The almost 18% increase in non pilot pay raises will have a far greater impact on the profit sharing. I posted what the dollar impact would be looking at past years. With the stock at the current price the impact would only be about 10 million total on 50 million in increased costs. The raises granted will result in about 800 million in increased costs or 160 million less in the PS pool.

So, executive equity compensation I guess is no big deal.


Riiiiight.


And, I have to ask, so what's your point?

If mgmt was waiting for us to agree to NA15 before giving raises to the non contract employees, and they gave them raises anyway, wouldn't that have also affected our profit sharing?

The only difference I see is that we would have gotten PS on 8% more pay rate but, at a diluted (by the new formula) value.

So, I see no point or purpose in your argument.

You forget that the pool is also divided based on each employees percentage of earnings. The raise both reduces the pool and decreases our percentage of the pool.
The main point is however that the FUD being posted about management stock based compensation is way overblown. They have already compensated themselves quite well. The odds that they will increase that compensation to a point where it has a significant impact on the PS is virtually non existent. As I pointed out in another thread if management did that it would be the lead article in every financial publication for a week and there would be a shareholder revolt.
If someone is truly worried about a decrease in PS then watch fuel prices. Their impact will dwarf everything else.

"We don't think they'll do that."

Let me translate for you rocket surgeons: the 18% pay increase to non-pilots will eat away at our profit sharing, thereby making it worthless to pilots, so why not trade it away for a pay increase?

Did I miss anything?

Just one more reason not to water down the PTIX formula. With the non-contract employees profit sharing capped we are the only employees eligible for the remaining portion of the profit sharing.

The Stock compensation of the past may not look like what the company plans on doing in the future and how many employees it will include. Could be a substantial more than you think.

Also I say again the big money grab is in the change of stock value in the equities with the proposed change in pretix definition. If I had the exact wording of what the definition is under our current contract and what was proposed I could probably monetize it for this year. I don't think you would like how much less "profit" there would be to split up.

I understand your point, Right now we have a good PTIX formula, not as good as pre2012 but good. Anything less is a concession. The profit will be better in the future, not worse. While the costs will increase for compensation the 2016 Q1+2 cost for fuel will be substantially less.

Also with JVs coming with our equity partners we will profit twice. The first will be profits from sales and the second will be dividend and stock appreciation from the ownership of those companies. GOL is trading at less than $1 a share with a market cap of about $250 million. We already own 10% of GOL. We could raise our ownership to 50% for $100 million. When the Brazilian economy turns around that could be huge, they are the largest operator in Brazil.

http://finance.yahoo.com/q?s=gol

I guess something must have gotten lost in translation because I don't follow your argument. Are you suggesting our benevolent management gave the non-contract such a huge raise that it will virtually consume all of DALs profits.

Can you please show us a little math on this one. You don't have to be specific, but I am curious as to how you think the effect of this raise will be make our PS on approximately $6 billion "worthless to pilots."

Thanks Scoop

That's not correct. Our payout from the pool will be based on the current formula with a assumed payout calculated for the non contract employees.