

Hackman proposes taking away variable comp, and putting upper management on straight salary alone.

Take away variable comp, and you no longer have any reason to do more than just punch the clock. Or, as you like to say, do just enough not to get fired. AMR has too much of that already.

I say go the opposite direction --- give them a $150K salary and make 'em earn the rest in performance pay.

Personally, I wouldn't want a management who just gets paid to show up. I want guys who are going to get paid only if they produce.

Sure, it might seem like a fantasy world to you, but that's how it works in a lot of industries. Not saying there aren't people who game the system, but I'm much happier working on variable comp than I was flat salary alone...

 

[Hopeful]

Hackman proposes taking away variable comp, and putting upper management on straight salary alone.

Why not, it works for the rest of the AA workforce.

Do you think the 449 shares of stock I got in return for a $20000/yr pay cut is enough to make be jump through hoops?

Do you realize that prior to our 2003 concessions, no one could care less about executives. I'm not even sure this message board existed. Nobody cared.

We all started giving a hoot when we gave concessions, still have gotten nothing back, but the fat cats at the top are still getting theirs REGARDLESS of how much they get.

You would think someone making 400-500k a year would be content. No, they need more.

What egotistical people they are. Masters of the Universe.

 

[wcs]

I want guys who are going to get paid only if they produce.

The problem at AA is that they are getting the extra pay without any production.
The maintenance personel produced, hundreds of millions in new revenue and lowered
costs in addition to the wage reductions. What's the result? A few annual 1 1/2 percent pay, a "special" bonus of less than $600 after taxes plus AIP bonuses of $25!
The 800 in management with "variable compensation" have not failed to obtain a bonus of less then 25% of their base compensation since 2005. And that "variable" compensation has approached the level of the previous year's corporate profit in one instance, expanding their base compensation by previously unheard of multiples. All this built on the sacrifice of the hourly worker.
They're getting their compensation, when will they produce?

 

[eolesen]

Correct, except for the comment about the 800 who are in the PUP plan making at least 25% of their base.

IIRC,/L6 participants got perhaps 10% (if that) in the highest payout year. Yes, that's still more than anyone else got, but it's nowhere near 25% of base pay at that level. And they made up all but about 150 of the participants.

 

[FrequentFlierCA]

At the risk of reiterating points made by others, AA is a much larger and more global operation than WN, so the pay differential is somewhat proportional.

It's also important to remember that these numbers may turn out to be far off the mark. If AA's revenue and profit picture improves, the value of the stock will increase. If AA can't negotiate new contracts with its unions and ends up in bankruptcy, the value of the shares will be $0. Talk about an incentive for Arpey & Co. to reach new agreements with the unions.

 

[FrugalFlyerv2.0]

If AA can't negotiate new contracts with its unions and ends up in bankruptcy, the value of the shares will be $0. Talk about an incentive for Arpey & Co. to reach new agreements with the unions.

What is the incentive to reach a new agreement with the unions if it will increase the labor costs? Everyone wants a raise to at least 2003 levels, if not more. Right now the incentive seems to be to maintain at least the status quo. Then if (when?) things get worse a chapter 11 re-organization will do the trick.

 

[wcs]

AA v WN proportion
Exec pay(millions) WN = 5.3 AA = 13.4 252%
From respective 2008 annual reports
Fleet size WN = 537 AA = 626 116%
ASMs (millions) WN = 103,271 AA = 163,532 158%
Passenger
Revenue(millions) WN = 10,549 AA = 18,234 172%

Proportional compensation? As my kids say; "not so much!"

 

[Hopeful]

What is the incentive to reach a new agreement with the unions if it will increase the labor costs? Everyone wants a raise to at least 2003 levels, if not more. Right now the incentive seems to be to maintain at least the status quo. Then if (when?) things get worse a chapter 11 re-organization will do the trick.

Fine by me. The executives won't fare to well either.
Incentive to get back to 2003 levels seems unreasonable to you? Tell the executives to give back all their PUPS and see what reaction you'll get.

