Amr's Arpey Declines To Take Higher Salary

[FA Mikey]

Arpey declines higher salary


Gerard Arpey, chairman and chief executive of AMR Corp., has declined a raise offered by the board of directors, the Fort Worth company said Wednesday.

The parent of American Airlines Inc. set the base salary for Mr. Arpey's position at $625,000 a year, said spokesman Roger Frizzell.

He currently earns $513,700, the same salary he earned as president and chief operating officer.



Arpey declines higher salary

Its a good thing. How short sighted is this board. I guess at least Arpey believes it is a shared sacrifice. Then again how could he continue to talk to us or ask for support while taking a 100,000 plus dollar a year raise.

 

[SkyLiner]

I agree that this is a good thing. Good leaders lead by example, and I think it's should be great for company morale to know that the boss is sharing in the sacrafices too.

 

[FWAAA]

Its a good thing. How short sighted is this board. I guess at least Arpey believes it is a shared sacrifice. Then again how could he continue to talk to us or ask for support while taking a 100,000 plus dollar a year raise.

I disagree with your assessment of the Board's raise offer as "short sighted."

Had the board not offered him the raise, THAT would have been short sighted.

Whether the employees like it or not, Arpey makes a lot less money than most of his peers. AMR will have gross revenues this year of over $18 billion, still has about 80,000 employees, and might even eke out a profit this year(maybe).

Besides, had he not been offered the raise, he couldn't have declined to accept a raise, now could he?

Actaually, the Board deserves praise for their actions; they offered Arpey a raise they almost certainly knew he'd have to decline (or risk further erosion in employee morale). Plus, they continue to get a CEO for far less than his objective market value.

I give Arpey and the Board an A+ for this one. Both have had their miserable failures, but this ain't one of them. for both. B)

 

[Checking it Out]

I believe with the continued pressure the Unions have put on management, they played a role in the decision along with the board and Arpy.

The union members have given enough and management needs to do more to cut costs in order to compete effectively in the industry.

 

[Wretched Wrench]

I guess at least Arpey believes it is a shared sacrifice.

Shared sacrifice, my foot.

HIS retirement is bankruptcy-proof.

Ours is not.

He has protected himself and left us naked.

Sort of like the captain of the Titanic having the only lifeboat.

This is symbolic only. Any CEO has many options in shaping (or cloaking) his compensation. he can get this raise in another form and we will be none the wiser.

 

[Wretched Wrench]

This is PR flackery. I suspect the whole thing was scripted. Any CEO has many options in shaping (or cloaking) his compensation. he can get this raise in another form and we will be none the wiser. Carty, case in point.

It is also a slap in the face to all of us to see the board offer him a 21% annual raise. In the best of times, it took us YEARS to get a raise of this magnitude. This, after we have taken pay and benefit cuts approaching 30%, and are being set up for even more.

 

[flyhigh]

Wretched...your retirement is bankruptcy proof...it can of course be amended. That's the whole problem...a lack of understanding. Carty & Mullin lost their jobs over a lack of understanding. Why should executives (including previous exec not involved in today's issues...i.e. Crandall) not have the same retirmement protection you are afforded?

 

[Wretched Wrench]

http://pbgc.gov/services/descriptions/guarantee_table.htm tells me that if the AA plan is terminated, I will get quite a bit less.

If you have information to the contrary, I would be very interested. A little good news would be a welcome change.

Admittedly, it does not go to zero, but BK-proof, it is not. Would you like to make an analogy or comparison using the term bullet-proof? If the wound is not fatal, is the vest still bullet-proof?

 

[WingNaPrayer]

Yeah it really is a good thing he "turned down" the raise offer. Poor guy must be living in poverty down there in Bush country.

Oh wait . . .in lieu of a higher salary, I forgot he decided instead to accept "other compensation" namely common stock. Since becoming President, he has taken/been given incentive stock and performance based bonus stocks that total 172,000 shares (the bulk of which was that 135,000 whopper he got when they added Chairman of the Board to his title, which they said they would never do after the Carty debacle).

In any event, don't feel sorry for the guy, or feel like he's being a "team player" and feeling any kind of pain along with the rest of labor because he's not. (but the fact that many employees believe he is, is what makes the ruse noteworthy). His stock options given in lieu of hard salary in the past 12-14 months alone have a market value today of $1,503,280.00

He isn't hurting one bit, and labor will be asked again for wage concessions before the end of the year.

 

[robbedagain]

the ceo of usair makes i believe around 425k or 465k a year with the option of leaving the company. i cant remember the eaxct number and i at least believe that Arpey works with your unions, because our mgmt refuses to go along with what our union has laid out for them

 

[Oneflyer]

HIS retirement is bankruptcy-proof.

Ours is not.

Your retirement is guaranteed to the degree that it is funded, if its fully funded, its fully guaranteed. Read the fine print.

 

[Oneflyer]

It is also a slap in the face to all of us to see the board offer him a 21% annual raise. In the best of times, it took us YEARS to get a raise of this magnitude. This, after we have taken pay and benefit cuts approaching 30%, and are being set up for even more.

He's the CEO you're not. He is, bluntly, more important than you. He could easily leave tomorrow and go find another job paying twice as much, you can not. To replace him it would probably cost AMR 2 to 3 times as much as he is making now. AA could replace you (me as well) tomorrow for the same or less salary. These are absolute facts. Unless you live in the socialist dream world of Wing then they seem pretty obvious.

 

[MCI transplant]

<_< Flyhigh------ You'de better go over to the UAL board and read what is going on over there with their pensions!! If they get away with it, a.a. and the rest of the industry will be tripping over themselfs to do the same! The P.B.C.G. is broke folks! The Airline Industry, and the Steel industry are bleeding them dry! And I wouldn't count on a government bail out! :down:

 

[AAmech]

He's the CEO you're not. He is, bluntly, more important than you. He could easily leave tomorrow and go find another job paying twice as much, you can not. To replace him it would probably cost AMR 2 to 3 times as much as he is making now. AA could replace you (me as well) tomorrow for the same or less salary. These are absolute facts. Unless you live in the socialist dream world of Wing then they seem pretty obvious.

I think your being way too conservative! Isn't Tilton at UAL making like 5mil a year? Thats around 10X's Arpey's pay. And thats for an obscure Oil industry exec with no airline experience!!!
Good article in the Dallas paper a while back about Tom Horton Former CFO at AA now making around 5X's what his former boss arpey is making doing the same job at SBC.

 

[AAmech]

Your retirement is guaranteed to the degree that it is funded, if its fully funded, its fully guaranteed. Read the fine print.

The Top management Pension fund is only funded to the level of the employees Pension funds. If AA goes BK top managment will also receive a reduced pension