Arpey is sharing in the pain!

[Vortilon]

Who exactly do you think isn't going to be under some form of retention plan at another carrier?

I seriously doubt anyone of any quality would be willing to deal with the steaming pile of poo at AMR unless there's a significant financial upside for them. If you think the current executive team demands a lot, anyone worth bringing on at this point is going to be demanding something on the order of what Tom Horton got to come back from AT&T, and y'all complained about that if I recall...

Now that is a bet that I would take! The crew running this airline might be nice people; however, they put their pants on one leg at a time - just like you and I. There are PLENTY of well educated & experienced airline airline people that could get the job done.

 

[eolesen]

What ever happened to "Money isnt a motivator"? Funny how when we talk about the Executive Class rediculous amounts of money are required, more than most can reasonably spend, to "retain" them despite the fact that we have more MBAs per capita than any other country on earth but when we talk about working people some say that a pat on the back or working on new airplanes is more important than being able to pay your bills.

Whatever, Bob. I don't believe money is a motivator for someone who is already in a particular job. But there's not a lot of other means for convincing someone to leave a fairly comfortable position and come deal with the mess at AMR.

I'm at the point as an observer where I see AMR being in the same position Eastern was in back in 1986. Their problems aren't fixable without some watershed event like a bankruptcy or being bought out by another carrier.

 

[Boomer]

Whatever, Bob. I don't believe money is a motivator for someone who is already in a particular job. But there's not a lot of other means for convincing someone to leave a fairly comfortable position and come deal with the mess at AMR.

I'm at the point as an observer where I see AMR being in the same position Eastern was in back in 1986. Their problems aren't fixable without some watershed event like a bankruptcy or being bought out by another carrier.

As it currently stands: I see a strike occurring between the TWU and AMR due to a miscalculation by AMR of the dissconnect between the TWU International and the majority of their membership.

The situation at AMR is easily fixable but it would require that the Senior Management at AMR become transparent and honest in their dealings with the Employees at AMR versus doing deals with the Employees' Unions. The disconnect between the TWU Membership and the TWU Leadership cannot be understated: the TWU International owns Overhaul; the TWU is anathema to the majority of the Line Mechanics. As others have explained: the Line rules Operational Stability over any of the reportable periods, the Overhaul rules Operational Dependability over longer periods of measure. The TWU International and their friends in the Overhaul Locals cannot agree to any deal that keeps the AMTs almost dead last in compensation and motivate their workforce on the Line to give their best.

SWA ranks their order of accomodation as Employees first, Shareholders second and Passengers third: AMR, from my experience, ranks the order of accomodation as Senior Management first, Marketing second, Consultants third, Finance fourth, Unions fifth, Shareholders sixth and Employees seventh. The TWU International order of accomodation is Intenational Officers first, AMR second, Overhaul Local Leadrship third, Line Local Leradership fourth and the Membership fifth.

The mess at AMR is fixable: but, the is the will from Senior Mangement present to do what is required given that it could result in alienation of a pliable Union like the TWU International?

 

[FrequentFlierCA]

Have most of you been ignoring the airline industry this past decade? AA didn't lose $500 million because of Gerard Arpey. AA lost $500 million because it is not cost competitive. Like it or not AA's employee costs are too high relative to its competitors. And because it doesn't have very much pricing power (especially relative to more productive Southwest) it is forced to match everyone else's low fares while paying its employees more.

With the current (legacy) cost structure AA's best hope is quick economic recovery.

 

[Hopeful]

Have most of you been ignoring the airline industry this past decade? AA didn't lose $500 million because of Gerard Arpey. AA lost $500 million because it is not cost competitive. Like it or not AA's employee costs are too high relative to its competitors. And because it doesn't have very much pricing power (especially relative to more productive Southwest) it is forced to match everyone else's low fares while paying its employees more.

With the current (legacy) cost structure AA's best hope is quick economic recovery.

There it is folk!!!!!!!!!!!!!!!!!! The epiphany!
I understand it all now, the top managers sharing a few hundred million over the last few years, while I got $.41 an hour.

Executives sharing millions is a drop in the bucket.....
But it wasn't a drop in the bucket when the employees gave back a huge chunk of change in 2003...

Hey FFCA, try flying Southwest to Europe, China, Japan, South America, Caribbean, etc,etc,etc.
Please advise AA to just fly the 737 all over the world, maybe that will help.
Please advise AA to fly planes to Central America and Mexico, maybe South America and Korea and China for maintenance.

