Senior Management''s Bankrupcy-Exempt Irrevocable Trust Retirement Fund

[Bob Owens]

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On 4/17/2003 3:39:25 PM fedup wrote:


Bob,
Will this supplemental bonus hold up in court? Wasn't there a bill passed reently that tied aid to compensation? There is no fed up, there are five of us here on layover. One of the F/A's is on somewhat familiar terms with John McCain (sp?). Wasn't he the one who introduced this caveat? We have read the letter from the TWU saying they won't sign off, but can we believe anything they say.
I tell you this company does so much for employee morale, and our unions are great cheerleaders........

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Forget McCain, the airlines own him despite his posturing. He is also pushing S-1327.

No, I would NOT believe what Little says, I know, I,m the Treasurer of Local 562 and have been lied to by him in the past.

Dont count on the courts either. They are just as corrupt as McCain and our executives. They supported the bonuses for the USAIR executives as they were taking money away from the workers. There is only one thing that will bring reform. A shutdown of the entire system by labor. But, it would have to be a spontaneous event because our very comfortable leaders will never call for it. We need to shut the whole thing down and say enough, fix it or shut it down!

 

[fedup]

Bob,
Will this supplemental bonus hold up in court? Wasn''t there a bill passed reently that tied aid to compensation? There is no fed up, there are five of us here on layover. One of the F/A''s is on somewhat familiar terms with John McCain (sp?). Wasn''t he the one who introduced this caveat? We have read the letter from the TWU saying they won''t sign off, but can we believe anything they say.
I tell you this company does so much for employee morale, and our unions are great cheerleaders........

 

[Bob Owens]

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On 4/17/2003 10:32:34 AM WXGuesser wrote:


And they are different from management in any company how? This is the way it is in ANY company nowadays. Just because it is unethical doesn''t mean it''s illegal. And there isn''t a damn thing we can do about it. We have no way to "punish" management. Even if this "pension fund" hadn''t been done, what could we have done? Even if someone is forced to leave management, they will get snapped up by someone else. Look at the numerous folks involved in the USAir/United fiasco. Most of them have ended up somewhere. It''s all a big game to them.

Life is not fair. Life is pain. Anyone who tells you differently is selling something.

TANSTAAFL


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Why is it that when Union leaders do unethical things there is soon a bill being proposed to make it illegal but when business leaders do similar things its not? These people make the rules to suit themselves and as long as we tolerate it things will get worse and worse. Could we fire Carty? Sure we could. If we all walked off the job and demanded that all AMRs agreement were voided it would happen. Why? Because the powers at be would be so shocked and alarmed that they would gladly thow Carty to the wolves.

Right now we see where the Union says they will not ratify this agreement unless Carty changes his pension guarantees. Is this suposed to mean something to us? Will those millions be used to give us back a week of vacation? I doubt it. The company reportedly told the Union about this but made them sign a confidentiality agreement. Little denies it. Who is lieing? Well supposedly the union had full access to the books. Well was it there or not? What else did they miss? Maybe they missed a whole lot of things and the six year sham that THEY JUST SOLD TO THEIR MEMBERS was unneccisary. To me I think we should pursue a DFR against Mr Little. In my opinion the only reason why Little is objecting is because in the USAToday it says he knew about it but did not tell us as he was telling us all the terrible things that would happen if we went BK. Now reportedly Little will not sign until Carty changes this. Why? All of a sudden Littles pride is more important than staying out of BK? Will Carty changing this pension really make a difference, I''m still going to be out 20K/year FOR THE NEXT SIX YEARS thanks to Litle and company''s hard sell and incompetance. All this posturing is pure BS. I''m confident that Little knew all along but kept it to himself, just like he did all the rest if the Bankruptcy rules and our chances of coming out of BK with less damage than what he proposed that we accept. Jim, when you make a deal with the Devil you should not be shocked when he sticks it to you.

Little must go.

