Execs Dumping Stock

Bob...

I do agree with you on many aspects of what you say. There is definitly a shift in how we (as a company) act or react. My personal feeling about working a problem from the "top down" is that you've never given the low-mid level employees the chance to do what they are here to do, try to solve your problem. Instead you rush to the top, to the person least likely to fully understand the problem. It has been my experience that the higher up the ladder you go, the more the processes become "high-level" or conceptual and less likely to know the "real" heart of the issue. If every customer worked with your philosophy, then there would be no need for low-mid level employees and high level employees would spend all their time corresponding to customer issues. Not to say there aren't things that don't require escalation to a higher level.

I totally agree with the 4 points that you made. The differences between the CCY group and the Tempe group are vast. I honestly don't think that was always the case. Some of the projects that I have been involved with showed a tremendous differnece in how AWA was much more proactive in handeling customer issues before the customer had an opportunity to log a complaint. In my opinion, the entire "upper level" is mired down in trying to get the integration complete. Every department is working on a very aggressive timeline. The faster they can get the two companies fully integrated the lower the overall costs of operating the company go. With fuel prices at such high record levels, every missed deadline puts those synergies and savings that much farther away. Knowing that every single thing in the integration of the company are tied to something else, a delay in something like the web launch could have a ripple effect that could cost much more then the problems the initial launch of a sub-par product would. Was there time to wait out a beta test of the new website? If we launched a beta test of the web an waited another 6 months to a year, how would that have effected other areas of the company and their ability to integrate?

The pressures to get this integration done quickly to drive down costs is tremendous. You can't go back to the employee well for additional concessions to make up for fuel costs, so you have to find those savings where ever possible. I honestly don't think it is about securing bonuses for "on time" work, but it is much more about driving down costs.

The whole lack of communication thing, you are dead on. We have seen a tremendous effort on the part of the company to try and communicate with employees. The level of communication between the company and the employees have improved tremendously since the CCY days, but still needs some work. The hardest part is that you still have East Policies and West Policies, East/West systems, East/West thinking, etc. As we push forward with the integration, most all of that goes away. But how we communicate with our customers is something totally different. In my opinion, we coul dhave done a better job of communicating with our customers. What would have been the problem with sending an e-mail to all our DM/FF members regarding the website change? After we knew there were issues. Why not follow up with a way for the customer to communicate issues quickly and easily, while offering alternatives for them to make purchases. Why not put out a letter stating that we realize that the web functionality is not what we expected it to be and we would be waiving all service charges for cusotmers that would have to book on the phone or at the ATO for 45 days. Asking the customer to "pardon our dust" and own up to the fact that the cut over wasn't what it should have been.

As for synergies.....there are plenty and many are transparent to the customer, for the most part. Such things as increased aircraft utilization and reducing unprofitable flying is huge. Then add in facility consolidation, reduction in redundant positions, closure of facilities like CCY, etc and they have been able to realize some real gains. When will we get to the real meat and potato issues that are more visable to the customer? Very soon.

The issue of Customer Relations is dead on also. The CR department is a constant hire mode to try and help address the influx of customer issues. I am not sure they were fully prepared for everything they bit off when they started eatting this apple. My single complaint would be that we see more and more of "how the west" does things and less looking at both policies and procedures to find the "best" solution for all involved.
 
Two bankruptcies in just over three years at USAir which wiped out the common stock of executives and worker bees alike.

Can you blame these guys for wanting to fleece other investors by cashing out some of their LCC stock just in case it happens a third time?

These stock sales are a complete non-story. Management makes more money than us and is now selling its stock to other suckers who think it's headed to $100/share.

BFD.

Senior top execs were given stock options when USAirways emerged from BK. They didn't pay for it, they were granted it. For those of you who were not on U East and are not part of a unionized group, Labor was forced to give concessions, $2.5 billion in addition but separate and apart... pension concessions worth over a billion. What they did not give through a negotiation process, motions were made to the bk court in the form of 1113e, 1113c, 1114. So no, these were forced provisions by placing a gun to Labors head in the form of threats of liquidation and job losses. That's blackmail.

I don't believe senior level managment should be cashing in and reaping a winfall on the backs of labor sacrifices less than one year ago.

For those of you who want to "know", per Mike Flores, AFA MECP East E-line, today:

US AIRWAYS FLIGHT ATTENDANTS OUTRAGED BY MANAGEMENT PROFITEERING


US AIRWAYS FLIGHT ATTENDANTS OUTRAGED BY MANAGEMENT PROFITEERING

The bloodbath US Airways employees took during the bankruptcy has turned into a river of green, lining the pockets of US Airways executives.