 

[frontline]

There's no way AA has the cash to restore our concessions from 2003. And that isn't me buying into management bs, it's just common sense. We've all seen the articles in the paper showing how AMR's cash position is dwindling and will continue to do so in 2009 and probably 2010 as well with more quarterly losses bleeding us dry. Add billions in expenses with employee raises and we become insolvent.

The PUPs are not tasteful but at least it's stock and not cash drain. It's damn near impossible for healthy companies to raise money right now, much less airlines. We need to be conservative and keep what we have until the recession doom and gloom starts to lift.

 

[Hopeful]

There's no way AA has the cash to restore our concessions from 2003. And that isn't me buying into management bs, it's just common sense. We've all seen the articles in the paper showing how AMR's cash position is dwindling and will continue to do so in 2009 and probably 2010 as well with more quarterly losses bleeding us dry. Add billions in expenses with employee raises and we become insolvent.

The PUPs are not tasteful but at least it's stock and not cash drain. It's damn near impossible for healthy companies to raise money right now, much less airlines. We need to be conservative and keep what we have until the recession doom and gloom starts to lift.

This from a company that from 1994-2001 gave us 6 1/2% over six years when they had the most profitable quarters and years. Don't hod your breath.

 

[wcs]

but at least it's stock and not cash drain.

This rational has been used several times in this and other threads.
It confuses me.
If the stock were not given away could it sold on the open market therefore
improving the company's cash position? If this is true then is the stock give away
not a defacto drain on cash?

 

[Hackman]

There's no way AA has the cash to restore our concessions from 2003. And that isn't me buying into management bs, it's just common sense. We've all seen the articles in the paper showing how AMR's cash position is dwindling and will continue to do so in 2009 and probably 2010 as well with more quarterly losses bleeding us dry. Add billions in expenses with employee raises and we become insolvent.

The PUPs are not tasteful but at least it's stock and not cash drain. It's damn near impossible for healthy companies to raise money right now, much less airlines. We need to be conservative and keep what we have until the recession doom and gloom starts to lift.

It's the same story the company cried in 1995 flatline, I guess you got fooled then also....and voted yes on the 6 year twu debacle.

Since it's only PUP stock and not a cash drain as you state, I'll take $150,000 worth of it that I can sell, along with my vacation and benefits restored. No problem right flatline? 🙄

You sure your not an errand boy for PUP club at Centerpork? If not, you should be seriously sucking up and get your butt over there ASAP. :blink:

 

[The Goose]

It's the same story the company cried in 1995 flatline, I guess you got fooled then also....and voted yes on the 6 year twu debacle.

Since it's only PUP stock and not a cash drain as you state, I'll take $150,000 worth of it that I can sell, along with my vacation and benefits restored. No problem right flatline? 🙄

You sure your not an errand boy for PUP club at Centerpork? If not, you should be seriously sucking up and get your butt over there ASAP. :blink:

Also, let's not mention the fact AMR has made significant progress in paying down their debt - hmmm - where's the money coming from to do that? That's billions of buck$ we're talking about.

Eolsen explained it some time ago (I've forgotten the "hows" since), but suffice to say it's a trick of accounting; paying down debt with earnings but not classifying the payment money as income to the corporation. Eric would have to clarify it again with a reference to GAAP, but he did explain it.

The SOBs have the money, but as has happened ever since I came to American, there's always a way to not show any corporate profit in a positive light with respect to the workers. Creative Bookkeeping 101.

That was with Crandall, though. The man was many unpleasant things but he was also fair as compared to the frat-brats in Centrepork (I like that, Mr. Hack) we have now.

All this is happening with the blessings of our illustrious "leader" (read "liar"), Little Jimmy Little - the union president whose fake degrees are no longer listed in his bio. His teaching certificate is non-existant on New York State's website where said certificate holders are listed, but I guess he doesn't know that can be looked up also so it remains in his bio.