 

[KCFlyer]

Any infraction which is deemed serious in nature (i.e., personal threat to body, disclosure of confidential personal information, aggravated and persistent violations of a lesser nature over a short period of time) can result in immediate suspension by agreement of any three of the moderators/administrators.

Gosh, by my count, Fedup has already violated the terms of this website in his or her first and second post.

Just a note fedup - if you''ll look at the bottom of the posts, you''ll see a little line that says IP: Recorded. That pretty much means that while connected1 or Eric doesn''t know if your male or female, the staff at USAviation can most certainly find out an awful lot about you with that little number. You might think about that before you threaten to "alter" someones food on any flight you''re working.

 

[JFK777]

BOB Owens,

THE PBGC has a maximum benefit they pay which is why you hear pilots complaining more the lower paid airline workers. While some F/A or mechanics may get less then their full benefit,the maximum is a higher percentage of their promised pension. CEO''s or Janitors get the same maximum coverage insurance by the PBGC.

 

[Oliver Stone''s Apprentice]

Don't get me wrong, folks. From a employee standpoint, I can completely understand why people would be pissed, since few outside the ranks of senior management will ever see a pension over $200K.

I'm just looking at it as an accountant.

My only comment on this is so far has been that creating the trust is what other companies have done in the past few years with supplemental plans used to support retirement benefits over and above the $200K limit set by the IRS.

From a purely financial point of view, protecting retirement obligations, regardless of who those obligations are to, is prudent. Ask any accountant, small business owner, or lawyer.

If you see my black-and-white view as being smug, that's your opinion. I just don't see a need to interject a lot of emotion into my posts...

 

[Bob Owens]

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On 4/17/2003 5:08:06 PM eolesen wrote:

Don''t get me wrong, folks. From a employee standpoint, I can completely understand why people would be pissed, since few outside the ranks of senior management will ever see a pension over $200K.

I''m just looking at it as an accountant.

My only comment on this is so far has been that creating the trust is what other companies have done in the past few years with supplemental plans used to support retirement benefits over and above the $200K limit set by the IRS.

From a purely financial point of view, protecting retirement obligations, regardless of who those obligations are to, is prudent. Ask any accountant, small business owner, or lawyer.

If you see my black-and-white view as being smug, that''s your opinion. I just don''t see a need to interject a lot of emotion into my posts...and please hold the girt bar sauce.

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[Buck]

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On 4/17/2003 4:35:03 PM JFK777 wrote:

BOB Owens,

THE PBGC has a maximum benefit they pay which is why you hear pilots complaining more the lower paid airline workers. While some F/A or mechanics may get less then their full benefit,the maximum is a higher percentage of their promised pension. CEO''s or Janitors get the same maximum coverage insurance by the PBGC.

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THE PBGC is Broke!

 

[WingNaPrayer]

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On 4/17/2003 5:08:06 PM eolesen wrote:

My only comment on this is so far has been that creating the trust is what other companies have done in the past few years with supplemental plans used to support retirement benefits over and above the $200K limit set by the IRS.

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This is different. You can look at this from any angle you wish, it's still FRAUD, pure and simple. This information was deliberately withheld from Union representatives, and employees because executive KNEW that if either of them found out about it, each and every vote would have come back with a resounding NO!

The executive withheld information . . .filed for an extension to make sure it would not become known by the employees before the vote. . .demanded that the voting be closed and counted the day before this information was mandatorily released, and then when they didn't get the vote they wanted, granted a one day extension and even though the information became public, the executive ordered a massive campaign to instill the fear of bankruptcy and job loss into the flight attendants so they would not pay attention to this SEC filing.

If it's so "business as usual" as you choose to put it, then why did executive go to such great lengths to keep it hidden? Why not lay all their cards on the table and let the chips fall where they may? No, they played games, they lied, deceived, and they stabbed each and every employee of AMR/American Airlines in the back.

FRAUD, that's what it was, no doubt about it whatsoever. Executive knew it, executive hid it, and executive is now laughing their collective asses off about how they "legally" raped every employee and their families of their income, careers, and futures.

