AA Management Bonuses - Despite More Losses

[TWU informer]

Blah, Blah, Blah,

The Management defenders attempt to pass these bonuses off as nothing, but it seems it was enough to use as a media report that cost are still a problem regardless of fuel prices. What if the report read, "Revenues Rise, and Management Cancels Bonuses to show good faith in the Pull Together Win Together Program"?

J P Morgan analyst raise loss predictions by .46 per share, but this is of course nothing since it relates to management bonuses.

I sicken with the fuzzy math accounting attempts to defend management bonuses nearly as much as I despise the TWU stooges climbing in bed with management and claiming we can trust them.

Go ahead, defend the management bonuses with your fuzzy accounting and fairy tale stories. I will continue to wish for my Paid Holidays and Sick Time back.

Management Bonuses = Nothing to Fret About

Union Concessions = Best Thing Since Sliced Bread

The Report was Regarding the Fourth Quarter not April of next year that some would have us believe.

REMEMBER, Nothing should be made of management bonuses.

 

[AMFAMAN]

REMEMBER, Nothing should be made of management bonuses.

Well of course not, these 1998 bonuses came as a result of the 6 year raping we took in 1995. We were suppose to forget about that by now.

 

[MCI transplant]

I haven't read the filing, but if it's related to stock options, what isn't mentioned in the statement is that those options were issued at $19-$30 per share (depending on the year), and they've been so far underwater that nobody in their right mind would think of exercising those. My last set of manager options were granted at $21/share.

So, knowing that your options were issued at $5 out of pocket, and ours were issued at $19-30 out of pocket, do you still think it's worth getting all excited about?

L5 and up managers have always had a variable compensation component that was tied to stock performance, and paid out in the form of stock options. That's money that doesn't appear in our paychecks, and it's a pretty well known fact that AA management is underpaid when compared to just about every other airline except United. Even US Airways and America West pre-merger were paying their managers more, mainly because they couldn't really offer variable compensation and be taken seriously.

The other form of variable compensation is tied to operational and financial performance. AA managers haven't seen any payouts on that in many years (and rightfully so), unlike our peers at some of the bankruptcy sisters who still got performance bonuses while the ship was sinking (which was entirely inappropriate under any excuse)...

<_< Mr. Former ModerAAter----- Again you have to read what you didn't say, as to what you did! Even though managers opinons may be set higher than ours,the total number of said opions may be two, or three, or more, times that of Contract people!!!!

 

[TWU informer]

<_< Mr. Former ModerAAter----- Again you have to read what you didn't say, as to what you did! Even though managers opinons may be set higher than ours,the total number of said opions may be two, or three, or more, times that of Contract people!!!!

What?

You mean I will not be getting $2 or $3 milllion worth of common shares for Christmas this year?

SO!

We are going to "Pull Together" and "Win Together", but management will do very little pulling and yet most of the winning goes in their pockets?

What a great deal!

 

[goingboeing]

Stock performance is totally driven by Wall Street's perception of the company, so it's not the company's to give back. Plus, all employees had the opportunity to benefit from owning stock. It's not management's fault if you chose to dump your options at $10 or $12 a share.
The LTIP's terms are found on Edgar.SEC.Gov so feel free to go thru the 1998 annual report filing and you'll gind the terms.

Again, y'all are making a lot more out of it than it really is, but that's your choice.

Who has the biggest effect on Wall Steet's perception of AMR? The very people who have the huge stock option packages make the decisions that have a major effect on the stock prices.
It is flat morally wrong to compensate upper management with the very thing in which they can affect the value of.
I bet AMR stock will not be valued as high in the spring of 2006 when the "commoners" can exercise their options.

 

[Connected1]

We are going to "Pull Together" and "Win Together", but management will do very little pulling and yet most of the winning goes in their pockets?

What a great deal!

Here's an idea...trade some work rules and guaranteed pay for a performance plan of your own and next time we can all bathe in the imaginary money that hasn't been paid yet.

 

[TWU informer]

Here's an idea...trade some work rules and guaranteed pay for a performance plan of your own and next time we can all bathe in the imaginary money that hasn't been paid yet.

How about instead, you become required by law to join and pay dues to a worthless company union. Have concessions negotiated for 20+ years, then give away $15,000.00 per year in pay and benefits without a valid ratification vote, and you will get your 500 or less shares of stock at $5.00 per share strike price, and then we can really say we "pull together, and win together"?

In other words, Connected1, you take our pay and workrules structure, or we take yours. Which is it?

I would gladly forfeit the worthless union and unproductive work rules for your compensation package, a performance plan, and the so-called imaginary money. How many square feet is your house, how many vacation days do you get, how many paid holidays, how many paid sick days?

