Kev
I agree with you completely. I guess the point that I've been trying to get across (apparently not very successfully), is a qualification of what constitutes "good perfomance" for an executive at a major airline. I think it's fairly safe to say that no executive team brought in over the course of the last five years was going to make this a profitable enterprise. As you probably witness firsthand, wholesale changes in the way business is done and how assets are utilized is not something that can be changed overnight in an organization as large and as capital intensive as a major airline.
It's really difficult to judge the performance of this management team, because maybe they did an exceptional job with the resources they had available and the structural limitations that they had to work within. Maybe a different management team would have done things differently and NWA would have lost money a little more quickly and gone into CH.11 the same time as UAL. One could argue that maybe that would have been better, but all along the whole mode of business was to do anything possible to not have to go into Ch. 11, guided by the BOD's fiduciary responsibility as it relates to the shareholders.
I'd like just as much as anybody here to be in an industry that was built on purerly capitalistic foundations, but unfortunately, the airline business was not. This driving factor, along with the huge capital constraints that are inherent in a the airline industry, have made the lines of "success" very difficult to determine.
If there was no way, even with the most savvy and creative management team known to man, for NWA to be profitable during the last five years, then I guess success has to be measured by the magnitude of the loss relative to what other companies have experienced or some other metric. In short, the bookends of great management to horrible management are maybe losing $500M per year to losing $2B per year over this period (purely hypothetical, but you know what I mean). This is a very important and "real" factor that gets ignored when we're discussing the effectiveness of the current executive team.
In sum, I don't really know for sure if this is the best managment team, and if they are doing a good job, because the measuring stick for success is hard to determine in an industry where half of the US RPM are flown by corporations that are in or were recently under bankruptcy protection. I will grant that it appears that the BOD is often times bent over a barrel and forced to dole out large incentive packages to keep key executives, and often that is done in order to maintain confidence in the creditor community that NWA is not falling apart at the top. It may appear unseemly, but it's hard to blame a guy for getting what he can out of a situation that presents itself. Is it good leadership? No, I agree that it sends the wrong message to those that are being asked to make a sacrifice. Am I going to get all worked up about it? No, because I understand whey they are getting compensated in this manner, and if in the end it helps NWA secure suitable financing as part of this process, then I guess it will have a silver lining.