Say it with me . . .F R A U D!
***** ***** ***** ***** *****

 

[Buck]

Highlights in RED The company has said that it informed Mr. Little of the TWU ATD?




IMMEDIATE ATTENTION
[SIZE= 10pt]April 17, 2003[/SIZE]
[SIZE= 10pt][/SIZE]
[SIZE= 10pt]TO: [/SIZE]All TWU/AA Members
[SIZE= 10pt]Dear Sisters & Brothers:[/SIZE]
[SIZE= 10pt]Yesterday, as contract ratification for all three union groups was being completed, the Company made a filing with the Securities and Exchange Commission, indicating it had established a special pension fund for its executives. The existence of this fund was never revealed to our consultants while they examined AA's books, nor were we informed of it in the bargaining which led to the concessions we agreed to in order to avoid a bankruptcy. We regard the failure to timely disclose the existence of this fund in bargaining by American as a material breach of its obligations to provide relevant information.

The concessions our members barely ratified the other day were based on the premise of shared sacrifice. This fund is the opposite of shared sacrifice and calls into question the basis of each of our contracts. We have signed no new agreement, and in light of the disclosure in AA's SEC filing, we must reconsider whether we will sign off, even if the consequence is a bankruptcy. Unless the Company reforms itself on the issue of executive compensation, there is no basis to cooperate in its effort to survive.[/SIZE][SIZE= 10pt][/SIZE]
[SIZE= 10pt]Sincerely & fraternally,[/SIZE]
[SIZE= 10pt][/SIZE]
[SIZE= 10pt] [/SIZE]
[SIZE= 10pt]James C. Little
Director Air Transport Division
Intl. Administrative Vice President[/SIZE]
[SIZE= 10pt][/SIZE]
Associated Press
American Airlines Trust Protected Execs
Thursday April 17, 2:24 pm ET
By Angela K. Brown, Associated Press Writer

