Gotta Laugh!

Hopeful

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Dec 21, 2002
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You really have to laugh at AMR''s response to the irrevocable pension granted to its top executives. They claim that it WAS necessary to retain these key people so they won''t be courted and hired by other companies.
I have to wonder, WHAT COMPANY IN THEIR RIGHT MIND WOULD HIRE TOP EXECUTIVES THAT HAVE DRIVEN A THRIVING SUCCESSFUL AIRLINE INTO THE GROUND?
 

FA Mikey

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Aug 19, 2002
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From Business Week: American also terminated its deferred compensation plan for executives at the end of last year. The money -- earned by executives but deferred for tax reasons -- was paid out to them, and they took the tax hit. Without the move, the deferred pay would have been available to creditors. American wouldn''t say how much money or how many people were involved. A spokesman says the changes were made to retain key execs.

Why do keep hearing all these steps management is taking to protect Sr Execs in the event of BK? Is that they know full well it will happen? Of course, now we can go in to court and negotiate from our reduced compensation levels.
 

skivoodoo

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Sep 7, 2002
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AA said that the fund was necessary to "retain these key people? That's funny, There is one name on the list that is "supposedly" retired from AA. "Anne McNamara"

For everyone that doesn't know. One of the 45 "trust fund" babies is Anne McNamara. She was a senior VP and legal council and supposedly retired from AA. But GUESS WHAT, she sits on the board of directors at AAA, the American Arbitration Association. YES, the very company that AA hired to do our voting. I find it quite interesting that AA was given the results of our original vote BEFORE it was announced to anyone. Now how do you think they found out?


Me thinks AA speak with forked tongue.
 
OP
Hopeful

Hopeful

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Dec 21, 2002
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Here''s the whole thing.


BusinessWeek Online
How American''s Execs Covered the Bases
Friday April 18, 8:37 am ET


For months, American Airlines (NYSE:AMR - News) executives have struggled to keep the nation''s largest airline out of bankruptcy. And on Apr. 16, with the last of three unions approving deep contract concessions, American avoided, at least for now, that painful step.
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But even as they hoped for the best, top executives, including CEO Donald J. Carty, were preparing for the worst. Late last year, they moved to protect part of their own pensions and deferred compensation in the event of bankruptcy.

In a securities filing on Apr. 15, American revealed that last October, it had created a "secular trust" designed to keep retirement benefits out of the hands of creditors, as Delta Air Lines (NYSE:DAL - News) and other companies have also done.

FRIENDLY COURTS. American also terminated its deferred compensation plan for executives at the end of last year. The money -- earned by executives but deferred for tax reasons -- was paid out to them, and they took the tax hit. Without the move, the deferred pay would have been available to creditors. American wouldn''t say how much money or how many people were involved. A spokesman says the changes were made to retain key execs.

By sidestepping bankruptcy, none of these safeguards seems to matter. But Carty has made it clear to workers that the airline, coping with high fuel prices and slack traffic, might have to file later.

Indeed, the belief that bankruptcy is inevitable led some pilots to vote against concessions, for fear they''ll simply be negotiating from a lower base in Chapter 11. The company has indicated that if it files, it plans to do so in Manhattan, where judges have a reputation for taking a friendly view of executive severance packages. If bankruptcy comes to pass, managers will have given their wallets some protection.
 

Buck

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Aug 20, 2002
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On 4/19/2003 8:51:42 AM eolesen wrote:

McNamara shows up on the list because she retired after the trust was formed.

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Why use a arbitration group that has a former executive of AMR in it''s employee?
 

TWAnr

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On 4/19/2003 8:51:42 AM eolesen wrote:

McNamara shows up on the list because she retired after the trust was formed.

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Eric,

With all due respect, if she has a financial interest in the outcome of the vote, she has a conflict of interest. As long as the viability of her pension plan is affected by this vote and the financial condition of AMR, the AAA should not have been the entity conducting this election for the three major American Airlines unions whose members were deciding whether to ratify these tentative agreements.

At least two of these elections were rife with procedural irregularities if not outright fraud.

The two issues may have nothing to do with each other, but often the mere appearance of impropriety has lasting effects and severe consequences.