Hey pal, I didnt create these accounting rules to pay imaginary money. I simply posted the media report and have a complaint with management bonuses, imaginary or not, they appear to be effecting the bottom line.

Your panties can get in a wad on a level never seen before, but I will still complain about management bonuses until all concessions have been returned to the grunts of the company.

 

[eolesen]

I don't think you would want or even could handle our workrules, Dave.

We all made our choices when we filled out our job application.

Y'all are more than happy to take the benefits that being union represented offers you, i.e. layoff by seniority, $12.5K payouts for being bumped out of your station, etc., but spend endless hours bitching about the downsides of union representation, i.e. your leadership.

So, don't begrudge what few benefits management happens to get.

And, as a matter of published fact, management employees at all levels got fewer than 300 options in the 2003 restructuring. Union employees and agents/reps got more options per employee.

Since the LTIP is only for key individuals, I can't say how many shares any one individual got vs. others, since it is tied to the overall risk of losing that employee, and not on a step scale. When someone in capacity planning or RM leaves the company, they take years and years of proprietary knowledge, and more often than not, they're leaving AA to join a competitor. Keeping that knowledge inside the company and out of the competition's hands comes at a price.

If you think that's really a joke, here's an example. A few months back, some of you were talking about how UAL got the Toyota contract, and how AA really f***ed up by not getting that contract to support the ORD-NGO route. What's probably not as well known is that UAL has been raiding a lot of people from AA Sales all across the country.

Someone who hired in with me was recruited last year, and from their first day at UAL, has been expected to disclose lots of details which were part of various corporate sales agreements with companies in the midwest, including several auto manufacturers. While this person didn't come out and mention Toyota when we spoke prior to UAL getting the contract, it was pretty obvious that UAL wanted to steal back corporate accounts that they'd lost to AMR. Bad enough that they were willing to pay five figure signing bonuses to get the right people to come over.

The cost of keeping this person at AA would have been negligible. The lost revenue (and jobs?) isn't quite as negligible.

So, go ahead and scoff all you want about how incompetent AA management is, and how we shouldn't be paying anyone a dime in retention to a bunch of bootlickers, but it's a fairly serious issue once you get your head out of your arse and realise there are hundreds of people at AMR with very specific knowledge that can be worth millions to UAL, CAL, NWA, DAL, Jetblue, Frontier, Airtran, and even Southwest.

 

[ELP_WN_Psgr]

Merry Christmas to all.

Since I am not a regular AA poster I will be brief.

I find it somewhat unconscionable that AA's management is taking bonuses with one hand while extracting concessions from employees with the other.

It doesn't matter much that their bonuses are tied to stock price, the tide, lunar phases, or how many vehicles are in the WalMart parking lot. The bottom line is they are taking from employees and redistributing to themselves while continuing to make boneheaded decisions that cost the company money.

Here's an example. AA's management would rather make a point than make money and has elected to head out to Love Field and take WN on between Dallas & KC/St Louis.

It doesn't matter that it makes no business sense to do so nor does it matter there is a snowball's chance in hell that they will earn a profit. They've painted themselves into a corner with the media and, By God, they are not about to be proven wrong.

By my conservative estimates I figure AA will lose somewhere around $25MM a year on the flights they have announced.

If you took that loss and divided it by the number of full time employees, everyone would get an additional $282 annually.

While that sum might not interest management....who have their bonuses already, thank you very much, an additional $282 a year would have meant $282 less on the Mastercard this Christmas.

 

[TWU informer]

Thank You ELP_WN_Psgr


Couldn't have said it better myself.

They just dont get the part about returning concessions before taking their bonuses.

They never have gotten it, and they never will get it.

 

[Connected1]

I find it somewhat unconscionable that AA's management is taking bonuses with one hand while extracting concessions from employees with the other.

First of all, nobody has taken anything yet.

Second, the performance unit payout is not "extra" or "discretionary" money. Management gets paid a fixed salary and an incentive compensation component, the sum of which is their total, normal compensation. For those who were granted these performance units in 2003 (which, I remind you, are not scheduled to pay anything until the spring of 2006), incentive compensation has been virtually nonexistent in the last few years. That means that the lion's share of our most senior and valuable management employees have effectively gone without 50% of their compensation.

This pay cut, unlike those of other labor groups, had nothing to do with the market value of their services. Instead, the pay cut was a tradeoff between guaranteed pay and incentive pay. The incentive pay was not guaranteed. Had management made the wrong moves, they would have gotten paid exactly what their decisions were worth - $0. Fortunately, management has made a lot of good decisions over the past 3 years. They will be paid for the product of those decisions.