I wonder if Southwest's executives are more productive than AA's....Tell me, FFCA, how do you determine executive productivity? TIME NOT SPENT AT THE COMPANY PAID FOR COUNTRY CLUB?

 

[eolesen]

With the current (legacy) cost structure AA's best hope is quick economic recovery.

Yep. That seems to be AMR's strategy over the past decade -- wait for external factors to change vs. getting their own house in order... first it was hoping that other carriers would go bankrupt and liquidate, now it's waiting for someone else to re-set the bar for labor contracts and wishing the economy would improve....


That's where the true success is story at WN -- they've always focused on what's best for WN in the long-term, and both management and labor showed tremendous restraint when profits were huge. That paid off in spades when profits weren't quite so huge.

My suggestion remains that AMR's employees spend a little less time worrying about what they don't have, and a little more time worrying about how to come up with a sustainable business model that they can share in when things go well, and minimize the downside when they don't.

 

[FrugalFlyerv2.0]

... ... ... the top managers sharing a few hundred million over the last few years, while I got $.41 an hour.

Looks like a clear case of salary envy to me.

 

[Hopeful]

Looks like a clear case of salary envy to me.

There's another CLASS WARFARE defender right there, Ladies and Gentleman....
The fats cats at the top getting "theirs" at the expense of the "have nots.

BRAVO! Frugal, BRAVO.


Outstanding comment and observation.

I

 

[FWAAA]

Lots of ignorance and outright misinformation in this thread, beginning with Andrea Ahles, the author of the blog piece in the OP. It's funny how a second-rate reporter can whip everyone into a frenzy by publishing falsehoods and engaging in sloppy reporting. Facts no longer matter; all that matters is the ignorant rantings of the oppressed.

Arpey's personal allowance in lieu of the various named perks was $33,000 in 2009, not the $100k claimed by Andrea Ahles. From page 35 of the Proxy Statement:

(5) The amounts shown include a personal allowance paid in each of 2007, 2008 and 2009 of $33,000 to Mr. Arpey and $27,000 to each of Messrs. Horton, Garton, Reding and Kennedy. In order to reduce costs, we provide these personal allowances instead of perquisites commonly provided to executive officers of other public companies, such as automobile lease payments, club memberships, financial/estate planning fees and split dollar life insurance.

Amounts shown also include the estimated aggregate incremental cost to us of providing perquisites and other personal benefits to our named executive officers. These include the estimated aggregate incremental cost of the air transportation provided by us to each of the named executive officers and their family members. The incremental costs include the estimated cost of incremental fuel, catering, insurance, and reservation and ticketing costs, but exclude fees and taxes paid by the named executive officer for the air transportation. Amounts also include reimbursement for: (a) the cost of one annual medical exam, (B) the premium for a term life insurance policy (with a policy amount equal to the base salary of the named executive officer), (c) a portion of the premium for long-term disability insurance, and (d) broker fees associated with the exercise of stock options/stock appreciation rights by the named executive officer. Each named executive officer and his spouse were also provided an Admirals Club® membership (American Airlines’ travel clubs located at American Airlines’ large U.S. and international airports), airport parking, and some of them were provided access to events or venues sponsored by us or received reduced cost air transportation on other airlines, at no incremental cost to us. For Mr. Arpey, the amount shown for 2009 also includes $64,561 for the estimated incremental cost to us of providing personal security services to him and his family that we believe would be characterized under applicable rules as personal to him and his family.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc4Mzg5fENoaWxkSUQ9Mzc3NTY2fFR5cGU9MQ==&t=1

Nearly every public company pays for leased cars, country club memberships, financial/estate planning and split dollar life on behalf of CEOs and other top executives. So instead of paying for those items directly, AMR provides cash with which to pay them. Yawn.

 

[FWAAA]

The post quoted below from Hopeful was made in the quarterly loss thread; I wanted to respond to it, but not where it was off-topic:

Without referring to Webster,i would say the hypocrisy is claiming to "Share the Pain, Share the Gain."
They have not nor do they continue to share the pain, only the gains...

Amazing how their "contracts" are iron clad.

You and others have made this same claim numerous times in this forum. Maybe hundreds of times. The facts don't agree with you. The greedy executives have seen their total compensation chopped by about 35% from the level they expected over the past 10 years.

