AA Management Returns Shares

[WingNaPrayer]

You seem to be forgetting that these stock incentives are in [EM]addition[/EM] to their big fat salaries. While you are being asked to give up percentages of your salary....management sacrifices [EM]nothing...their [/EM]paychecks remain untouched.

 

[WXGuesser]

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On 1/5/2003 5:07:16 PM Hopeful wrote:

Easy there, WXGUESSER! I don't think most employees belittle upper management for their extra compensation and "bennies." I do think however that when management gets too greedy and makes poor decisions, they should admit to it and not just point to labor as their woes. If these greedy managers had no unions to deal with, airline workers would probably be a hair above the requirements needed for food stamps. Just like I don't think a professional baseball player should not make hundreds of millions of dollars over many years, the average fan who most likely has to charge the tickets and limit himself to one hotdog doesn't care about that ballplayer's salary. Trouble is that in order to pay the ballplayers' higher compensation, the price of ticket most likely goes up. Not the same in the airline industry.
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[/blockquote]

I must respectfully disagee; I think most employees belittle upper management for their pay and bennies (there are plenty of folks similar in mindset to WNP who work for American), simply because they are so much greater in comparison to theirs. "Why should that so-and-so make so much money when I'm the one down here busting my hump." etc. I would bet that a majority of line employees feel upper management are overcompensated. But you know what? That's what line employees feel in pretty much *ANY* business, anywhere. So that's entirely irrelevant.

I do agree that if it were not for unions, the employees would be paid WalMart level wages. That's because it is in a business's best interest to pay their employees as little as is possible. Fundamental fact: Businesses exist to make money. (If nothing else, please remember that!!!) Therefore, the less money they have going out the more money they make.

The reason that management points the finger at labor is that it is one of the few things in their costs that they can theoretically control. They cannot control the costs from their suppliers, or a lot of other aspects of their overhead. So they point the finger at labor and say "There is our problem". Is it true? Entirely, no. But airline employees for the most part are pretty darn well compensated.

I am very much in favor of stock-incentive programs for management. It gives them an incentive to make the company as profitable as possible. I do not believe that employee stock-incentive programs are a good idea, because the line employees are not the ones making the decisions, so they do not have sufficient input or effect on the operation as individuals to make the decisions or authority necessary to enhance profitability, in reality only management can do that.

I think American's Management has done one of the better jobs of any of the hub-and-spoke carriers in trying to cut things and patch other money leaks before coming to labor and asking relatively nicely. Are there other things that can be cut? Sure. Should the employees forgo their pay raises? Not for me to say. I am on furlough, and my (Union -- TWU) job classification is in the process of being strong-armed into being contracted out. So it will very soon be irrelevant for me. But there are a lot of good people at American who I would like to see keep their good jobs. I think management and labor need to pull together and work together to get this airline through this difficult time, even if both sides have to give up a little.

Peace!!!!

 

[flygal4500]

I don't know the exact URL, but the description of the performance shares is all in AMR's proxy, which is on the investor relations page at www.amrcorp.com. As I understand it, senior managers are given performance shares if certain conditions are met -- profits (hah!), comparison to other airlines, and some kind of return calculation (either return on investment or return on assets). The company owns the shares until they're "given" to the senior managers (I believe this is 5 and above).

 

[lownslow]

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On 1/6/2003 9:15:30 PM WingNaPrayer wrote:

You seem to be forgetting that these stock incentives are in [EM]addition[/EM] to their big fat salaries. While you are being asked to give up percentages of your salary....management sacrifices [EM]nothing...their [/EM]paychecks remain untouched.
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[/blockquote]


Of course, that ignores the fact that there is a very distinct reason why there was and is so much emphasis on stock options. It used to be that managment salaries were far more bloated than they are now. Then there was a big backlash that executive compensation was excessive and not tied to the performance of the company. Many liked to point to Japanese firms where the top execs got lower salaries (but total management costs were much higher).....

So, to tie exec salaries to company performance, there was a big push towards tying it in with the stock price, or providing stock options instead of salary (I'll omit the social commentary on the ethical effect this may have had). So, in a sense, management pay has been scaled assuming that there will be some sort of stock option bonus. So, sure, they gave up something labeled a "bonus", but would you rather have it the old way, when they just got much fatter salaries without any relation to the company's performance? I think not.

 

[WingNaPrayer]

[P]
[BLOCKQUOTE][BR]----------------[BR]On 1/6/2003 8:49:58 PM flygal4500 wrote:
[P]I don't know the exact URL, but the description of the performance shares is all in AMR's proxy, which is on the investor relations page at www.amrcorp.com. As I understand it, senior managers are given performance shares if certain conditions are met -- profits (hah!), comparison to other airlines, and some kind of return calculation (either return on investment or return on assets). The company owns the shares until they're "given" to the senior managers (I believe this is 5 and above).[BR][BR][/P]----------------[/BLOCKQUOTE]
[P]Actually, I believe it's 7 and above.[BR][BR]The URL for the proxy pages (and this is NOT light reading - but if you're truly interested, you'll take the time and go through it) is [A href="http://www.amrcorp.com/investor/2002amrproxy.pdf"]http://www.amrcorp.com/investor/2002amrproxy.pdf[/A][BR][BR]There is a lot of legal speak, and a lot of fine print but anyone with an ounce of common sense will be able to make out exactly what the compensation packages are all about.[/P]