Douggie Cashes Out

[Barbell]

Simple - if you have been here long enough you don't get an increase. Understand? No raise.

So, how long does one have to be here to stop receiving a raise within the pilot group? And at that point, on average, what is said pilot making per hour, ballpark of course since you guys aren't really "hourly" per se?

 

[HPearlyretiree]

Everyone doesn't share your bliss.

Not bliss, just common sense, enough not to guzzle the union kool-aid.

 

[Dog Wonder]

Not bliss, just common sense, enough not to guzzle the union kool-aid.

The union usually serves beer.

 

[pilot]

So, how long does one have to be here to stop receiving a raise within the pilot group? And at that point, on average, what is said pilot making per hour, ballpark of course since you guys aren't really "hourly" per se?

Southwest 737 Captain: 192.00 per hour

America West Captain: 140.00 per hour

US Airways 737/320 Captain: 125.00 per hour

Top of pay scale for longevity is 12 or 15 years.
No active pilot on the East has less than 20 years.

Can't speak to the West side regarding longevity.
Next scheduled raise for the East pilots is in 2010.

Ball park hourly figures but very close. Southwest doesn't pay by the hour but that rate is the equivalent base on hours flown per month. FYI.

pilot

 

[tokerboy]

That's what was negotiated into the contract, and what was figured into the company's budget.

Holy Smokes!! I think we found the Smuck that makes the Kool-Aid!

 

[BoeingBoy]

East pilot contract (don't know about the West)....

So, how long does one have to be here to stop receiving a raise within the pilot group?

11 years to reach top of scale - after that no automatic annual raise. Since the junior working pilot on the East side has been here about 17 years, no East pilot is getting annual raises.

However, IF we had more junior pilots, the amount of each years raise is about the same in dollars ($1 and change) for all equipment/positions, so the percent varies from about 0.6% for the highest paid (A330 Capt) up to 1.5% (737/A320 F/O). Not near the 3% average that was just announced for "management".

And at that point, on average, what is said pilot making per hour, ballpark of course since you guys aren't really "hourly" per se?

Not sure what you mean by "ballpark". Per flight hour, the one's that have been here the least number of years (737/A320 F/O's) make in the mid-$80's. Given that they're on reserve, you can probably reduce that by over half to equate to a regular "hourly" worker - pay per hour actually on duty - so call it $40 or less.

Of course, the other contracts would specify how long to reach TOS and how much the annual raise is until TOS is for each group.

Now, if the point of your question was to show that we pilot's are paid well compared to the average hourly employee you'll note that I didn't claim otherwise. I DID dispute the position that union people also get raises every year so why the fuss about "management" getting their 3% annual raise.

Using myself as an example, the last "automatic" annual raise was in 1990 when I reached TOS.

Jim

 

[FWAAA]

Although DP's cash-out didn't take any money out of LCC, it did cost LCC one way or the other. When he exercised his options, LCC had to sell him 272,000 shares at below-market prices.

Either LCC sold him new stock or it went out and bought it on the open market to sell him (WN has been doing this for quite a while now - spending real money to buy stock to satisfy employee option requirements).

If LCC bought this stock on the open market to fulfill these options, then it cost LCC millions. If it issued new stock, then that represents foregone money that LCC could have had.

Either way, don't fool yourselves - this compensation came from the hides of the current shareholder - ALL option compensation does.

Saying that it didn't cost LCC any money since he sold the newly acquired stock on the open market to outside investors is not quite accurate.

 

[flynomore]

To expand on the real cost of options.

My company has 100 shares of stock and using whatever corporate valuation model you choose is worth $1000. Dividing 1000/100 gives us a per share value of $10.

If we offer our new CEO options of 100 shares at a strike price $10, then our company's per share value is less since there are no longer 100 shares outstanding but potentially 200. So is the current shareholder value now $10 or as little as $5? It depends upon the restrictions placed in the options.

Let's say the company's enterprise value increases to $2000 making our per share value now $20. Our new CEO decides to diversify his holdings by exercising all of his options. Now there are 200 shares outstanding and the enterprise value is unchanged at $2000 making a per share value once again $10.

Did this cost the company any money? Did it cost the shareholders?

The company could have sold 100 shares in the market and gained the full value, but gave that as compensation to our new CEO, so there is an opportunity cost.

The shareholders saw the value of their share drop from $20 to $10.

Even with this simple example, to say that there is no cost to the company of options is wrong.

 

[luvn737s]

I was one of them, but, I didn't lose any real money, as I was able to write it off on my income tax due to the fact that I had to buy it.

A tax deduction isn't the same as a tax credit. You softened the blow by about 28%, but that's about it.

 

[Career Reserve]

You're right, its time for Labor to start to demand rather than continue to be victims.

Who, on the East is standing up for the f/a's and demanding?
Didn't the East just give the West shares in the Flt Attendant profit sharing which is cost neutral to the company?
Believe me the West deserves a lot because they helped the company make the millions.
They deserve their own portion of the profit sharing pie, not the East's portion from concesionary givebacks. :down:

 

[PITbull]

Who, on the East is standing up for the f/a's and demanding?
Didn't the East just give the West shares in the Flt Attendant profit sharing which is cost neutral to the company?
Believe me the West deserves a lot because they helped the company make the millions.
They deserve their own portion of the profit sharing pie, not the East's portion from concesionary givebacks. :down:

Yup. The East MEC voted to share the East f/as profit sharing portion with the West f/as even through the provisions are not merged, nor is their a tentitive transition agreement, nor are the two operations merged. The knucklehead MECP is suppose to put out on an E-line what had occured, but I think he's thinking long and hard for a real good exc.."spin" he can conjure up.