On June 13, 2006 US Airways issued the following press release:

TEMPE, Ariz., June 13, 2006 /PRNewswire-FirstCall via COMTEX News Network/ -- US Airways Group, Inc. (NYSE: LCC) today reported that several of the company's executive officers have previously adopted pre-arranged stock trading programs to facilitate the exercise of options and the sale of holdings in the company's stock. The company's securities trading policy permits the enactment of pre-determined plans for trades of specified amounts of company stock in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

(Read the full Company Press Release HERE.)

This information was released, in conjunction with SEC filings this week detailing transactions by some current US Airways executive who exercised various stock options and grants related to the merger between US Airways and America West.

In plain English, the Company indicated that various former America West executives cashed in thousands of shares of stock received as part of the bankruptcy reorganization and merger transaction between America West and US Airways. The SEC filing is designed to protect Company executives from any charge of insider trading.

US Airways CEO Doug Parker has been widely quoted as saying that America West was in an untenable position prior to the merger and faced an uncertain future.

This week alone, over $10 million dollars in pre-tax profits have been realized by former America West executives-ALL derived from a merger that probably saved their jobs.

In the past several weeks other Company executives have exercise pre-arranged merger derived stock option sales which have resulted in excess of $3million dollars in pre-tax profits for those executives.

Earlier this year the Company announced a $6 million dollar profit for Q1 2006. The profit was largely touted by Company executives as the direct result of the US Airways bankruptcy that allowed the Company to return aircraft, reduce jobs and extract pay cuts and reduced benefits from US Airways employees.

So, based on the concessions given by labor, the loss of jobs caused by the return of aircraft during the US Airways bankruptcy which decreased capacity and therefore caused higher ticket prices, former America West managers have now been able to cash in stock and profit and keep their jobs from our sacrifices.

AFA-CWA issued a press release denouncing both the profiteering and the slow pace of merged contract negotiations. An excerpt from the release states:

"US Airways flight attendants gave over $150 million in contract concessions, including termination of our pensions, in order for the airline to survive and be a partner in the merger," said Mike Flores, US Airways Master Executive Council President. "For former America West executives, who absent the merger would likely be in bankruptcy court themselves, to now cash in pre-arranged merger created stock options and grants is just beyond obscene."

(Read the full AFA/CWA press release HERE)

The following Associated Press story, detailing the stock transactions appeared across the nation in newspapers yesterday morning.

PHOENIX (AP) -- Some of US Airways' top executives have exercised stock options and sold shares for hefty gains this week. They are the executives' first stock sales since America West bought US Airways last fall and took the name US Airways Group Inc.

Insiders were prohibited from selling in the first six months after the merger. In that period, the Tempe-based company's stock more than doubled .Scott Kirby, the airline's executive vice president of sales and marketing, sold 115,500 shares on Monday at $46 a share, according to securities filings Tuesday. He exercised options for most of the shares, at prices ranging from $6.42 to $29.09, for a pretax gain of more than $4 million. Chief Administrative Officer Jeff McClelland sold 63,251 shares at $46.08, all acquired through option exercises. His pretax profit was $2.2 million. Jim Walsh, the airline's general counsel, sold 47,437 shares at $46.08 after exercising options. His pretax gain was $1.53 million. Chief Financial Officer Derek Kerr sold 34,924 shares at about $47, the bulk by exercising options. His pretax profit from the trades was $1.1 million. The airline said in a statement that the executives sold to diversify their assets, a common reason cited by insiders. US Airways said the executives have established pre-arranged stock-trading programs and these sales were part of them .CEO Doug Parker also has such a plan, but did not sell any stock. He has said repeatedly he has not sold a share of company stock since joining America West in 1995.

The pace of negotiations has slowed to a crawl. The outrageous excesses the current management has chosen to avail themselves of, coupled with the nonsensical proposals that seek to derail 40 years of collective bargaining at US Airways lead me to believe this management believes they can run over the will of our membership. To the newly rich US Airways management I say that is not the case.

