Incentives for US Airways executives
By: Tom Fontaine, Times Staff
04/03/2007
US Airways Chief Executive Doug Parker could pocket a bonus of at least $1.1 million if the company outperforms competitors on Wall Street over the next three years, under a plan approved by the airline board last month.
Under the plan, detailed in a federal Securities and Exchange Commission filing released Friday, US Airways' top executives will get bonuses based on the company's rate of stockholder return in comparison with 12 other leading airlines.
For instance, if US Airways has the best or second-best rate of return between Jan. 1, 2007, and Dec. 31, 2009, Parker and company President Scott Kirby would get bonuses equal to 200 percent of their base salaries.
The SEC has not released executives' salary information for 2006 yet. But in 2005, Parker made a base salary of $550,000, and Kirby, an executive vice president at the time, earned $395,833. Kirby was promoted to president last September.
If US Airways' rate of return ranked eighth-best, Parker's bonus would equal 54 percent of his base salary, and Kirby's would amount to 49 percent. They would get no bonus if the airline finished in the bottom five.
Three other top executives are also eligible for the performance bonuses, but theirs would be smaller.
The filing said the board's compensation and human resources committee has "reserved the right to decrease the awards or to make no payment of an award in its discretion."
US Airways spokesman Morgan Durrant said the performance-based bonuses are commonplace in the business world and are used "to retain executives who generate shareholder value."
When asked whether the program could further complicate the company's ongoing contract negotiations with its labor groups, Durrant said, "We won't discount any (negative) perception this might generate, but we're prepared to deal with that."
US Airways Capt. Arnie Gentile, who is communications chairman for the master executive council of the pilots union, questioned the timing of the program's unveiling.
"They care about retaining executives, but they don't care about keeping good employees. It's very indicative on how they view the difference of employee groups and management. It's nothing new," Gentile said.
Tom Fontaine can be reached online at [email protected].
STOCK PERFORMANCE
US Airways stock closed at $47.87 a share Tuesday, up 6.26 percent over the previous day's closing price.
Major airlines, as a whole, saw their stock value jump 3.07 percent between closings.
Over the past year, value of US Airways' stock has ranged from $36.19 a share to a high of $63.27 a share.
By: Tom Fontaine, Times Staff
04/03/2007
US Airways Chief Executive Doug Parker could pocket a bonus of at least $1.1 million if the company outperforms competitors on Wall Street over the next three years, under a plan approved by the airline board last month.
Under the plan, detailed in a federal Securities and Exchange Commission filing released Friday, US Airways' top executives will get bonuses based on the company's rate of stockholder return in comparison with 12 other leading airlines.
For instance, if US Airways has the best or second-best rate of return between Jan. 1, 2007, and Dec. 31, 2009, Parker and company President Scott Kirby would get bonuses equal to 200 percent of their base salaries.
The SEC has not released executives' salary information for 2006 yet. But in 2005, Parker made a base salary of $550,000, and Kirby, an executive vice president at the time, earned $395,833. Kirby was promoted to president last September.
If US Airways' rate of return ranked eighth-best, Parker's bonus would equal 54 percent of his base salary, and Kirby's would amount to 49 percent. They would get no bonus if the airline finished in the bottom five.
Three other top executives are also eligible for the performance bonuses, but theirs would be smaller.
The filing said the board's compensation and human resources committee has "reserved the right to decrease the awards or to make no payment of an award in its discretion."
US Airways spokesman Morgan Durrant said the performance-based bonuses are commonplace in the business world and are used "to retain executives who generate shareholder value."
When asked whether the program could further complicate the company's ongoing contract negotiations with its labor groups, Durrant said, "We won't discount any (negative) perception this might generate, but we're prepared to deal with that."
US Airways Capt. Arnie Gentile, who is communications chairman for the master executive council of the pilots union, questioned the timing of the program's unveiling.
"They care about retaining executives, but they don't care about keeping good employees. It's very indicative on how they view the difference of employee groups and management. It's nothing new," Gentile said.
Tom Fontaine can be reached online at [email protected].
STOCK PERFORMANCE
US Airways stock closed at $47.87 a share Tuesday, up 6.26 percent over the previous day's closing price.
Major airlines, as a whole, saw their stock value jump 3.07 percent between closings.
Over the past year, value of US Airways' stock has ranged from $36.19 a share to a high of $63.27 a share.
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