PUP Scorecard 2008

[Hopeful]

They do have a contract, and so do you. Personally I think it's unfortunate that the payouts are distributed as they currently are, but until a new contract is worked out that is the reality.

But again, this is all pure speculation until we see what the board does in the spring.

And the executives have a union too...It's called THE GOOD OLD BOYS NETWORK....."You scratch my back, I'll scratch your back" is the creed they live by...

I hope then when the greedy priviliged masters of the universe get their "CONTRACTUAL PUP PAY", that employees really show just how they feel.

 

[FrequentFlierCA]

With AA, it's never a good time to ask for a big (or any) raise.

From the pilot side, they've always dragged out negotiations out for so long that it's inevitable that sometime there is be a down cycle in the economy. This never fails to bring out the whiners and their "how can you ask these poor managers for more money" chants.

That's a fair argument to make in the sense that the economy is indeed cyclical. Of course in 2003 no one predicted (or believed, anyway) that we'd be where we are today. I honestly feel awful for all of AA's unionized employees because you're all trying to negotiate raises at a time when companies are shedding jobs by the tens of thousands.

It's a #### situation, to be sure. Of course management would have a very difficult time arguing against raises if the company was raking in profits. Since there is no end in sight for this economic catastrophe, it would be irresponsible of the executives to splash out heaps of cash on big raises. In addition managing the corporation, they have a fiduciary responsibility to AMR's shareholders to keep the company a going concern.

 

[Hopeful]

would have a very difficult time arguing against raises if the company was raking in profits. Since there is no end in sight for this economic catastrophe, it would be irresponsible of the executives to splash out heaps of cash on big raises. concern.

But they don't have a hard time dishing out their PUP$$$$$$$$$$$$$$$$$$$$$$$$$.

Tell me again where the executives are sharing the pain......

 

[Hopeful]

Can we extend this logic to: with the economy as it stands... it is not the ideal time to demand a big raise?

I didn't realize that getting money back that was taken from you constitutes a raise.

 

[nbmcg01]

But they don't have a hard time dishing out their PUP$$$$$$$$$$$$$$$$$$$$$$$$$.

Tell me again where the executives are sharing the pain......

Once again I have never understood the concept of executive bonuses. They are paid a GOOD salary for doing a job. Why should they get extra money for doing their job. Pilots don't receive large bonuses for on time performance, f/as don't get bonuses for pax commendations (which generate return customers), mechanics don't receive bonuses for quick and safe "fixes", ramp don't receive bonuses for quick turns, agents don't receive bonuses for getting the flight closed out on time. Why, because they are doing their jobs. This sense of upper level mangt. entitlement has to be the next great paradigm change. Do your job, get paid, so be it.

 

[FWAAA]

Once again I have never understood the concept of executive bonuses.

Truer words have not been posted here for quite a while. Refreshing to see such honesty posted here.

They are paid a GOOD salary for doing a job. Why should they get extra money for doing their job. Pilots don't receive large bonuses for on time performance, f/as don't get bonuses for pax commendations (which generate return customers), mechanics don't receive bonuses for quick and safe "fixes", ramp don't receive bonuses for quick turns, agents don't receive bonuses for getting the flight closed out on time. Why, because they are doing their jobs. This sense of upper level mangt. entitlement has to be the next great paradigm change. Do your job, get paid, so be it.

Management at almost every company is paid "good money" as a base salary. They also demand (and almost always successfully negotiate) variable compensation so that they make more money when their company's financial performance outpaces the competition.

For many years, shareholder activists have called for "accountability" in executive compensation. Objectively-determined variable compensation is often the right answer to those concerns. And yet in this post, you appear to be calling for a return to guaranteed salary without any variable component. Good luck with that.

I'm sure you've heard of "pay for performance." The PUP/PSP is a perfect example.

As I posted about three years ago, calling the PUP/PSP payouts "bonuses" is misleading, since that makes it sound like the execs all of a sudden decided to grant themselves additional pay in early 2006.

Nothing could be further from the truth. The execs have worked for years for base pay that's less than they could have earned in other industries. In exchange for accepting smaller base pay (guaranteed salary) they also counted on long-term incentive variable compensation about which so many incessantly whine, the PUP (now PSP) program.

Shareholders are happy when AMR outperforms the stock of CAL, DAL, UAUA, NWA and LCC (USAir). What better objective measurement of company performance? Like it or not, AMR outperformed most other airline stocks over the past few years. Having every legacy peer except for CAL file for Ch 11 protection helped, of course. But that's precisely the point: AMR management turned things around without canceling the stock (unlike all those other competitors). THAT was appreciated by stockholders. So the execs dusted off their contracts, applied the formula, and arrived at their variable compensation (or Bonus, for those wedded to the term).