Mike Flores, President
US Airways MEC President
AFA-CWA





~~~~~~~~~~~~~~~~~
 
I hope everyone remembers all of this when it comes to negotiations. What a way to increase morale! Whose stupid ideas was it to allow them to cash in when the 2 companies were not fully merged and the chips havent had a chance to fall? I dont think I would be allowed in negotiations because I would keep saying stock options? who? how much? Give credit to Doug for not cashing in any. Why does he keep the rest of the idiots around? Why is is that because they do their job they get stock options(worth millions) and yet they tell the rank and file to do twice their job, take a pay cut and be happy about it? Im sure these execs wanted to keep their cushy jobs so why give them stock options, let them work the merger so they have a job! They were paid a salary to do their job-just like the rest of us!! This is going to turn around and bite them,and I hope it hurts!
 
Sparky,

Your post have no validity. And I don't take my orders from the small fish.

Reality check: Two losing airlines merged together. The investors were convinced that the synergy between these two companies may make it viable. Purely speculation.

From my perch, I've seen no difference in Managements. You still have the union busters on the property.

Think you still need them kool-aide man?
Your own CEO spin master said in early 2005 that without a merger, AWA would possibly be looking at BK.

Please, get the toilet paper!
First and formost in Customer service 101, never tell a customer, "if unhappy, fly another airline"! Never, no matter what.

They are essential to your job security and the company's.
:lol: :lol: :lol: :lol:
 
PHX Mama,

Your post is exactly the point.

The rank are being paid to do a job at reduced wages, while some in managment get a winfall. The rank are expected to be grateful for a job.

I have to just shake my head. Hopefully, Labor won't forget. Unfortunately, contracts become amendable in 2012 for almost all of labor. By then, the Execs would have raked 10 times over, while the rank has gone far into debt to make ends meet. I have read the execs contracts and their total compensation is not based on Company performance, but personal performance targets for bonuses.
 
How would you like it if you NEGOTIATED stock in your contract and the company dictated to you when you could cash it in? Bottom line....it is their stock options and it is up to them to decide when they want to cash them in. Do I agree that stock options should be paid based on personal performance, no. Should it be based on company performance, absolutely. They negotiated stock options as part of their contract with the company. Who are you to decide whether it is right or wrong for them to cash in the stock.

So, once again, Pitbull, are you advocating violating their contract, their ability to cash in their stock options? A contract is a contract, right?
 
MMW,

Is it legal for them to cash in the stock options?

Yes.

Is it ethical? A more interesting question.

It is certainly unseemly, and just plain bull$*&t for the company to poor mouth when it comes to labor negotiations, and then ante up for exec bonuses.

Can anybody say, with any certainty, US is a long-term going concern?

If not, couldn't the $$$ for exec bonuses gone to better use?

Or, have we seen the true purpose of too many American corporations?

The fleecing of employees and taxpayers.
 
How would you like it if you NEGOTIATED stock in your contract and the company dictated to you when you could cash it in? Bottom line....it is their stock options and it is up to them to decide when they want to cash them in. Do I agree that stock options should be paid based on personal performance, no. Should it be based on company performance, absolutely. They negotiated stock options as part of their contract with the company. Who are you to decide whether it is right or wrong for them to cash in the stock.

So, once again, Pitbull, are you advocating violating their contract, their ability to cash in their stock options? A contract is a contract, right?

Once again advocating violation of a contract????

Violating contracts are your words, charlie brown, not mine. Labor didn't create the BK; we don't have that luxury to force 50+% salary decreases for all execs plus no pension plans, and only profit sharing for co. performance; instead of bonuses for individual target performances while in bk....

LABOR DID NEGOTIATE STOCK OPTIONS, THAT CHOICE WAS TAKEN AWAY BY THE BOD AND INVESTORS, AFTER WE RATIFIED OUR AGREEMENTS IN 2005. They told us it was either allow for that provision to be removed, or they would again go to the judge, as they claimed they could not emerge from bk with that provision of stock for labor. Again, more threats of the company not making it blah, blah, blah...
BUTTTT, they got theirs upon emerging from BK on Sept 27, 2005.

Get it yet; or are you still going to act dense????
 
Bob,

That's not a reasonable retort. Stock options are granted to execs of corporations who keep a positive balance sheet. If the company does well, by all means, share in the glory.

BUT WHEN EXECS REAP WHAT LABOR SOWS AND NO RETURN FOR LABOR BUT "HAVING A JOB" THAT CONSEQUENTLY BENEFITS AND ENSURE THE EXECS POSITION AS WELL...I'VE GOT A PROBLEM WITH THAT...MAJORLY.

Just ask the 22,000 from the East who lost their jobs in this process if they think it was worth it. I left mine because it wasn't. And when I see the execs making out on this deal less than a year out of bk with only showing a lousy $5 million in profits, it sickens me.

You know well, I would have never left a 25-year job if it were not for all the concessions and pension dump, loss of 401K,and working more days for less pay...it just didn't make sense to many of us to stay only to find ourselves going backwards financially for at least 7 years.

No. I'm angry for the employees from the East who made way for the company to merge by giving $2.5 billion plus, 22,000 job losses. I think the employees who write to me can swallow this if they didn't see Execs walking away today with major compensation in the millions in less than a year out of BK. Even DP knows how bad this looks for employee morale.
