AMR chief to get 23% raise

11:10 PM CDT on Tuesday, July 25, 2006

AMR Corp. chief executive officer Gerard Arpey, whose American Airlines is the world's largest carrier, will get a 23 percent raise and other long-term pay incentives to bring him in line with his CEO peers.

Mr. Arpey, 47, will earn an annual base salary of $650,000, up from $526,620, according to a federal filing Tuesday. The AMR board's compensation committee found his pay trailed that of executives at similar companies, the filing said.

The raise comes amid strains in the relationship between Mr. Arpey and American's unions, which were angered by $100 million in executive bonuses triggered by AMR's rising stock price.

American asked its pilots' union July 21 to start early contract talks in an effort to improve productivity.

Shares of AMR rose 55 cents to $23.55. The stock has gained 75 percent in the past year.

Bloomberg News