Will they learn anything?
04-07-2020 | 07:29 AM
#11
Line Holder
Joined: Nov 2010
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This has been my argument since this happened. I keep hearing too much cash on hand and too little debt is bad. Well, maybe it’s time for some regulatory protections from congress. We seem to be the first hit when things go bad but we aren’t “allowed” to carry extra cash on hand to withstand these shocks. It’s time for a change. We should demand it as employees, taxpayers should demand it because they are bailing us out. I’m planning to write my reps until I get a legit answer.
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.
I'm not an economist, but something along these lines should probably happen going forward.
04-07-2020 | 07:33 AM
#12
Gets Weekends Off
Joined: Jun 2015
Posts: 4,116
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And maybe instead executed a voluntary termination to freeze plan and transitioned to a DC that would have freed delta to put some of all that excess cash into our individual retirement accounts.
I think the self directed limit in 2000 was mid $30k/year
04-07-2020 | 08:45 AM
#13
Gets Weekends Off
Joined: Mar 2015
Posts: 13,221
Likes: 665
From: ir.delta.com
Similar thoughts and in fact have an idea brewing...
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.
I'm not an economist, but something along these lines should probably happen going forward.
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.
I'm not an economist, but something along these lines should probably happen going forward.
04-08-2020 | 08:17 AM
#14
Gets Weekends Off
Joined: Aug 2013
Posts: 2,159
Likes: 1
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.
.
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.
04-08-2020 | 08:24 AM
#15
:-)
Joined: Feb 2007
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Besides management incompetence I believe our financial laws would also need to be updated. If airlines accumulate a lot of excess cash doesn't it make them a juicy hostile takeover target ala Lorenzo and Icahn? There was definitely some things management should have done differently which would have minimized our exposure or at the very least it could have bought us more time to respond.
This is all Monday morning quarterbacking but why not use some of the free cash flow to pay cash for Jets? Fuel costs decrease greatly with a reduced flight schedule. Employee costs can also be reduced with leaves, SILs, early outs and furloughs depending on the time period involved. But I assume aircraft loan payments must go on. Perhaps DAL can get a grace period. Another thing to look at is a one time dividend bump, stressing the one time aspect so it would not be expected and not seen as decreasing dividends. Not even sure that would work.
In any case the very nature of stock buybacks for airlines seems to make them counterproductive. The only times airlines have extra cash to buy back stock is when things are humming along - consequently the stock is usually priced high at such times. When the stock is in the dumps (ie now) airlines usually don't have any excess cash to buy back shares.
So to answer your question - No I don't see anything being changed by management either learning or becoming more altruistic. If any change comes in my opinion it will be structural and encouraged through updating laws and financial rules.
Scoop
This is all Monday morning quarterbacking but why not use some of the free cash flow to pay cash for Jets? Fuel costs decrease greatly with a reduced flight schedule. Employee costs can also be reduced with leaves, SILs, early outs and furloughs depending on the time period involved. But I assume aircraft loan payments must go on. Perhaps DAL can get a grace period. Another thing to look at is a one time dividend bump, stressing the one time aspect so it would not be expected and not seen as decreasing dividends. Not even sure that would work.
In any case the very nature of stock buybacks for airlines seems to make them counterproductive. The only times airlines have extra cash to buy back stock is when things are humming along - consequently the stock is usually priced high at such times. When the stock is in the dumps (ie now) airlines usually don't have any excess cash to buy back shares.
So to answer your question - No I don't see anything being changed by management either learning or becoming more altruistic. If any change comes in my opinion it will be structural and encouraged through updating laws and financial rules.
Scoop
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