Senior execs give up SERP

desertfox

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Sep 13, 2002
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Letter just out from Carty......retention payments have been given up...admits error in failing to explitily describe these benefits and appologizes earlier.

Ok...now lets all get over it and get on with real airline business....
 

Guest
so Carty and top management gave up the pension protection. Is that what i am understanding.
 

RV4

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Aug 20, 2002
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Oh yeah, I trust them now!

This whole exercise was nothing more than an attempt to PROTECT the union leaders who sold us out. The Company/Union Collaborators are trying to deflect our attention.
 
OP
D

desertfox

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Sep 13, 2002
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On 4/18/2003 3:14:16 PM A77IGW wrote:

so Carty and top management gave up the pension protection. Is that what i am understanding.

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Yes, its on Jetnet now.

So lets get the signatures on the agreements and move forward......
 
OP
D

desertfox

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Sep 13, 2002
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On 4/18/2003 3:45:43 PM FA Mikey wrote:

Anything in that letter about the 100% bonuses the mighty 45 will get in 05. Sorry just because he has let go of one of the things we found out about is not good enough. I had a BS TA rammed down my throat. Extended voting when they didn''t like the outcome. Then I find out he and the others have bonuses and trusts, among the things they forgot to show when they opened up the books for us.Way to little, way too late.

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FA Mikey...face it....the glass is always half empty for you. I''m sure you could point out all the flaws in the Hope Diamond....
 

UnwillingTwu

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Apr 15, 2003
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On 4/18/2003 3:14:16 PM A77IGW wrote:

so Carty and top management gave up the pension protection. Is that what i am understanding.

----------------


Yes, its on Jetnet now.

So lets get the signatures on the agreements and move forward......




desertfox
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Reread the Statement !! the give up was the Retention Bonus to stay to 05. Not to give up there SERP!! Special trust fund pension protection. Were will they make this back up?? what little perk unseen out of the boardroom.
 

AAONO

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Apr 18, 2003
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It''s just another smoke and mirrors tactic, what will keep them from reinstating it next week. How about make it part of our contracts that they will receive no bonuses or "deals" for 6 years....share the sacrifice.....Caarty makes me want to puke...LIAR!
 

atabuy

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Oct 13, 2002
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On 4/18/2003 3:14:16 PM A77IGW wrote:

so Carty and top management gave up the pension protection. Is that what i am understanding.

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Actually no on the pensions, yes on management bonuses. Or what they like to call retention benefits.
 

FA Mikey

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Aug 19, 2002
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Anything in that letter about the 100% bonuses the mighty 45 will get in 05. Sorry just because he has let go of one of the things we found out about is not good enough. I had a BS TA rammed down my throat. Extended voting when they didn''t like the outcome. Then I find out he and the others have bonuses and trusts, among the things they forgot to show when they opened up the books for us.Way to little, way too late.
 

WingNaPrayer

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AMERICAN AIRLINES MANAGEMENT VOLUNTARILY CANCELS RETENTION AGREEMENTS
FORT WORTH, Texas – American Airlines today said its senior management has voluntary cancelled retention plans put in place to retain key executives.
"These retention agreements were created more than a year ago, immediately after the events of Sept. 11[sup]th[/sup], when the industry was struggling and our Board of Directors had serious concerns about our ability to retain our senior management," said Don Carty, American’s chairman and CEO. "The goal was to give senior officers an incentive to stay with the company when many were being offered more generous packages to go elsewhere."
Carty said that during talks on achieving employee cost savings agreements he held discussions with union leaders about his concerns on retaining the most effective members of the management team in light of the number of people who either have left the company or chose to retire early. However, he did not explicitly describe what plans were put in place.
"I have apologized to our union leaders for this and for the concern it has caused our employees," Carty said. "Those executives who have made the personal commitment to remain with American during this financial crisis, myself included, are not here solely for monetary reasons and we have all agreed to give up these retention payments in order to give our employees confidence in management’s on-going commitment to shared sacrifice."
Another issue of concern among employees was the company’s Supplemental Executive Retirement Plan or SERP. American said its SERP was established in 1985 and, unlike its other employees’ retirement plans, was never funded. This past October, during a cycle in which the company was contributing to employee pension plans, it made an initial payment – the first ever – to the plan, which remains underfunded.
The SERP is a common tool used in a broad range of industries to help protect a portion of the pension benefits that executives have already earned. American did not add benefits or enhance the program, in contrast to some of its competitors, nor did it allow funds to be withdrawn except through the normal retirement process.
"I have always committed to doing our best to fund the pension plans for our employees and their families, even as we lost money through difficult financial times," Carty said. "My ultimate goal is to provide pension security for all employees, including the management team."
Because the SERP represents a benefit already earned, in some cases over a period of 17 years, American said the initial payment to the SERP remains in place.
 

AAmech

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Aug 22, 2002
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I think their plan is they''ll just wait till they file BK THEN they''ll go to court and request even bigger Retention bonuses!
 

Fly

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Because the SERP represents a benefit already earned, in some cases over a period of 17 years, American said the initial payment to the SERP remains in place.


So, they kept the pension, only gave up the bonuses. Does that mean the employees can pick which half of the TA they don''t want too?
 

Boomer

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Aug 20, 2002
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A Modest Proposal
They gave up the retention program which was fully disclosed to all of the Unions PRIOR to the vote. Both sides, AA & the Unions, are skating around this fact.

They KEPT the SERP which was not disclosed to the UNIONs PRIOR to the vote. Both sides have acknowledged that fact.

Why is the exact nature of what was disclosed and what was not disclosed so sensitive?

KERPs, key employee retention plans have been successfully challenged in bankruptcy court when such plans were not part of the information made available under Sect. 1113. The company covered any potential challenge to the KERP by disclosing its' existence during the negotiations.

The SERP was acknowledged by the company to have been created in 1985 but never funded until October of 2002. The company now claims that the SERP was funded at the same time as the other pension funds. However, the Company did not acknowledge actual minimum funding of the pension plans until December when they announced that the plans would be funded with shareholder equity resulting in an additional 1.1 Billion dollar charge for YE02. What was used to fund the SERP in October, cash or shareholder equity? The reason that funding the SERP and then failing to report it, like the funding for the other plans was done, is that this is material information. Failure to dsiclose material information regarding the financial condition of the corporation, and statements made subsequent to the disclosure could reasonably be viewed as "bad-faith" negotiations. Under Sect. 1113 of the bankruptcy code, before a RLA contract can be voided; good faith negotiations had to have occurred.

In short: Little may not be able to sign the agreement because he has stated that the failure to disclose the SERP funding constituted a material breach of the agreement to provide ALL RELEVANT FINANCIAL DATA---bad faith. If the TWU signs off on the deal, they open themselves up for a bit of ugly business since by their own statements say they are aware of the deception.

How do we get past this? REOPEN the polls for 24 hours AFTER a 72 hour period during which anyone that did not have the opportunity to vote will be allowed to get their PIN number or anyone wishing to change their vote is afforded that opportunity AND 72 hours of a notice to hold the vote is posted. 7 days for everyone to be notified, to obtain the means to vote and then to vote. Require that AMR hold a press conference concerning their agreement to this timeline so that it will be carried by the media.

TWU is out from behind the legal predicament, the DIP financers will be able to rely on the validity of the labor agreements reached and everyone gets one shot at voting their conciense.