Once again I have never understood the concept of executive bonuses.
Truer words have not been posted here for quite a while. Refreshing to see such honesty posted here.
They are paid a GOOD salary for doing a job. Why should they get extra money for doing their job. Pilots don't receive large bonuses for on time performance, f/as don't get bonuses for pax commendations (which generate return customers), mechanics don't receive bonuses for quick and safe "fixes", ramp don't receive bonuses for quick turns, agents don't receive bonuses for getting the flight closed out on time. Why, because they are doing their jobs. This sense of upper level mangt. entitlement has to be the next great paradigm change. Do your job, get paid, so be it.
Management at almost every company is paid "good money" as a base salary. They also demand (and almost always successfully negotiate) variable compensation so that they make more money when their company's financial performance outpaces the competition.
For many years, shareholder activists have called for "accountability" in executive compensation. Objectively-determined variable compensation is often the right answer to those concerns. And yet in this post, you appear to be calling for a return to guaranteed salary without any variable component. Good luck with that.
I'm sure you've heard of "pay for performance." The PUP/PSP is a perfect example.
As I posted about three years ago, calling the PUP/PSP payouts "bonuses" is misleading, since that makes it sound like the execs all of a sudden decided to grant themselves additional pay in early 2006.
Nothing could be further from the truth. The execs have worked for years for base pay that's less than they could have earned in other industries. In exchange for accepting smaller base pay (guaranteed salary) they also counted on long-term incentive variable compensation about which so many incessantly whine, the PUP (now PSP) program.
Shareholders are happy when AMR outperforms the stock of CAL, DAL, UAUA, NWA and LCC (USAir). What better objective measurement of company performance? Like it or not, AMR outperformed most other airline stocks over the past few years. Having every legacy peer except for CAL file for Ch 11 protection helped, of course. But that's precisely the point: AMR management turned things around without canceling the stock (unlike all those other competitors). THAT was appreciated by stockholders. So the execs dusted off their contracts, applied the formula, and arrived at their variable compensation (or Bonus, for those wedded to the term).
When you were an FA, your role consisted of managing in-cabin safety and serving the food and drinks. That was about it. Your only concern for company finances would have been to make sure drink and headset money was turned in.
On the other hand, had you been the CEO or another top-level exec, then your role would have been to oversee the operations (moving tens of millions of passengers where they want to go) AND to do it while bringing in lots of money and spending less than you bring in.
As your post pointed out, you have never understood executive compensation. And likewise, I'm certain that senior management doesn't understand why the FAs and pilots and mechanics and bagsmashers and agents have never demanded variable compensation similar to what they have.
What you really don't understand is that senior management would demand (and probably get) lots more guranteed base salary if your ideas were adopted. Without any upside, they'll want a lot more annual salary. Almost everyone else in the country thinks the current scheme makes more sense: they make more money if the company they manage performs well.
