July 29, 2004 And Still Waiting!
- Thread starter Hopeful
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Checking it Out
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American chief rejects pay raise
By Trebor Banstetter
Knight Ridder News Service
FORT WORTH, Texas - When Gerard Arpey, American Airlines chief executive officer, was tapped to take the company's chairman job earlier this year, the position came with more than just a new title.
The board of directors of AMR Corp., American's Fort Worth parent, voted to give Arpey a 22 percent raise along with the new position a total of more than $110,000 annually, the company said Wednesday.
But Arpey surprised many board members by turning down the money. He argued that accepting a raise would send the wrong message to employees, who have seen hefty pay cuts during the past two years as American has struggled to overcome steep losses.
"I think he's always been a believer in shared sacrifice," said Roger Frizzell, a spokesman for American, the world's largest airline. "From a personal standpoint, he thought the timing wasn't right."
Arpey earns about $514,000 annually, according to Frizzell. The raise would have boosted his salary to $625,000.
The airline disclosed the attempted pay increase on the same day it filed papers with the Securities and Exchange Commission outlining stock options that will be granted to Arpey and four other top officers under the company's executive performance plan.
Those options, which total 400,000 shares, are linked to the airline's long-term stock performance, and cannot be accessed until 2007, Frizzell said.
Although Arpey declined to accept the raise, it technically remains in place for the joint position of chairman and chief executive officer, Frizzell said.
Arpey could choose to accept the money in the future. He could not, however, retroactively take the cash he's giving up now, Frizzell said.
"He's leaving money on the table every month," he said.
Some investors have criticized AMR for its stingy executive pay, low compared to other companies of its size. At the company's annual shareholders meeting earlier this year, some critics said the compensation was responsible for a "brain drain" of management talent that has left the airline during the last few years.
But union leaders applauded Arpey's decision Wednesday, noting that raises for top management could be devastating to employee morale.
"I call it good leadership," said Denny Breslin, an American pilot who is spokesman for the Allied Pilots Association. "He obviously understands that taking a raise right now would send the wrong message to the employees, and I commend him for that," Breslin said.
Liz Geiss, spokeswoman for the Association of Professional Flight Attendants, said Arpey is "leading by example."
"After all, the employees provided concession through 2008," she said. "It's only fair that he make the same sacrifices."
An uproar over executive compensation brought down Arpey's predecessor, Don Carty, last year. Just after approving $1.6 billion in concessions, employees learned that top executives were eligible for hefty bonuses and a bankruptcy-proof special pension plan worth millions. Carty resigned in the furor that followed.
Arpey declined to take a raise when he took the chief executive position, and now makes far less than Carty did. Carty's annual base pay was $811,000.
Arpey was, however, awarded stock options as part of an executive performance package.
According to documents filed Wednesday with the Securities and Exchange Commission, Arpey was granted 172,000 shares in options, although he won't be eligible to receive the shares until 2007.
Currently, they have no value. The options have a strike price of $8.88 per share, according to the SEC filing.
FAQ's © 2004, Produced by NewsOK.com
Just a note: The continued pressure the Unions put on the leaders at AA has had an affect. I also believe AA could do more. I noticed new faces in Management recently.
Could AA do more? I believe they can. Going after union workers is not the answer anymore. Restructuring management positions and stremlining some of their functions will reduce costs. I also believe with the technology today we do not need supervisors.
OP
Hopeful
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Oh I get it!
Little's pressure forced Arpey to reject the raise!
If the TWU and Little have so much clout, why did they accept AA's bankruptcy threat without a fight?
Did you ever think for once that Arpey might be smart enough to know that with morale so low as it is, his accepting a raise would destroy any little progress that may have been made since his taking over AA.
What galls me more, is the Board of Directors suggesting he get such a large raise while employees have to wait for $25 AIP handouts.
This is what corporate America thinks of us!
Little's pressure forced Arpey to reject the raise!
If the TWU and Little have so much clout, why did they accept AA's bankruptcy threat without a fight?
Did you ever think for once that Arpey might be smart enough to know that with morale so low as it is, his accepting a raise would destroy any little progress that may have been made since his taking over AA.
What galls me more, is the Board of Directors suggesting he get such a large raise while employees have to wait for $25 AIP handouts.
This is what corporate America thinks of us!
Mark Inman
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I also listened to Jim Little a the meeting at the Radisson say he has not had a pay raise in three years yet TWU's LM-2 for 2003 showed his pay went up $20,000 in 2003 over 2002. But your right Mr. Arpey probably did not get a raise. Good luck trying to convince the members the TwU's pressure is working. NO VOTE :angry: NO PEACE!!!!
Decision 2004
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I would have gladly given up our contractual raises compared to what Jim Little and the TWU did to the workforce, and to top that, I would have kept my base pay, vacation, holidays, sick time, and work rules in place.
Refusing a payraise at his level is NOT SHARED SACRIFICE!
Applauded my ass.
TWU is a weak company union participating in a huge charade.
Refusing a payraise at his level is NOT SHARED SACRIFICE!
Applauded my ass.
