Big Bonusses for AMR execs
AA management appreciates those generous concessions from the APA. Garton alone will be pocketing almost $2 million in April.
AP
American Airlines Execs to Get Bonuses
Friday January 6, 12:22 pm ET
American Airlines Executives to Get Bonuses Despite Red Ink Due to Strong Parent Showing
FORT WORTH, Texas (AP) -- Executives at American Airlines are expecting April stock-based bonuses that could total more than $500 million because shares of parent AMR Corp. have risen despite heavy losses at the nation's largest carrier.
About 1,000 employees from top executives to mid-level managers are expected to receive bonuses under a plan that AMR's board approved in 2003.
The amount of the bonuses will be based on AMR's stock price in April. At AMR's current stock price, they would range from about $2,000 to about $1.7 million for Daniel P. Garton, the airline's executive vice president for marketing.
Chairman and Chief Executive Gerard J. Arpey did not take part in the bonus plan.
The plan was written in 2003, when AMR hovered near bankruptcy, and it rewarded executives and managers if AMR's stock performed as well or better than that of other airline companies through the end of 2005. During that time, AMR shares gained 169 percent.
As previously disclosed in regulatory filings, management employees were given units that will vest in April at a strike price of $5. AMR shares fell 31 cents, or 1.4 percent, to $22.20 in afternoon trading Friday on the New York Stock Exchange.
Senior Vice President Jeff Brundage said in a letter to the management employees Thursday that, assuming a share price of $20 in April, the value of employee bonuses could top $568 million.
The bonuses "reward managers for superior performance," Brundage said. "Our compensation policy is designed to hold managers and executives directly accountable for the company's performance by placing a significant portion of your total compensation at risk when the company does not meet or exceed predetermined performance goals."
The company sent copies of Brundage's letter to leaders of American's three unions on Thursday. Union officials did not immediately return calls for comment Friday.
Some mid-level managers received 50 units, worth more than $2,000 at AMR's current stock price. Garton got 44,000 units. Unit amounts varied based on job level and performance, said Lisa Bailey, a spokeswoman for American.
Bailey said similar management-bonus plans were approved in 2004 and 2005 and also cover about 1,000 managers.