As I said, if anyone else wants to stake 50% of their pay on the quality of their work, step right up. But let's not pretend that the performance unit plans are discretionary payouts that steal out of one person's paycheck to pay another.

 

[Hopeful]

Let's not forget when we, TWU members, took a 17.5% paycut in wages alone, management used a formula that came out to be about half what we took. Why is it acceptable for management to reap more benefits than the rest of us?

I think the only thing management should get is more in terms of salary. You move up, you make more!
But when you start getting into obscene salaries and perks and stock options for the top dogs, how do you defend that?

Don Carty exemplified how management views the average worker. He secured the SERPS for himself and the upper class at AMR while threatening bankruptcy unless we cave in to concessions.

So ARPEY and CO. are set to reap some heaty rewards if certain performance targets are met.

Why not the rest of us SHARING in the good fortune.

And please don't mention the stock options that we have and how much above the $5 strike price AMR is at now.

We should have received a few thousand shares of stock like the big boys and girls get?

And if you want to reward this wondeful management team for their working hard to keep AMR out of bankruptcy and their tough postion in making tough choices, remember that the worker on the floor has to live with these decisons and make it work!

 

[operaations]

I don't think you would want or even could handle our workrules, Dave.

We all made our choices when we filled out our job application.

Y'all are more than happy to take the benefits that being union represented offers you, i.e. layoff by seniority, $12.5K payouts for being bumped out of your station, etc., but spend endless hours bitching about the downsides of union representation, i.e. your leadership.

So, don't begrudge what few benefits management happens to get.

And, as a matter of published fact, management employees at all levels got fewer than 300 options in the 2003 restructuring. Union employees and agents/reps got more options per employee.

Since the LTIP is only for key individuals, I can't say how many shares any one individual got vs. others, since it is tied to the overall risk of losing that employee, and not on a step scale. When someone in capacity planning or RM leaves the company, they take years and years of proprietary knowledge, and more often than not, they're leaving AA to join a competitor. Keeping that knowledge inside the company and out of the competition's hands comes at a price.

If you think that's really a joke, here's an example. A few months back, some of you were talking about how UAL got the Toyota contract, and how AA really f***ed up by not getting that contract to support the ORD-NGO route. What's probably not as well known is that UAL has been raiding a lot of people from AA Sales all across the country.

Someone who hired in with me was recruited last year, and from their first day at UAL, has been expected to disclose lots of details which were part of various corporate sales agreements with companies in the midwest, including several auto manufacturers. While this person didn't come out and mention Toyota when we spoke prior to UAL getting the contract, it was pretty obvious that UAL wanted to steal back corporate accounts that they'd lost to AMR. Bad enough that they were willing to pay five figure signing bonuses to get the right people to come over.

The cost of keeping this person at AA would have been negligible. The lost revenue (and jobs?) isn't quite as negligible.

So, go ahead and scoff all you want about how incompetent AA management is, and how we shouldn't be paying anyone a dime in retention to a bunch of bootlickers, but it's a fairly serious issue once you get your head out of your arse and realise there are hundreds of people at AMR with very specific knowledge that can be worth millions to UAL, CAL, NWA, DAL, Jetblue, Frontier, Airtran, and even Southwest.

Well put. but I am sorry to tell you that TWU and all of the other closed minded union people never took the time to read your post. The do not want to understand the cost of doing business in rm or capacity planning. I completley understand his anger. I too want my money back I too want my holidays back, I too wish i was getting a raise but I also understand why upper management is getting those bonuses.

I have a question to ask TWU. how would you post if the very people you bash were given o bonus compensation and were then recruited to the other carriers (UA, NW, WN, DL.....) and AA starts to lose more market share. Lose routes. Lose more money and more concessions are needed to stay open. I think you would then blame Management for that one also.

 

[Connected1]

But when you start getting into obscene salaries and perks and stock options for the top dogs, how do you defend that?

You compare their salaries and perks and stock options to their peers.

Why not the rest of us SHARING in the good fortune.

The "rest of us" elected not to trade salaries for incentive compensation (other than AIP) in 2003. The "rest of us" had their chance.

 

[Wretched Wrench]

All of this would be less difficult to swallow if we had not hear such things as:

"Shared Sacrifice"

"Leadership by Example"

"Pull Together, Win Together"

And so forth. I'm sure there are many more.

If they just would say, "We are the makers of the big decisions and we deserve more rewards.", the bitter taste in my mouth would be less so, and I would not feel lied to or patronized.

Few of us have any problem with the suits making their salaries, but all the little semi-hidden back door extras really rankle. More so when yet another is uncovered. But since the uncovering of the SERP retirement slush fund, they have come to learn that they can get away with anything.

One wonders what else will be revealed, and what stays hidden.

.