FORT WORTH, Texas (AP) -- As it piled up record losses and made deep cost cuts, American Airlines created a pension trust that protected some benefits for dozens of top executives in case the carrier went into bankruptcy.
The executives' deals, which included huge bonuses for a few, were disclosed in a regulatory filing late Tuesday -- after the scheduled end of voting on steep concessions by the airline's major unions.
Few employees learned of the executive benefits until after they had approved the last of $1.8 billion in annual wage and other concessions, which the world's largest airline said it needed to avoid bankruptcy.
Voting for the pilots and ground workers ended Tuesday morning. Flight attendants were given a one-day extension, and in a remarkable reversal accepted $340 million in labor concessions a day after narrowly rejecting them.
"We just got slammed with this. ... We're looking into this right now," said George Price, a spokesman for the flight attendants' union. He declined further comment.
Company spokesman Bruce Hicks defended the trust and said it was disclosed to union leaders and their consultants over the past several weeks -- but under a confidentiality agreement that prohibited them from informing rank-and-file workers.
"Retention benefits are designed to keep key senior management who are constantly being wooed by other companies," Hicks said.
Hicks said the extra pensions were similar to a supplemental plan for American's pilots, which he said also would be protected in bankruptcy. Ground workers and flight attendants, who earn far less than pilots, have no such a plan, he said.
According to the filing with the Securities and Exchange Commission by American's parent, Fort Worth-based AMR Corp., the company funded a pension trust for 45 top executives in October that protected some of their benefits even if the carrier filed for bankruptcy protection.The company did not indicate the cost of funding the trust, which Hicks said was 60 percent funded. The existence of the trust was first reported Thursday by The Wall Street Journal.
In addition, the company offered its six top executives bonuses double their base salaries if they remain until early 2005.
Among the executives in line to receive the bonuses is chairman and chief executive Donald J. Carty, who had told workers last month that he would take a 33 percent pay cut. His salary in 2001 was $585,000. Carty did not publicly discuss the bonus.
In the months since the trust was created, the company demanded pay cuts of 23 percent from pilots and 16 percent from flight attendants and ground workers, effective May 1.
And after the flight attendants vote, American executives said that despite those hefty give-backs, the carrier still faces a tough environment where bankruptcy remains a possibility.
"We are not out of the woods yet," Carty said, citing the economy and other factors beyond the company's control.
The vote marked a swing of 1,642 votes from a day earlier when flight attendants narrowly rejected the package of layoffs, wage cuts and reduced benefits. They were given an extra day to vote after some workers complained about trouble voting online and by telephone.
"We are almost solely returning AMR to profitability under our concessions," said 26-year flight attendant Deborah Seale, who voted against the deal. "Management will get a 4 percent cut off the first $30,000 of their salary, and most of us don't even make $30,000 a year."
If flight attendants had rejected the labor cuts, AMR's board of directors was prepared Wednesday night to approve a Chapter 11 bankruptcy court filing to conserve cash and avoid credit payments of at least $50 million, Hicks said.
Airlines have been reeling for months, hurt by the sluggish economy, fallout from the Sept. 11 attacks, fears over the SARS virus and the war in Iraq. United Airlines is already in bankruptcy; US Airways only recently emerged from it.
American has struggled against low-cost competition and AMR has lost nearly $5.3 billion in the past two years. To stay afloat, the airline asked its three biggest unions to approve $1.8 billion in labor cuts, including the layoffs of 2,500 pilots, 2,000 flight attendants and up to 1,400 ground workers.
Union leaders reluctantly backed the plan, saying cuts could be even worse in bankruptcy.
Altogether, American got sought $660 million in annual concessions from its 12,000 pilots, $620 million from 34,000 ground workers and $340 million from the flight attendants.
Fitch ratings service said the concessions would bring American's unit labor costs in line with rivals Continental, US Airways and United.
In Thursday trading on the New York Stock Exchange, AMR shares rose 87 cents, or 21 percent, to $5.10. Other airline stocks also rose as investors were encouraged by American's ability to cut costs outside of bankruptcy. Continental Airlines shares gained 11 percent, while Delta Air Lines shares surged 10 percent.

 

[desertfox]

This is much adu about nothing....cut and past this link....SERP is used all over, AA''s wasnt even fully funded.

This board is a soap opera...it''s getting as bad as Yahoo''s.
If more would use their heads instead of emotion it would be a more useful board. I realize emotions are raw, but do some looking before leaping to conclusions.

http://ilf.hartfordlife.com/public/products/serp/index.shtml
http://www.sdcs.k12.ca.us/serp/
http://www.principal.com/keyemployees/serp.htm

SERP = Supplemental Executive Retirement Plan – A type of nonqualified deferred compensation plan. Generally, benefits are paid from the employer’s general assets, and no amounts are specifically earmarked for future benefit payments.

 

[FA Mikey]

Pilots at American Airlines said on Thursday they were irate over news that executives at the world''s largest airline had funded special pensions and wanted clarification as to why they were not informed while union concession negotiations took place

 

[spacewaitress]

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On 4/17/2003 5:58:53 AM JFK777 wrote:

The reality of BK sucks for everyone but pensions are unattachable by creditors so all is not lost.

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And I have beachfront property in Denver, too!

 

[FA Mikey]

To set the record straight: APFA had absolutely no knowledge of this special trust fund until today''s published reports appeared and was never briefed on these special pension benefits. The information regarding executive compensation that was provided to APFA has already all been made public. APFA is outraged by these latest revelations, which extend even beyond the sorry course of conduct that the Company pursued throughout the past several weeks.

 

[atabuy]

Company spokesman Bruce Hicks defended the trust and said it was disclosed to union leaders and their consultants over the past several weeks -- but under a confidentiality agreement that prohibited them from informing rank-and-file workers.

If this type of deal is normal, why would the company want a confidentiality agreement.
Answer:
Because they would never have been able to get any agreements if the membership knew about this.