Incentive Plans (Window dressing)

[The Goose]

The executives have received no bonuses (in the "let's give them a bonus because of exceptional profits" sense) since the year 2000. The difficulty many of the rank and file seem to have is that AA's huge losses will not cause the board to withhold all variable compensation from the greedy executives. I'm certain that Glading and Hill and the TWU's mouthpieces would love it if Arpey was paid only his base cash salary (a little less than $700k) , but that's not how it works in the real world. In 2009, Arpey made at least $2.5 million less than he would have had the company's financial performance been impressive. I'd say a pay reduction of $2.5 million from what the board planned to pay him is a pretty fair trade for the company's dismal 2009 performance and huge losses.



Nope, the executives didn't earn their short-term incentive bonuses, and hence, for the tenth straight year, they were paid no bonuses. It's outlined in the proxy statement.



What you aren't remembering are the years when oil companies didn't make money hand over fist, like during Pres Reagan's second term, when oil bottomed out at about $10/bbl in early 1986 and bounced around from that level to about $25/bbl until the first Gulf War. Same thing for most of the 1990s, when oil profits were meager compared to the good times. While the oil company execs didn't make huge bonuses during that time, their pay consisted of more than just their base cash salary. Just like the execs at AMR over the past 10 years. Lack of profits doesn't mean that execs do without; it simply means they don't get quite as much outrageous compensation as they would if the profits were hand over fist.



2007, when AMR earned $504 million; also in 2006, when AMR earned $231 million. The only profitable years for AMR in the past decade.

Defend them all you wish FWAAA, but the bottom line is any payments, be it supposed "variable" compensation, bonuses, or whatever that's over and above the base salary is a "reward" for one thing or another - the only issue with us is whether or not it's deserved/earned.

If an executive or a herd of them cannot produce and turn in financials as has AMR for a period of time, they should be paying the corporation for their "status" rather than raping it, dollar wise. Unfortunately, that's not the way the world works.

The corporate garbage should count their lucky stars I'm not in charge of lightning bolts - BBQd executive would be on display next to the sloppy joes and quarter-inch thick "steaks".

 

[AANOTOK]

I must admit, not only are the corporate folks great "Spin Doctors", but they stick together better than white on rice and this is why they are so successful at fleecing America. Now if you don't mind, I need to sit down, I'm getting dizzy.

 

[FWAAA]

I must admit, not only are the corporate folks great "Spin Doctors", but they stick together better than white on rice and this is why they are so successful at fleecing America. Now if you don't mind, I need to sit down, I'm getting dizzy.

Sticking together? You're relatively new here and haven't been privy to all the years of posts, but you're mistaken about "sticking together." If you're gonna focus on the posters instead of the topic, you'd think you could at least be correct about your characterizations of the posters here. But I have learned that facts matter little here.

At the time of the first PUP payout a few years ago, eolesen denounced management's decision to accept the huge variable payday. He's consistently criticized management for accepting the PSP payouts since then. I completely disagree with him on this issue, as should be apparent from reading the various threads on the topic. Although I often agree with eolesen, on this issue alone I think he's completely out to lunch. I'm certain the feeling is mutual. In his view, I'm probably completely wrong on the PUP/PSP issue.

Arpey has done what very few other airline execs have accomplished: he presided over a slashing of wages, a renegotiation of debt and lowering of lease payments and continued funding of the pilot pensions, and has prevented the stock from reaching zero, all without filing Ch 11 as the CEOs of US, UA, DL and NW did over the past decade. AA's survival was financed by the massive paycuts you and your colleagues suffered beginning seven years ago. The anger you feel over those paycuts and the failure of the company to offer substantial raises is certainly understandable. Arpey's pay was cut also (he's made millions less over the past seven years than the board planned to pay him) but because he makes many multiples of your pay, you and the others continue to vilify him in a never-ending rage of paycheck envy.

I just wish you guys would spend a fraction of the energy you waste worrying about Arpey's paychecks on something productive, like replacing the worthless union. Years ago, I told Informer that I would gladly send him $100 upon the creation of an independent AA AMT union. All he has to do is incorporate it and send me the EIN. To date, he hasn't taken me up on the offer. 25,000 of you at AA represented by the worthless union have failed to do anything about your situation. I'm still waiting, and the $100 offer still stands. 25,000 of you pony up $100 and you'd have $2.5 million, certainly enough money to effect some "change" everyone can believe in. Add in the flow of dues every month and you'd be able to afford some professional negotiators.

 

[AANOTOK]

You are correct FWAAA, relatively new to the board. But AA and the corporate world, probably a little more experience than you.

As for focusing on posters and not topic, please don't go there. Each who would want to cast the first stone would have to drop it,
including you.

By the way FWAAA, your name wasn't mentioned in my post that brought your response. Why would you feel the need to defend?

Sorry, but that's it for me for the day, got to go earn my $150 bonus which in return helps Arpey and his five top guys earn their millions. Glad I could help "share in the gain!!"

 

[eolesen]

FWAAA, let's be clear on why I oppose the PSP/PUP plan....

I'm all for variable compensation. What I'm against is the metric they're using.

If it were based on share price *and* financial/operational performance, I'd be OK with it. But it's not. They're essentially getting paid for not wiping out shareholder value. Seems to me that's part of their job description, and not something that's over/above the call of duty....