Parker's moves so far

[Super FLUF]

First the travel pass bennies. A no brainer. Give travel workers the benefit expected to go with the job. And we weren't even asked to GIVE UP SOMETHING to get it. How refreshing.

Now we have a pledge to tie executive compensation to labor's wages. One again, how refreshing. It's nice not be be called "another heavy brick in the backpack" and be talked down to on how we all "don't understand executive compensation".

Good riddance Centreport.

http://www.dallasnews.com/business/columnists/mitchell-schnurman/20130218-us-airways-ceo-doug-parker-vows-to-keep-executive-pay-in-check.ece

US Airways CEO Doug Parker vows to keep executive pay in check

Mitchell Schnurman [email protected]
Published: 18 February 2013 09:14 PM

Doug Parker made all the right moves to win over American Airlines’ unions. Now, he has plans to constrain executive pay, too.

He proposes that execs for the new American be paid below the industry standard for as long as the rank and file is lagging. American’s labor contracts call for matching pay rates with Delta and United after 36 months, and executive targets would rise in tandem.

“What I believe is that so long as the employees of American Airlines aren’t being paid the same as Delta and United, which they won’t be at the time of the merger, the management should not be,” Parker said in a brief interview before last week’s news conference. “That would be my recommendation to the board. So we’ll see how that goes.”

It should go pretty well, and not just because Parker will chair the board after the merger closes in the third quarter. It’s a nice gesture to align employees and executives, even though the latter sometimes get paid millions. At least they’ll be moving in the same direction.

In 2006, executive pay caused a firestorm at American, after million-dollar stock awards kicked in while the airline was losing money and workers were reeling from deep cuts. Management appeared to be profiting at the expense of employees, and that impression poisoned relations for years.

Parker wants to avoid that trap, along with another pay controversy. About 250 US Airways execs have change-in-control provisions that accelerate the vesting of stock awards and provide severance payments of one to two times annual salary.

Those who lose their jobs will get both benefits. But Parker is asking the others to waive the equity acceleration, even though it’s in their contract. That’s a big potential windfall, given the rise in US Airways’ stock price.

Their soon-to-be colleagues from bankrupt American don’t have a similar upside, so it might create resentment. And cashing in when the merger closes sends the wrong message to everyone.

The real prize is what happens after merger day.

 

[eolesen]

I'm glad that Parker wants to hold the line on executive compensation, but while it sounds good, AA executive pay has already been below that of DL and UA, and has been for the past four or five years.

Line and HDQ management pay has always been below UA and DL.

$90K for a L4 or L5 equivalent isn't unusual. At AA, those jobs would be about 20% lower paid.

I remember doing a phone interview with a guy from UA who had been laid off as an analyst; when we told him the max starting pay at the grade for the job, he laughed, and ended the interview.

 

[Super FLUF]

There were several issues that I think everyone had with the compensation packages received by AA execs.

First and formost was the fact that were were asked to take pay cuts, and then the execs went behind our backs to lavish themselves with the SERP and PUPs.

Tied to that was the fact that the airline was doing poorly, not only financially but operationally. Reward should come for doing a good job, not for losing a billion dollars in a year and coming in last or near the bottom in every DOT category.

Lastly, the arrogance and condescension coming from Centreport was just the icing on the cake. "You just don't understand executive compensation." "Labor bricks."

I don't think the rank and file have a problem with execs making the big bucks if they are doing a good job running the company, and they treat the employees with a little respect. I have friends at Delta and they never complain about the exec bonuses and they are actually concerned that someone like Richard Anderson will leave. Imagine that.

I really hope Parker and Kirby keep making "all the right moves." Will be nice to be happy to come to work and enjoy the job for once.

 

[777 / 767 / 757 Love]

There were several issues that I think everyone had with the compensation packages received by AA execs.

First and formost was the fact that were were asked to take pay cuts, and then the execs went behind our backs to lavish themselves with the SERP and PUPs.

Tied to that was the fact that the airline was doing poorly, not only financially but operationally. Reward should come for doing a good job, not for losing a billion dollars in a year and coming in last or near the bottom in every DOT category.

Lastly, the arrogance and condescension coming from Centreport was just the icing on the cake. "You just don't understand executive compensation." "Labor bricks."

I don't think the rank and file have a problem with execs making the big bucks if they are doing a good job running the company, and they treat the employees with a little respect. I have friends at Delta and they never complain about the exec bonuses and they are actually concerned that someone like Richard Anderson will leave. Imagine that.

I really hope Parker and Kirby keep making "all the right moves." Will be nice to be happy to come to work and enjoy the job for once.

Fair point, as I believe it was not what they were paid, but how they were paid. Had management approached labor and said, "Listen, if we lose our best guys, we can't fix things, so this is what we want to do, this is why we are going to do it, please understand" I think labor would have taken it A WHOLE LOT BETTER.

That being said, the pass privilege decision is a total CLUSTER F**K. Like this merger, it is a quick, half-ass decision that ignore all of the potential pitfalls. Such a policy needs to be implemented carefully, they are not, and I guarantee it will be a nightmare. You shall see.....It will be next to impossible for non-revs to see loads and other non-rev listings and their position "on the list" with the other airline. So while it sounds great, without US air employees having access to JetNet and viceversa, its total crap.

Sometimes patience, and proper planning is the smart way to go, not quick appeasmenet to make people think you are doing a good job.

Finally, I'm glad to see Parker is thinking about employees, lets see what everyone thinks once you get a long-term "industry leading" contract that the APFA and APA are already sqawking about. What happens when the synergies don't work like they thought they would and Parker says, "Sorry, can't pay you what I thought I would be able to". What then?