AWA Execs really should not be raking millions with outstanding transition agreements still open and a yet to be completed merger....and having to tell labor that the provisions must be "cost neutral". After all, their employees haven't had any increases since 1999. And now what, wait until 2012.
Insane.
 
Stock options expire. There are also provisions for executives to set triggers that will exercise the options under certain circumstances.

The options these executives exercised were likely given to them before the merger was even announced. Also they could have been set to expire soon.

Not like stock sales are even coming from the company.... the payout is coming from the others who were silly enough to buy the stock.

Or should these people be expected to just forego receiving a part of their compensation?

If being a top executive is so easy, why don't all of those on the bottom take those jobs?
 
Jax,

You know better than that. There is no AWA. These execs were granted NEW stock in the NEW company. For labor, that option was taken away. When we ratified the contracts in early 2005, it was not known to labor that Managment would wait a couple of months and then motion to the courts for $51 million in retention/severance bonus packages while still in BK. Labor didn't know that on Sept 27 folks like Heminway, Crellin, Glass, Lakefield, Chiames,Lainer and many of the VPs from the East would be partaking in a winfall with bonus and stock options.

Labor has no crystall ball; but Execs are calculating.
 
Jax,

You know better than that. There is no AWA. These execs were granted NEW stock in the NEW company. For labor, that option was taken away. When we ratified the contracts in early 2005, it was not known to labor that Managment would wait a couple of months and then motion to the courts for $51 million in retention/severance bonus packages while still in BK. Labor didn't know that on Sept 27 folks like Heminway, Crellin, Glass, Lakefield, Chiames,Lainer and many of the VPs from the East would be partaking in a winfall with bonus and stock options.

Labor has no crystall ball; but Execs are calculating.

So for engineering the merger and staying on board, their AWA stock should have all been forfeited? They didn't even get a 1 for 1 trade into LCC stock.

The CEO of my employer is the highest paid non-profit CEO in America. The company is in financial difficulty, the rest of us have had our pay frozen or cut and layoffs happened (only for management, not hourly employees... many of which with management pay cuts make as much as their supervisors, leading supervisors to quit faster than we can fill the positions). Then again, our CEO founded the company and owns it. It's his prerogative to pay himself what he wants. I'm not going to be able to do anything to change that. I'm finishing my MBA and will go climb the ladder elsewhere.

Most of the affected execs at LCC could do better compensation wise at other companies in other industries.
 
So for engineering the merger and staying on board, their AWA stock should have all been forfeited? They didn't even get a 1 for 1 trade into LCC stock.

The CEO of my employer is the highest paid non-profit CEO in America. The company is in financial difficulty, the rest of us have had our pay frozen or cut and layoffs happened (only for management, not hourly employees... many of which with management pay cuts make as much as their supervisors, leading supervisors to quit faster than we can fill the positions). Then again, our CEO founded the company and owns it. It's his prerogative to pay himself what he wants. I'm not going to be able to do anything to change that. I'm finishing my MBA and will go climb the ladder elsewhere.

Most of the affected execs at LCC could do better compensation wise at other companies in other industries.

And so could the employees of U, and many, many have voluntarily!

The Execs could do better somewhere else, you say, huh,...than obviously the compensation is pretty damn good even when in BK, cause you couldn't pry them out. And those that didn't find jobs were protected as well through the BK judge ruling on the motion to award severance bonuses.

As far as comparing your CEO and company...a publically owned company is quite different than a privately owned company.

AWA did NOT engineer the merger! USAirways employees stock went to zero TWICE...get it....ZERO. PUBLIC SHAREHOLDERS STOCK WENT TO ZERO...GET...ZERO.

So, your argument to defend management is LAME!

NEXT...

I noticed that when someone has a different opinion to your's pit you bash them.Actually anytime someone has a difference of opinion to any of the unions they get bashed. Why is that?

Good observation, Clueso.
 
Following is and AFA MEC E-line that went out today from the MECP from the West PHX Council 66....

US AIRWAYS/AMERICA WEST FLIGHT ATTENDANTS OUTRAGED BY MANAGEMENT PROFITEERING


While your Merger Negotiations Committee are wading through negotiations for a combined contract, the airline’s management team was busy this week exercising over eight million dollars in stock options. Yet despite their sudden increase in wealth, management refuses to recognize that flight attendant sacrifices need to be repaid.

According to UBS Financial Services, Scott Kirby, US Airways Vice President of Sales and Marketing, cashed in a total of over $4 million, while their Chief Administrative Officer Jeff McClelland made $2.2 million before tax. General Counsel Jim Walsh and Chief Financial Officer Derek Kerr made pre-tax earnings of $1.53 and $1.1 respectively.

Flight Attendants have to stretch every dollar to make ends meet, while management cashes in on lucrative stock options, earning millions of dollars.

Negotiations have been largely unproductive with even simple non-economic issues unresolved. As reported last week in our negotiations update-we continue to battle the company on our latest proposals for Grievance and System Board.



The Company's ridiculous stance over these issues coupled with the outragous stock pay outs for Senior Management will continue to be met with scorn and derision by the AFA Membership and the Joint Negotiating Committee.
 
How would you like it if you NEGOTIATED stock in your contract and the company dictated to you when you could cash it in?

Well...first off, I doubt that management would have agreed. And if they had, they might have agreed to something like 100 shares rather than 482 gazillion shares.
 

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