TWU is a weak company union participating in a huge charade.
So where is the TWU Internationals "shared sacrifice"?
They gave themselves pay raises! In fact they engineered our concessions to maximize the economic impact on us while minimizing it to the dues flow.
By the way CIO, you still did not answer Hopefuls question.
They gave themselves pay raises! In fact they engineered our concessions to maximize the economic impact on us while minimizing it to the dues flow.
By the way CIO, you still did not answer Hopefuls question.
Nightwatch
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Let's be honest here a minute. Would it really matter to you what was given as a response? I haven't read one positive response from you amfaites on any one matter or item written. Point is you are closed minded and will remain that way, so any response is futile.
OP
Hopeful
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Directors Update - 06-14-04 - Monday, June 14, 2004 at 14:52
VIA FACSIMILE
Mr. Jim Weel
Managing Director EPR
American Airlines, Inc.
PO Box 619616 MD 5235
DFW Airport, TX 75261-9616
RE: Information – Shared Sacrifice - Restructuring
Dear Jim:
As you know, we have had on-going discussions regarding the 2003 restructuring agreement and the issue of “Shared Sacrifice.†A few weeks ago, Jeff Brundage, Senior Vice President Human Resources assured us that finance was in the process of putting together an analysis of a cross section of Management concessions as compared to the labor concessions.
We again raised the issues at the May 19, 2004 Stockholders Meeting and also at the follow-up meeting with Mr. Arpey.
Jim, as you well know we all are aware of the shared sacrifice that Mr. Arpey and the Senior Management has taken. However, although we have been advised that Management’s share across the board is reflective of our members’ sacrifices, we have yet to be giving this breakdown.
Bottom line, our members, as equal partners in avoiding bankruptcy, deserves the information. What is absolutely unacceptable is that our members and all labor groups had to have the entire restructuring agreement completed in less time than it is taking American Airlines to provide us with the comparison, which is the benchmark of credibility.
We can no longer continue to accept more excuses. Therefore, if the information is not received in our office by Monday, June 28, 2004 we will take whatever action we deem appropriate considering that Shared Sacrifice did not occur.
Sincerely,
James C. Little
Director Air Transport Division
Intl. Administrative Vice President
JCL:cjw opeiu-153 afl-cio
C: S. Hall
ATD Intl. staff assigned
J. Brundage
AA Local Presidents
Nightwatch:
Did Little or did he not say a response by June 28 was needed or actions deemed appropriate by the TWU would be taken?
Maybe if Little had a pair of yams, and actually DID something, I may have a positive post in respect to Little and the TWU.
You can't make empty threats and expect to be taken seriously!
VIA FACSIMILE
Mr. Jim Weel
Managing Director EPR
American Airlines, Inc.
PO Box 619616 MD 5235
DFW Airport, TX 75261-9616
RE: Information – Shared Sacrifice - Restructuring
Dear Jim:
As you know, we have had on-going discussions regarding the 2003 restructuring agreement and the issue of “Shared Sacrifice.†A few weeks ago, Jeff Brundage, Senior Vice President Human Resources assured us that finance was in the process of putting together an analysis of a cross section of Management concessions as compared to the labor concessions.
We again raised the issues at the May 19, 2004 Stockholders Meeting and also at the follow-up meeting with Mr. Arpey.
Jim, as you well know we all are aware of the shared sacrifice that Mr. Arpey and the Senior Management has taken. However, although we have been advised that Management’s share across the board is reflective of our members’ sacrifices, we have yet to be giving this breakdown.
Bottom line, our members, as equal partners in avoiding bankruptcy, deserves the information. What is absolutely unacceptable is that our members and all labor groups had to have the entire restructuring agreement completed in less time than it is taking American Airlines to provide us with the comparison, which is the benchmark of credibility.
We can no longer continue to accept more excuses. Therefore, if the information is not received in our office by Monday, June 28, 2004 we will take whatever action we deem appropriate considering that Shared Sacrifice did not occur.
Sincerely,
James C. Little
Director Air Transport Division
Intl. Administrative Vice President
JCL:cjw opeiu-153 afl-cio
C: S. Hall
ATD Intl. staff assigned
J. Brundage
AA Local Presidents
Nightwatch:
Did Little or did he not say a response by June 28 was needed or actions deemed appropriate by the TWU would be taken?
Maybe if Little had a pair of yams, and actually DID something, I may have a positive post in respect to Little and the TWU.
You can't make empty threats and expect to be taken seriously!
Decision 2004
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- Mar 12, 2004
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Our concessions have been eaten up in fuel cost in a single quarter and yet AMR is not on the Bankrupcty Steps. Imagine that!
TIME FOR CHANGE
Veteran
Lets face it the morale at this company sucks hine tit. Arpeeeee rejects a raise and we are supposed to be glad. How about eat me jackass give us our pay and benefits back then we can talk about morale. Face it morale will not get better until 2008. If AArogant airlines can make it that long. My bet is 3 years and liquidation.
Decision 2004
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And so, what does that make you?Nightwatch said:
How about, head buried so deep a backhoe and jackhammer can't get through.
