Originally Posted by
velosnow
Stock buybacks are not allowed going forward and CEO/exec board salaries are capped via a matrix of company size/revenue. All excess cash goes into what is essentially an employ/company solvency trust that cannot be touched or raided via law. Once this trust reaches a certain dollar amount only then can exec bonuses be paid out from it, but it must retain a minimum figure based on revenue. So CEOs and investors can still get rich but also must be truly beholden to the people they employee.
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Employees are treated as economic widgets and are not considered by management in their calculas. An investor can "dump" their stock and move on. Employees are married to the airline for their career. But, management is loyal too who? They are loyal to management first, institutional investors second, fund managers third, standard wall street investors fourth, and employees fifth.
I will re-post my thoughts on this....
Howdy from the UAL side.
My 2 cents is this: stock buy backs benefit management's stock options and the institutional investors they court.. There is a small group of folks that feel it's a strategic move to help prevent a hostile take-over. But, there aren't too many Gordon Gecko's around any more. The real thing we should be telling management is this: Save up for a rainy day. and have access to cash via a substantial line of credit. It could be a pandemic, a public health crisis, or a national security event, or a global security threat. Those are all possibilities, and all require an executable plan.
Stock buy-backs don't figure into any of those plans. We can reasonably predict some sort of major crisis every 20 to 30 years. managements need to have plans ready and actionable when the balloon goes up. This profession hasn't been made whole since 9-11 and the airline pilots who staff it must sacrifice allot to get here and to stay here. Without pilots to staff the airline and to keep it staffed, you don't have an airline. Best to plan for the future. History has a way of repeating itself, even if the circumstances are not identical, the ramifications after the fact most certainly follow a predictable pattern.