Things are far from over and far from good, hold all judgements to the end and when the ink on the merger and your new contracts dry. Parker will play you like a fiddle, its his job, so be careful.....

Cheers,
777 / 767 / 757

 

[Ed Norton]

I'm glad that Parker wants to hold the line on executive compensation, but while it sounds good, AA executive pay has already been below that of DL and UA, and has been for the past four or five years.

Line and HDQ management pay has always been below UA and DL.

$90K for a L4 or L5 equivalent isn't unusual. At AA, those jobs would be about 20% lower paid.

I remember doing a phone interview with a guy from UA who had been laid off as an analyst; when we told him the max starting pay at the grade for the job, he laughed, and ended the interview.

Obligatory management suck up.

 

[Ed Norton]

Talk is cheap. Like Henry Hill said in Goodfellas: "F@%K YOU, PAY ME!"

 

[jimntx]

E, I'm surprised. You are slipping. It took you 35 minutes to leap to the defense of Centreport's thievery. I'm surprised that you didn't add that the executives were forced to take those undeserved bonusses because it was in their contract. No, they weren't forced. They could have done like Smisek at Continental and said, "I won't accept any bonusses while the company is losing money." Bonusses are for achievement above and beyond the expected--not for just not quitting and not dying (which is about the effort they put forth to earn those bonusses.)

And, I don't think any of us are talking about the mid-level analyst's pay, and you know it. What a specious example to try and "prove" that the executives weren't thieves. A mid-level analyst? Of course, the job he was applying for at AMR was below industry standard. It was just another brick in the backpack position. I'm sure the "reorganization" plan had those jobs being outsourced to the company being run by some crony or former executive like the gate agent jobs.

 

[AAviator]

Good thread.

You do realize you're wasting your time with E. There's a disconnect here that he can't see and refuses to believe exists.

In E's world, Management=Leadership.

It's like throwing a rubics cube to a monkey. The outcome is predictable.

 

[AirwAr]

Obligatory management suck up.

That may be...but he's right. I know of L4 analyst who recently left AA for a 22% raise in salary. Not to mention the profit sharing he would be getting as well.

 

[Watdahail?]

It might also have something to do with pay parity between AA and US managers, low level on up. A US Airways CSM makes about 38-42K, AA CSM's make 50-60K, AA MOD's Level 5's make 75-85K, US same level Duty Managers make 55-60K. AA Hub directors make 200-250K, US Directors make 125-160K.

 

[eolesen]

AA Hub directors make 200-250K, US Directors make 125-160K.

Hub VP's may make $200K+ but hub directors are in the same $125-160K range.

As for the earlier comments... I know there's probably no point trying to provide facts where executive compensation is concerned. You've made up your minds based on the soundbytes given by the unions.

The fact is that SERP and PUP were hardly done behind anyone's back. Go look at the SEC filings from 1997 or even earlier if you can find them online. The plans are there in the annual proxy disclosures.

It's a fact that the union heads knew about plans.

What's open to opinion is whether or not your union leaders simply didn't bother to read the fine print, or chose to feign outrage after the fact because they knew they'd be next in the line of fire if they admitted to their members that they'd agreed to concessions without asking for something symbolic in return.

What's less open to opinion -- professional negotiators would have probably picked up on that and gotten better assurances like what Parker has done (linking exec & front line compensation).

The devil will be in the details. And your unions have already proven that they're not quite so good at interpreting the fine print... So I won't be surprised if/when you guys get hoodwinked or out-negotiated here.

And of course, it will wind up being greedy management's fault, and not whoever negotiated on your behalf.

 

[dfw gen]

You see that's where your aa management pedigree shines thru. It's ok to hide the fine print if you don't see it or catch it tuff sh*t. That is the problem with this company sh*ts like tou pride yourself in the hiding the fine print. Instead of managing with integrity and and ethics. Than you wonder why we blame management poor management. Good riddance

 

[Super FLUF]

Just for the sake of argument E, let's say you are 100% correct that the unions should have known about the SERP and PUP.

The bottom line is, management shouldn't have taken them. True leadership would have taken a huge hit as a symbolic gesture of "I'm sincere and we're in this together". Taking the exhorbitant bonuses was a stunning display of aloofness, hypocrisy, and cluelessness.

Not only that, but (if they were so smart) they should have KNOWN that there would be a violent reaction by the rank and file who had been asked to make sacrifices.

These management teams have deserved the union leaders they have gotten, and also the forced exit being foisted upon them.

 

[Kev3188]

I'm glad that Parker wants to hold the line on executive compensation, but while it sounds good, AA executive pay has already been below that of DL and UA, and has been for the past four or five years.

Line and HDQ management pay has always been below UA and DL.

$90K for a L4 or L5 equivalent isn't unusual. At AA, those jobs would be about 20% lower paid.

I remember doing a phone interview with a guy from UA who had been laid off as an analyst; when we told him the max starting pay at the grade for the job, he laughed, and ended the interview.

What's the equivalent (job title) to an L4 or L5 at UA and/or DL?

 

[jimntx]

Hub VP's may make $200K+ but hub directors are in the same $125-160K range.

As for the earlier comments... I know there's probably no point trying to provide facts where executive compensation is concerned. You've made up your minds based on the soundbytes given by the unions.
(snip)

Blah, blah blah
(snip)

And of course, it will wind up being greedy management's fault, and not whoever negotiated on your behalf.

OK, here we go. On 3.

Push 'em to the left!
Push 'em to the right!
Empty out their pockets.
Fight, fight, fight!
YEA Horton!

Better get those last cheers in E, you may not have another opportunity to collect your cheerleader stipend.