From page 26 of the Proxy Statement:

For the ten years 1999 through 2008, their total realized compensation was only approximately 65% of the total targeted compensation awarded to them during this period.

http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9Mzc4Mzg5fENoaWxkSUQ9Mzc3NTY2fFR5cGU9MQ==&t=1

Granted, it's easier to suffer a 35% reduction in your expected pay when you're one of the several top-paid executives in the organization, but to continually claim over a period of years that the execs have not "shared any of the pain" is a gross distortion of the facts. If you're holding the high ground, why constantly misrepresent the facts?

The compensation committee of the board intended to pay Arpey and the other greedy execs about 55% more than they actually got over the past decade. That's not sharing some of the pain? Yes, your concessions have been massive and painful. But Arpey and the other executives are sharing roughly the same concessions (in percentage terms) as the rest of you.

In many ways, Arpey's pay is exactly how executive pay is supposed to work. He gets a base salary of $669k which is supposed to represent just 15% of his total target compensation. The rest of it (the other 85%) is variable and depends on company profitability and the stock price performance. For a couple of years there, the PSP plan payouts were substantial, as AMR stock outperformed all other comparable airline stocks during the same period. This year, the PSP payouts were meager, as AMR stock was near the bottom in performance compared to the others.

Yes, the worthless union failed you. It failed to negotiate any reasonable upside payout for you. And for that reason, Arpey is the devil? Because he didn't fail to negotiate a contract that rewarded him when things went right? The real shame is that the worthless union is probably going to make the same mistakes again. Probably send the membership another concessionary contract that fails to contain any meaningful upside potential. And sometime in the next several years, AMR stock will probably outperform all others again, meaning that Arpey and the other greedy execs will share another couple hundred million in PSP gains.

 

[eolesen]

Hmmm. Facts. That means you're about to be (re)branded as an apologist and management defender any moment.

I came to the conclusion long ago that few here are interested in facts which deflate breakroom myths. I'm glad to see the $100K broken down into what it really is. But I doubt any of the union guys are going to think any differently about the situation. All they know is they took pay cuts, and need to be able to burn someone in effigy for their pain.

Someone posted about transparency earlier. Funny part is that executive compensation has been one of the most transparent issues in labor relations since publicly traded companies' SEC filings started being published on the internet. Even before Al Gore invented the web, it was all available to see on a proxy statement if you were a shareholder or requested a copy of the proxy.

 

[Hopeful]

And do you know why it's transparent?
Because these guy have no shame,,,,,,they could care less what anybody thinks come their payday..They are better than anyone beneath them no matter how you much you defend them.


Just remember how many white collar criminals are sitting in jail cells as we speak. You know, Eolesen's, FWAAA, FFCA and frugal flyers corporate heroes?

(BTW, I'm starting to wonder why the above mentioned individuals' post always seem to come in groups.......Hmmmmmm)

Excuse me while I get my violin out and sing dirges because Arpey and Co. haven't been getting what they've been accustomed to.......

Give me a minute, to compose myself.

 

[FWAAA]

Just remember how many white collar criminals are sitting in jail cells as we speak. You know, Eolesen's, FWAAA, FFCA and frugal flyers corporate heroes?

Yes, when you're out of facts, claim that imprisoned white collar criminals are my heroes. 😀

(BTW, I'm starting to wonder why the above mentioned individuals' post always seem to come in groups.......Hmmmmmm)

And others wonder why you and Bob and Informer and a few others always tend to post in groups. Hmmmmm. 😀

Excuse me while I get my violin out and sing dirges because Arpey and Co. haven't been getting what they've been accustomed to.......

Give me a minute, to compose myself.

Nobody's asking you to feel sorry for Arpey and the others; I'm merely pointing out that the execs are working under approximately the same percentage concessions as you, contrary to your continued insistence that only the represented employees took concessions and contrary to your repeated assertions that the executives are sharing none of the pain and constantly share only the gains.

"Shared pains, shared gains" is a dumb slogan, but it has been an accurate description of everyone's compensation at AA over the last several years.

 

[FWAAA]

Hmmm. Facts. That means you're about to be (re)branded as an apologist and management defender any moment.

AApologist? Management defender? Try worshipper of imprisoned white collar criminals. 😀

I've been labeled an apologist and management defender for over nine years between this forum and PlaneBusiness. 😀

 

[AANOTOK]

All I can say FWAAA is you fit nicely right up there on Wall St.
There is a huge difference in my concessions and a a person who makes millions.
That is exactly what has this country and company spiraling downward.
You white collar folk either don't care about reality or haven't a clue.
You are like watching a politician running for office.