When you were an FA, your role consisted of managing in-cabin safety and serving the food and drinks. That was about it. Your only concern for company finances would have been to make sure drink and headset money was turned in.

On the other hand, had you been the CEO or another top-level exec, then your role would have been to oversee the operations (moving tens of millions of passengers where they want to go) AND to do it while bringing in lots of money and spending less than you bring in.

As your post pointed out, you have never understood executive compensation. And likewise, I'm certain that senior management doesn't understand why the FAs and pilots and mechanics and bagsmashers and agents have never demanded variable compensation similar to what they have.

What you really don't understand is that senior management would demand (and probably get) lots more guranteed base salary if your ideas were adopted. Without any upside, they'll want a lot more annual salary. Almost everyone else in the country thinks the current scheme makes more sense: they make more money if the company they manage performs well.

 

[nbmcg01]

Truer words have not been posted here for quite a while. Refreshing to see such honesty posted here.



Management at almost every company is paid "good money" as a base salary. They also demand (and almost always successfully negotiate) variable compensation so that they make more money when their company's financial performance outpaces the competition.

For many years, shareholder activists have called for "accountability" in executive compensation. Objectively-determined variable compensation is often the right answer to those concerns. And yet in this post, you appear to be calling for a return to guaranteed salary without any variable component. Good luck with that.

I'm sure you've heard of "pay for performance." The PUP/PSP is a perfect example.

As I posted about three years ago, calling the PUP/PSP payouts "bonuses" is misleading, since that makes it sound like the execs all of a sudden decided to grant themselves additional pay in early 2006.

Nothing could be further from the truth. The execs have worked for years for base pay that's less than they could have earned in other industries. In exchange for accepting smaller base pay (guaranteed salary) they also counted on long-term incentive variable compensation about which so many incessantly whine, the PUP (now PSP) program.

Shareholders are happy when AMR outperforms the stock of CAL, DAL, UAUA, NWA and LCC (USAir). What better objective measurement of company performance? Like it or not, AMR outperformed most other airline stocks over the past few years. Having every legacy peer except for CAL file for Ch 11 protection helped, of course. But that's precisely the point: AMR management turned things around without canceling the stock (unlike all those other competitors). THAT was appreciated by stockholders. So the execs dusted off their contracts, applied the formula, and arrived at their variable compensation (or Bonus, for those wedded to the term).

When you were an FA, your role consisted of managing in-cabin safety and serving the food and drinks. That was about it. Your only concern for company finances would have been to make sure drink and headset money was turned in.

On the other hand, had you been the CEO or another top-level exec, then your role would have been to oversee the operations (moving tens of millions of passengers where they want to go) AND to do it while bringing in lots of money and spending less than you bring in.

As your post pointed out, you have never understood executive compensation. And likewise, I'm certain that senior management doesn't understand why the FAs and pilots and mechanics and bagsmashers and agents have never demanded variable compensation similar to what they have.

What you really don't understand is that senior management would demand (and probably get) lots more guranteed base salary if your ideas were adopted. Without any upside, they'll want a lot more annual salary. Almost everyone else in the country thinks the current scheme makes more sense: they make more money if the company they manage performs well.

How wrong you are...I was an "owner" @ TWA and was very concerned about the bottom line. I worked (daily it seemed) on In-Flight budgets. My post was somewhat tongue in cheek. I don't care what you do as an executive, you're either doing (or not doing) your job. The salary should reflect the position. (and usually does)

FYI: My position was comparable to a Senior Director. And yes I was a f/a.

 

[jimntx]

Shareholders are happy when AMR outperforms the stock of CAL, DAL, UAUA, NWA and LCC (USAir). What better objective measurement of company performance?

No stockholders are not happy when AMR outperforms the stock of the other airlines. Stockholders are happy when the stock outperforms other airline stocks because AMR made a profit and paid a dividend. Remember those evidently outdated measures of company/executive performance? I don't think (nor do many others judging from the current stock price), that "I deserve a bonus because we lost less than United" is a valid argument. Shades of John Thain's asking the Merrill Lynch board for a $10 million bonus because M-L losses weren't as bad as they could have been.

Salary is for doing your job. Bonusses (by whatever euphemism you choose to disguise them) should be paid for doing an exceptional job--exceeding goals and expectations. I haven't seen that in AMR executives.

 

[restore03]

FWAAA, I work in Fleet Service and have dealt with a few bags in my 26 year career, why would you refer to me as a bagsmasher? In my time, I dont recall ever "smashing a bag".

If you want to post here, why don't you do it with a little more class and professionalism! <_<

 

[Hopeful]

FWAAA, I work in Fleet Service and have dealt with a few bags in my 26 year career, why would you refer to me as a bagsmasher? In my time, I dont recall ever "smashing a bag".

