Profit sharing concessions
07-26-2016 | 07:42 AM
#51
Sick of whiners
Joined: Jun 2015
Posts: 507
Likes: 0
From: 767 VEOP
Any 'trade' of profit sharing for pay rates is really a double hit for the pilots.
How?
Here's how: Let's say the company is going to make $8 Billion for the year (just spit balling here for the math).
Let's say we traded a 20% raise, for the same amount of profit sharing, 20%. Let's say that 20% in money is $1 Billion (again, just picking numbers for the math).
Ok, what just happened to the $8 Billion profit?
Well, now it's not going to be $8 Billion, only $7 Billion, because $1 Billion of it just went to fund our pay raise.
So now, we have cut our profit sharing, TWICE!
We traded away the 20% for the same amount in pay, but now any remaining profit sharing will be calculated on $1 Billion LESS in profits.
How?
Here's how: Let's say the company is going to make $8 Billion for the year (just spit balling here for the math).
Let's say we traded a 20% raise, for the same amount of profit sharing, 20%. Let's say that 20% in money is $1 Billion (again, just picking numbers for the math).
Ok, what just happened to the $8 Billion profit?
Well, now it's not going to be $8 Billion, only $7 Billion, because $1 Billion of it just went to fund our pay raise.
So now, we have cut our profit sharing, TWICE!
We traded away the 20% for the same amount in pay, but now any remaining profit sharing will be calculated on $1 Billion LESS in profits.
FUZZY MATH ALERT!!!
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?
07-26-2016 | 11:09 AM
#52
Gets Weekends Off
Joined: Jun 2015
Posts: 357
Likes: 0
From: CA
In other news this month....
Insider Activity: Insiders look pessimistic about the prospects of the company that they seem to offload shares while they are -22.65 down so far this year. A Exec. Chairman of the Board at Delta Air Lines, Inc. (DAL) sold shares in the company in a transaction completed on Friday July 15, 2016. Anderson Richard H offloaded 758,000 shares in the company at an average price of $40.07 and ended up generating $30,373,060 in proceeds. Anderson Richard H retains 194,946 shares in the company after this transaction. A CEO in the company, Bastian Edward H, on Wednesday May 18, 2016 collected $4,411,000 from the sale of 100,000 shares at $40.07 each. Insiders are expected to know better about the health and prospects of their company, which is why insiders’ move deserves attention.
.....while buying back billions in stock, ****ing away billions in fuel hedge losses. Unconscionable. Anderson learned from the best...
Insider Activity: Insiders look pessimistic about the prospects of the company that they seem to offload shares while they are -22.65 down so far this year. A Exec. Chairman of the Board at Delta Air Lines, Inc. (DAL) sold shares in the company in a transaction completed on Friday July 15, 2016. Anderson Richard H offloaded 758,000 shares in the company at an average price of $40.07 and ended up generating $30,373,060 in proceeds. Anderson Richard H retains 194,946 shares in the company after this transaction. A CEO in the company, Bastian Edward H, on Wednesday May 18, 2016 collected $4,411,000 from the sale of 100,000 shares at $40.07 each. Insiders are expected to know better about the health and prospects of their company, which is why insiders’ move deserves attention.
.....while buying back billions in stock, ****ing away billions in fuel hedge losses. Unconscionable. Anderson learned from the best...
07-26-2016 | 11:39 AM
#53
Gets Weekends Off
Joined: May 2015
Posts: 2,960
Likes: 0
From: Power top
FUZZY MATH ALERT!!!
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?
They can have profit sharing if they'd give me an equal value of lost pension in my own name. I'd take in Canadian Maple Leaf 1 ounce gold coins, .999 pure. Uncirculated.
07-27-2016 | 07:53 PM
#57
Runs with scissors
Joined: Dec 2009
Posts: 7,847
Likes: 0
From: Going to hell in a bucket, but enjoying the ride .
FUZZY MATH ALERT!!!
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?
Your "let's say we trade..." numbers look great from a symmetry standpoint on a forum post, but are completely unrealistic and misleading. Your example is NOT "the same amount" because your comparison is "apples and oranges", to use an old adage.
First, if you want to use a trade 20% of in pay, you need to multiply 0.20 times the pilot hourly pay total to come up with a $$$$$ amount. I am not certain, but I think the current PWA is worth ~$3B, of which ~$1.7B is block hour pay.