Doug should have been forced to provide a West Profit sharing for their $68 Million of that $314 million quarter profit and should have been nogotiated with the WEST MEC. $214 million came from the operation on the East, the rest ($68Million) on the West. That $68 million portion is what managment should be appropriating at the end of the year for the West labor groups; not the east's portion...that was directly related to the $1.083 billion East gave in concession #3.

I'll bet the the MECP will be spuing some BS about invols receiving longevity for pay purposes (even though they sit a the bottom of the seniority list over there) and the AWA f/as approving that in exchange.

My answer to that crap is does that longevity come from the AWA West pay checks, or is the company paying for the longevity for the INVOLS?????

 

[Career Reserve]

To expand on the real cost of options.

My company has 100 shares of stock and using whatever corporate valuation model you choose is worth $1000. Dividing 1000/100 gives us a per share value of $10.

If we offer our new CEO options of 100 shares at a strike price $10, then our company's per share value is less since there are no longer 100 shares outstanding but potentially 200. So is the current shareholder value now $10 or as little as $5? It depends upon the restrictions placed in the options.

Let's say the company's enterprise value increases to $2000 making our per share value now $20. Our new CEO decides to diversify his holdings by exercising all of his options. Now there are 200 shares outstanding and the enterprise value is unchanged at $2000 making a per share value once again $10.

Did this cost the company any money? Did it cost the shareholders?

The company could have sold 100 shares in the market and gained the full value, but gave that as compensation to our new CEO, so there is an opportunity cost.

The shareholders saw the value of their share drop from $20 to $10.

Even with this simple example, to say that there is no cost to the company of options is wrong.

The only part of your message that makes sense is the last sentence.
You're trying to compare book value with market value. Big difference.
Dougie may say he is diversifying, however he is cashing in. The stock may be overvalued. Him selling will have little impact on the stocks valuation in the market other than a near term blip.
It does cost the company money, just like any other form of compensation.

 

[PITbull]

The only part of your message that makes sense is the last sentence.
You're trying to compare book value with market value. Big difference.
Dougie may say he is diversifying, however he is cashing in. The stock may be overvalued. Him selling will have little impact on the stocks valuation in the market other than a near term blip.
It does cost the company money, just like any other form of compensation.

Actually, flynomore makes perfect sense in his/her entire example. That is exactly how the cause and effect works with execs stock distribution, cash out, and Company outstanding share value for the open market and those holding shares.

PITbull,

Am I to understand that US AFA GAVE AWAY something that was a bargaining chip?

Do I have this right? AFA east contract called for profit sharing and HP's didn't?

If that is the case then tough luck for HP or put something on the table for all FA's.

Tell me I'm wrong? Because if the East MEC gave away a dime with nothing in return then they should ALL be recalled.

Bob,

I hate to tell you....but that is correct.

The only monetary provision that gave the East f/as some return from just concession #3...going into the future to 2012 was the profit sharing.

That's just been diluted from an East MEC vote back in January 2006 by adding 60% or all of AWA West in the same provision portion that belonged to the East. West didn't have a provision, basically, their CEO had nothing for the employees on the West. I believe that ALPA may have voted to share their stock portion with the West pilots too. But I am not sure if that is accurate. I don't know what the IAM did or if they had profit sharing since the judge abrogated their agreement and instuted the company proposal that they voted on and ratified. I believe CWA had a profit sharing as well, and I am not sure if they were compelled to share it along with AFA East.

I can't wait to see what the MECP is going to write in an e-line explaining this.

He said he would explain it, but I'll believe it when I see it, cause i don't think this is going to go down very well...and I bet he's going to have to put a major "spin" on the issue. From my understanding, he didn't explain the issue very well to the East MEC before the vote.

If it were me, I would have voted NO. And threw it back at Dougie make him provide a provision for profit sharing. Hell, while in BK, the company took away our option to choose stock options. That left nothing BUT the profit sharing language. The MEC voted to ensure that we got something in return for taking away the stock provision. The f/as received 9 months of medical coverage while on any leave of absence (medical etc..) First sick call for the year paid in FULL with no 30% reduction penalty, and f/as on disability could fly non-rev once a month vs. just twice while on LTD. ALWAYS, get something back, or forget it...we had leverage because they couldn't get investors to invest unles all groups agreed to give up the shares. That is why flynomore's easy example above is completely correct.

There are NO increases for the East f/as in wages until 2012 and if it gets negotiatied timely. If history is any indicator on the timeline for negotiating wages, I don't see this happpening until 2015.

 

[BoeingBoy]

I believe that ALPA may have voted to share their stock portion with the West pilots too. But I am not sure if that is accurate.

Your belief is accurate - the Transition Agreement language on profit sharing is exactly the same as LOA 93 except that the TA includes both East & West pilots.

Jim

 

[PITbull]

Your belief is accurate - the Transition Agreement language on profit sharing is exactly the same as LOA 93 except that the TA includes both East & West pilots.

Jim

Do the pilots know? Why did they dilute their shares too or is it just the profit sharing toinclude more pilots on the West...is this a new TA transition provision, or did it happen towards the end of BK?