If you want to post here, why don't you do it with a little more class and professionalism! <_<

Don't be offended, restore, it is a term of endearment because it insinuates you have a job that requires hard work. Work in all kinds of weather as well as a physical impact on your entire body. Mechanics have lived with the "grease monkey" for ages.
Comments like that are just part of the class warfare struggle that is undergoing a resurgence in our country.

 

[Hopeful]

As I posted about three years ago, calling the PUP/PSP payouts "bonuses" is misleading, since that makes it sound like the execs all of a sudden decided to grant themselves additional pay in early 2006.

Nothing could be further from the truth. The execs have worked for years for base pay that's less than they could have earned in other industries. In exchange for accepting smaller base pay (guaranteed salary) they also counted on long-term incentive variable compensation about which so many incessantly whine, the PUP (now PSP) program.

As your post pointed out, you have never understood executive compensation. And likewise, I'm certain that senior management doesn't understand why the FAs and pilots and mechanics and bagsmashers and agents have never demanded variable compensation similar to what they have.

What you really don't understand is that senior management would demand (and probably get) lots more guranteed base salary if your ideas were adopted. Without any upside, they'll want a lot more annual salary. Almost everyone else in the country thinks the current scheme makes more sense: they make more money if the company they manage performs well.

Not interested in variable compensation. The executives formula will still be astronomical and what do you think the lowly worker formula will be. I have heard the argument that for the 2003 concession rape, we as mechanics received 449 shares of stock optioned at $5.
The critics say that well it hit near $40 a share and you would have made over $15000.
Yea, but I lost $120,000 and the stock would have to hit $300 before I got back what I lost.

NoW the executive elite upper class are still receiving their PUP pay because they have a CONTRACT....
So now you want us to ask for variable compensation?

I say restore everyone's base salary and NO BONUS OR PUP PAY FOR ANY EMPLOYEE UNTIL THE COMPANY IS PROFITABLE.

 

[FrequentFlierCA]

I say restore everyone's base salary and NO BONUS OR PUP PAY FOR ANY EMPLOYEE UNTIL THE COMPANY IS PROFITABLE.

That might have been a sensible solution 18 months ago, but now? With AMR servicing so much debt this year and putting new money toward planes, its cash position is going to take a real hit. The remainder will be a buffer between solvency and insolvency as the economy continues to tank and credit gets more and more difficult to access.

Looking at the numbers, I don't think AMR could afford to do this, even if the execs agreed with you.

 

[Hopeful]

That might have been a sensible solution 18 months ago, but now? With AMR servicing so much debt this year and putting new money toward planes, its cash position is going to take a real hit. The remainder will be a buffer between solvency and insolvency as the economy continues to tank and credit gets more and more difficult to access.

Looking at the numbers, I don't think AMR could afford to do this, even if the execs agreed with you.

Corporate greed could care less about economic conditions. After all. AMR execs are still getting "theirs" while the rest of us are in mediation hoping to get crumbs that the execs drop on the floor. Am I only one who sees what is transpiring with respect to the corporate greed being exposed on Wall Street? These guys can't be shamed. And yet, the pro management anti unionists here tell us not to expect anything. There are posters here who give AMR executives too much admiration by justifying their PUPs while the rest of the work force are still feeling the pain that was supposed to be shared.
I am tired of hearing that this is not the "best" time to expect anything.

According to AA, there is never a good time to expect anything decent unless you are a corporate bigwig.

 

[The Goose]

That might have been a sensible solution 18 months ago, but now? With AMR servicing so much debt this year and putting new money toward planes, its cash position is going to take a real hit. The remainder will be a buffer between solvency and insolvency as the economy continues to tank and credit gets more and more difficult to access.

Looking at the numbers, I don't think AMR could afford to do this, even if the execs agreed with you.

Since the execs don't take their PSP payments from the company anyway, rather, the shareholders by selling newly minted stock, they could certainly afford to print up some extra for we proles since the SEC S3 fees were already been paid some time ago.

I'll take the same percentage of base pay in make-up pay (or whatever the SOBs care to call it) as the execs get in company stock for our immediate disposal. 15,000 shares per person should be a nice down payment on what's due. Further variable compensation to be awarded to the rank and file by the exact same formula relative to the percentage of base pay as any future executive awards.

Surely the stockholders wouldn't object to paying the people who actually did the work instead of the speechmakers and golf players kept in their positions by a useless board of directors simply attempting to purchase loyalty and a buffer zone between themselves and extremely pissed employees, now would they?

Now - if that isn't rich enough for the charlatans we have masquerading as upper management, let them go elsewhere, that is, if they'll be had by anyone.

 

[FrequentFlierCA]

Goose: what you're proposing would significantly dilute the value of the stock, making your take much less. It's an interesting idea, but I don't think it's the way to go. Current shareholders would revolt.