Executive Bonuses

[FWAAA]

$1.1 billion? I am sorry but I will have given up $120,00.00 in concessions over the life of these concessions. I did not see anywhere close to that figure in returns. I did however see management take MILLIONS while not taking the Shared Sacrifice I did.

You sem to miss the meaning/emotion/feeling/FACT of my post. When We, the worker force, were lied to in order to accept LIFE CHANGING WAYS OF LIFE all the while the twu international officers and management who would NOT receieve the same "pain" as I and others did is WRONG!

I sold my stock when I could to keep my head afloat. So do not paint the stock as an equal payback. It is not.

That you sold your stock the day it was allowed doesn't change the fact that the rank and file were given 20% of the company in May, 2003. And the value of those 38 million options is worth $1.1 billion today. Of course it won't come close to replacing your losses in the concessions. Nobody ever claimed it would. The rank and file's concessions of $1.6 billion/year for the five years will total $8 billion. The stock price would have to hit $216/sh for those 38 million options to replace the total concessions. Doubt anyone alive thinks that is possible. $100/share - maybe. But I probably won't live to see $216/sh.

I'm not missing your meaning/emotion/feeling/FACT at all. Emotions and feelings simply won't suddenly cause AA to have an extra $8 billion to repay your concessions. Nor will emotions and feelings make it possible to raise your pay above the pre-2003 levels. Takes money to do that.

Your earlier post that management deserved none of their negotiated upside (PUP contracts) even in the face of rank and file taking their $1.1 billion made it sound like you'd suddenly realized that management is in this solely for the money - when it's been obvious for decades to anyone with their eyes open that management is in it solely for the money.

Fact is, however, that management employees negotiated for their upside potential and now that upside is paying off. Do you expect them to say "Sorry, Ken, that your union failed to negotiate sufficient upside potential on your behalf and we're further sorry that your union failed to adequately educate you about our upside potential - so we're gonna turn down our $300 million in PUP payouts even though you all got $1.1 billion worth of stock"?

If that's what you're thinking should happen - then a reality check is in order.

Good luck with your efforts to replace your union - I'd have to agree - you guys got screwed. I'm not convinced paying dues to a different bunch of guys will result in any more money, but it should help alleviate those emotions/feelings/etc.

 

[FWAAA]

You forget to mention that the rank and file gave up $1.8 billion/year for six years to get that $1.1 billion. So in other words they paid $10.8 billion for $1.1billion worth of stock.And thats only counting what it cost for the six years and not the long term losses which would likely easily be double that or around $22billion for $1.1 billion worth of stock. Lets also not forget that they have to pay $5/share for the stock, so that lowers the real value even more, so they got considerably less than $1.1 billion. You also foget to mention that management did get stock options, this cash payout is in addition to those options. So please spare us the theatrics about how poor management is getting nothing.

No, Mr Owens, you are incorrect as to the bolded portions.

The rank and file gave up $1.62 billion/yr. Management and nonunion agents contributed the other $180 million/yr for a total of $1.8 billion.

Don't the agreements run 5.5 years? Something about October, 2008?

When I posted the $1.1 billion figure the other day, I had already subtracted the $5 price per share. 38 million shares times $29 (the price that day of $34 minus the $5) = $1.1 billion of net gain. Last I checked, it's down today, but could be up tomorrow.

 

[Hopeful]

That you sold your stock the day it was allowed doesn't change the fact that the rank and file were given 20% of the company in May, 2003. And the value of those 38 million options is worth $1.1 billion today. Of course it won't come close to replacing your losses in the concessions. Nobody ever claimed it would. The rank and file's concessions of $1.6 billion/year for the five years will total $8 billion. The stock price would have to hit $216/sh for those 38 million options to replace the total concessions. Doubt anyone alive thinks that is possible. $100/share - maybe. But I probably won't live to see $216/sh.

I'm not missing your meaning/emotion/feeling/FACT at all. Emotions and feelings simply won't suddenly cause AA to have an extra $8 billion to repay your concessions. Nor will emotions and feelings make it possible to raise your pay above the pre-2003 levels. Takes money to do that.

Your earlier post that management deserved none of their negotiated upside (PUP contracts) even in the face of rank and file taking their $1.1 billion made it sound like you'd suddenly realized that management is in this solely for the money - when it's been obvious for decades to anyone with their eyes open that management is in it solely for the money.

Fact is, however, that management employees negotiated for their upside potential and now that upside is paying off. Do you expect them to say "Sorry, Ken, that your union failed to negotiate sufficient upside potential on your behalf and we're further sorry that your union failed to adequately educate you about our upside potential - so we're gonna turn down our $300 million in PUP payouts even though you all got $1.1 billion worth of stock"?

If that's what you're thinking should happen - then a reality check is in order.

Good luck with your efforts to replace your union - I'd have to agree - you guys got screwed. I'm not convinced paying dues to a different bunch of guys will result in any more money, but it should help alleviate those emotions/feelings/etc.

20% of the company should have gotten employees 20% voting rights on the BOD.

It's funny that you mention management negotiated for the "upside" and how they are reaping the rewards.

If I remember correctly, AA had negotiated with ALL its unions with CONTRACTS!

But the company put the bankruptcy gun to the corrupt unions heads and said we need billions, or else!

Funny how executives contracts are untouchable but the unions are not!

 

[Bob Owens]

No, Mr Owens, you are incorrect as to the bolded portions.

The rank and file gave up $1.62 billion/yr. Management and nonunion agents contributed the other $180 million/yr for a total of $1.8 billion.



When I posted the $1.1 billion figure the other day, I had already subtracted the $5 price per share. 38 million shares times $29 (the price that day of $34 minus the $5) = $1.1 billion of net gain. Last I checked, it's down today, but could be up tomorrow.

Did you subtract the value of the shares given to managementand non-union agents?

Don't the agreements run 5.5 years? Something about October, 2008?

Typically contracts in this industry are not renewed right away, there is no incentive since the longer they drag things out the more they save. You admit that they are 5.5 yet used five years as your multiplier($8 billion), I went with six, which is more likely than your five. I doubt they will renew the contract six months early.

 

[eolesen]

We ALL took pay cuts, but only the top managers are sharing in the rewards! And no need to mention our stock options! It no where makes up for what we lost, unlike the executives.

I totally agree.

I still think senior management at AMR is top notch when it comes to running an airline and being competitive, but they're completely out of touch when it comes to estimating how much more these payouts have cost AMR in terms of employee goodwill.

 

[Bob Owens]

20% of the company should have gotten employees 20% voting rights on the BOD.

Employees were not given 20% of the company, they were given the option to buy shares totaling 20% at $5/share. Options do not give you the right to vote, thats why employees holding those shares did not get ballots with the 10Ks the company sent out. You would have to buy the shares in order to get to vote.

Funny how executives contracts are untouchable but the unions are not!

Well they are untouchable when it comes to giving us anything back but totally touchable when it comes to management taking things away!

 

[Ken MacTiernan]

I totally agree.

I still think senior management at AMR is top notch when it comes to running an airline and being competitive, but they're completely out of touch when it comes to estimating how much more these payouts have cost AMR in terms of employee goodwill.

Eric, I do not think management is so much out of touch as that they simply do not care how the work force views their actions. Also, Bob Reding's response to the JFK AMT is a very good view on how management thinks about the work force.

 

[Hopeful]

I totally agree.

I still think senior management at AMR is top notch when it comes to running an airline and being competitive, but they're completely out of touch when it comes to estimating how much more these payouts have cost AMR in terms of employee goodwill.

Bingo!

Well said!