Then you need to equilibrate your calculated reduction in PS payout, and multiply that by the same hourly pay total. A change in the current trigger from where the transition from 10% to 20% occurs, would typically result in a low-to-mid single digit reduction in the PS total $$$$ payout. Then we could compare $$$$ to $$$$.
Your example would have been just as relevant if you said "let's say we trade 20% in pay for 20 acres of land or 20 tons of soybeans"
And your trading 20% for 20% example is far in excess of what the company would reach for and grotesquely more than the union would agree to in a BAD year. Looks great on a "what if" forum post, but not nearly grounded in reality. If you want to make a debateable argument, pls redo it with realistic numbers.
(I am not trying to carry company water here. The PWA is a super complex document, and IF we come to an agreement soon, I hope that I balance all of the changes against each other in deciding my vote. Any change, and I mean ANY change in the PWA PS formula will neccesitate complex analysis to determine true cause/effect in the future with unknown varying profit levels.)
And no, I'm not a mgt or ALPA shill. Just somebody trying to sift through all of the sometimes emotional craziness here. Using unrealistic numbers in your argument doesn't make the analysis any easier.
Or should I have stayed at a Holiday Inn Express last night?
Now, if to get that $1 Billion raise, we reduce our profit sharing payout by the same amount; $1 Billion, then we have cut it twice, because the profit is already going to be $1 Billion less, and then we 'traded' for the other billion. The company keeps the tax savings by moving $1 billion in 'Profits' to 'Operating Expenses' (pilot salary).
The devil would be in the details and how we set up the 'trade', but I have no doubt the company has "Top Men" all over it, and they will be sure to sell us all the Fuzzy Math we are stupid enough to buy!
As I said earlier, the company doesn't want to make this trade because they think profits are going down in the future, do they?
07-28-2016 | 05:20 AM
#58
Gets Weekends Off
Joined: Feb 2008
Posts: 20,870
Likes: 188
Well you are focusing on the 20% and as I said, I was just pulling the numbers out of my ass, but the point is, if we get a 'raise' of a dollar amount, say $1 Billion, then the profits go down by that amount. Yes? Do you agree? So we have already cut our profit sharing, because there will be less profit; $1 Billion less.
Now, if to get that $1 Billion raise, we reduce our profit sharing payout by the same amount; $1 Billion, then we have cut it twice, because the profit is already going to be $1 Billion less, and then we 'traded' for the other billion. The company keeps the tax savings by moving $1 billion in 'Profits' to 'Operating Expenses' (pilot salary).
The devil would be in the details and how we set up the 'trade', but I have no doubt the company has "Top Men" all over it, and they will be sure to sell us all the Fuzzy Math we are stupid enough to buy!
As I said earlier, the company doesn't want to make this trade because they think profits are going down in the future, do they?
Now, if to get that $1 Billion raise, we reduce our profit sharing payout by the same amount; $1 Billion, then we have cut it twice, because the profit is already going to be $1 Billion less, and then we 'traded' for the other billion. The company keeps the tax savings by moving $1 billion in 'Profits' to 'Operating Expenses' (pilot salary).
The devil would be in the details and how we set up the 'trade', but I have no doubt the company has "Top Men" all over it, and they will be sure to sell us all the Fuzzy Math we are stupid enough to buy!
As I said earlier, the company doesn't want to make this trade because they think profits are going down in the future, do they?
07-28-2016 | 05:28 AM
#59
Gets Weekends Off
Joined: Jun 2015
Posts: 4,116
Likes: 1
Omg...... wouldn't want to find ourselves running afoul of the AMT 'quagmire'.
No, we would be far better off perpetually stuck in the EITC 'quagmire'.......I believe that was accomplished quite nicely on the b-scale.
No, we would be far better off perpetually stuck in the EITC 'quagmire'.......I believe that was accomplished quite nicely on the b-scale.
07-28-2016 | 05:57 AM
#60
Gets Weekends Off
Joined: Jul 2014
Posts: 429
Likes: 0
You need to factor in the reduction in profit sharing also generated by the non cons getting raises when we don't. The 18% awarded last year will make a big dent in our checks come Feb. Another Elephant in the room will be tax issues when we finally get a TA. If it's not done by the end of this year and it appears that is unlikely any retro or signing bonus will produce serious tax implications and reduce the gain. Virtually every Delta pilot will be thrown into the AMT quagmire!
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