04.17.08 - Ft. Worth Star Telegram - Union pres calls for AA resignations
Union president calls for American Airlines resignations over bonuses
By ****** **********
Star-Telegram Staff Writer
A union leader is calling for the resignation of the top five American Airlines executives, including CEO Gerard Arpey, after the group split stock bonuses worth nearly $5 million Wednesday.
Laura Glading, who was recently elected president of the Association of Professional Flight Attendants, had previously asked the executives to decline the bonuses until airline employees have new contracts. She cited an "abysmal" performance record at the airline and noted that employees have been working under reduced wages and benefits since 2003.
"It's appalling," she said. "This management team has lost all credibility with the employees; they've completely lost our confidence."
The stock bonuses, which have been in place for several years, remain a major point of contention with American's unions. The bonus plan covers about 900 of the airline's top executives and managers, and awards company stock based on the performance of the shares compared with other airlines' during a three-year period.
The amount of the bonuses was derived from the stock's closing price Wednesday. According to estimates from the Allied Pilots Association, the payouts total about $38 million.
Although substantial, the bonuses are significantly less than last year, when they totaled about $160 million. That's because AMR's stock price has dropped significantly during the past year.
For example, Arpey's bonus is estimated to be worth about $1.7 million this year, compared with $7.5 million last year. For the top officers, the total value can also be affected by other undisclosed performance measures.
Earlier this week, Jeff Brundage, the airline's senior vice president of human resources, defended the bonus plan as part of an overall compensation package that varies depending on the company's performance. He said that American executives receive less-than-average compensation compared with other companies of a similar size.
"We've always targeted the midpoint of our peer group," he said.
Glading said the union would take their concerns to AMR's board of directors if Arpey and four other top officials refuse to surrender their positions.
"We will communicate to them our level of upset with this," she said. "Something's got to give."
The Transport Workers Union, which represents American's ground workers, has also been highly critical of the bonuses. It has published ads in newspapers, including the Star-Telegram, criticizing American for rewarding top managers ahead of rank-and-file workers.
Another ad was planned for today's newspaper, which shows a picture of a child's hand in a cookie jar and declares "most people learn not to be greedy ... not the leadership of American Airlines."
James Little, the union's international president, said: "The frustration is just growing year after year when we see this. The morale couldn't be lower."
Tuesday, the Allied Pilots Association, which represents American's pilots, picketed at airports nationwide and also demonstrated at the headquarters of the airline's major corporate customers.
Pilots have been in contract talks with American for more than 18 months, but little progress has been made. This week, the National Mediation Board assigned a mediator to oversee talks.
Ground workers began negotiations in November. Little said that some "very, very slow progress" has been made. Flight attendants will begin talks in June.
Executive bonuses
About 900 of AMR's top executives and managers were awarded a total of $38 million in stock under an annual incentive plan. Here is the estimated value of the payouts to the top five officers, according to a union analysis:
Gerard Arpey, chief executive officer: $1.7 million
Tom Horton, chief financial officer: $934,000
Dan Garton, executive vice president of marketing: $934,000
Gary Kennedy, senior vice president and general counsel, $686,000
Robert Reding, executive vice president of operations, $686,000
Source: Allied Pilots Association
