Spirit of NKS, Part II
04-26-2016, 11:40 AM
#5601
Gets Weekends Off
Thread Starter
Joined APC: Feb 2008
Position: Switch, Lever & Light Specialist
Posts: 1,065
I sense a new morale low-point coming directly. It's more than clear they have zero intention of paying us what we deserve. What's it going to take for people to wake up and stop doing favors?!?
04-26-2016, 11:40 AM
#5602
Gets Weekends Off
Joined APC: Jan 2008
Position: 319/320/321...whatever it takes.
Posts: 492
Originally Posted by Judge Smails
Here's the transcript of the most interesting part of the call this morning:
Jamie N. Baker - JPMorgan Securities LLC
Okay. And as a followup to that, Bob, I know you want to avoid negotiating in public, but the industry wage bar is rising at a pretty rapid clip for aviators and your cost structure obviously is already quite lean. Is it inevitable that the next pilot contract reduces margins? I mean, when I think about the flexibility that some of your competitors have, they can densify, they can make offsetting revisions to profit sharing, they can add back seats, that kind of stuff. I mean you're already doing all of that stuff. So am I missing something?
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
No, I think, there are again a couple of differences and like I said, in terms of pricing, there are tiers. You have, again, Frontier and Allegiant well below us and that's...
Jamie N. Baker - JPMorgan Securities LLC
Yes.
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
...our peer group, and you move into another bracket, you have JetBlue slightly above us and then you actually have the legacies, and I think there is a context for all this stuff. And in terms of what we offer, we offer fast growth, our pilots become captains much earlier than their peers.
Jamie N. Baker - JPMorgan Securities LLC
Yes.
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
And there is a benefit of that. And so there is a benefit of maintaining a higher growth rate. And that's what we primarily offer. None of the large carriers can get you to that left seat in a couple of years and that's a primary advantage. That's a primary reason or a key reason for coming here and quite frankly the longer we can maintain a higher growth rate that will provide the best benefit to the pilot group. So that's kind of the context that we're thinking about and like I said that's the way we will approach our negotiations.
He's either completely delusional, or feeding the Wall St analysts what they want to hear.
Jamie N. Baker - JPMorgan Securities LLC
Okay. And as a followup to that, Bob, I know you want to avoid negotiating in public, but the industry wage bar is rising at a pretty rapid clip for aviators and your cost structure obviously is already quite lean. Is it inevitable that the next pilot contract reduces margins? I mean, when I think about the flexibility that some of your competitors have, they can densify, they can make offsetting revisions to profit sharing, they can add back seats, that kind of stuff. I mean you're already doing all of that stuff. So am I missing something?
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
No, I think, there are again a couple of differences and like I said, in terms of pricing, there are tiers. You have, again, Frontier and Allegiant well below us and that's...
Jamie N. Baker - JPMorgan Securities LLC
Yes.
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
...our peer group, and you move into another bracket, you have JetBlue slightly above us and then you actually have the legacies, and I think there is a context for all this stuff. And in terms of what we offer, we offer fast growth, our pilots become captains much earlier than their peers.
Jamie N. Baker - JPMorgan Securities LLC
Yes.
Robert L. Fornaro - President, Chief Executive Officer & Class III Director
And there is a benefit of that. And so there is a benefit of maintaining a higher growth rate. And that's what we primarily offer. None of the large carriers can get you to that left seat in a couple of years and that's a primary advantage. That's a primary reason or a key reason for coming here and quite frankly the longer we can maintain a higher growth rate that will provide the best benefit to the pilot group. So that's kind of the context that we're thinking about and like I said that's the way we will approach our negotiations.
He's either completely delusional, or feeding the Wall St analysts what they want to hear.
04-26-2016, 11:43 AM
#5603
Gets Weekends Off
Joined APC: Jul 2015
Position: Slowly drifting left of course!
Posts: 108
Originally Posted by Judge Smails
He's either completely delusional, or feeding the Wall St analysts what they want to hear.
My guess, investors initial reaction to the numbers was good. But then they got a chance to listen to or read the transcripts, and are growing as tired of their "cost neutral" initiatives to change the image of the company as we are. Quickly seeing Franaro vs. Baldanza as really just lipstick on the same old pig. I wonder if he's actually gone to Wall Street and offered some high fives? I'm sure that will change their mind!
I'd also like to think their complete denial of the rising cost of a new pilot contract, that raises the bar every day, was seen as a negative. Probably wishful thinking on that part.
04-26-2016, 12:20 PM
#5604
Banned
Joined APC: Sep 2015
Position: A320
Posts: 568
Originally Posted by Cruise
I sense a new morale low-point coming directly. It's more than clear they have zero intention of paying us what we deserve. What's it going to take for people to wake up and stop doing favors?!?
04-26-2016, 12:26 PM
#5605
Line Holder
Joined APC: Jan 2016
Posts: 37
"After adjusting for the economic impact of our tentative flight attendant agreement, including the $8.4 million ratification incentive accrual, we are confident we can hold the line on costs and now estimate our full year 2016 adjusted CASM ex-fuel will be about flat year over year." - Ted Christi
...so no plans for a new contract in '16 unless it's cost neutral
...so no plans for a new contract in '16 unless it's cost neutral
04-26-2016, 01:03 PM
#5606
Line Holder
Joined APC: Sep 2015
Position: The Yellow Bus
Posts: 30
No wonder JB does not care if his family (us) get a raise:
John Bendoraitis . On September 7, 2013, we entered into an offer letter with John Bendoraitis, our current Senior Vice President and Chief Operating Officer. Under that letter agreement, Mr. Bendoraitis is entitled to receive an annual base salary from us initially set at $320,000 and a target bonus level of 70% of base salary with a maximum payout capped at 200% of base salary. In addition, pursuant to his employment letter agreement, Mr. Bendoraitis provided for a sign-on grant of 32,394 units of equity-based long-term incentive, under our 2011 Plan, which grant was comprised 50% of time-vested restricted stock units and 50% of performance share units, on the same terms as the 2013 grants for other senior officers. The letter agreement also provided for a signing cash bonus of $115,000, a relocation allowance for Mr. Bendoraitis and his family of up to $60,000 (subject to documentation of expenses actually incurred) and positive space travel on our airline for the executive and his immediate family.
John Bendoraitis . On September 7, 2013, we entered into an offer letter with John Bendoraitis, our current Senior Vice President and Chief Operating Officer. Under that letter agreement, Mr. Bendoraitis is entitled to receive an annual base salary from us initially set at $320,000 and a target bonus level of 70% of base salary with a maximum payout capped at 200% of base salary. In addition, pursuant to his employment letter agreement, Mr. Bendoraitis provided for a sign-on grant of 32,394 units of equity-based long-term incentive, under our 2011 Plan, which grant was comprised 50% of time-vested restricted stock units and 50% of performance share units, on the same terms as the 2013 grants for other senior officers. The letter agreement also provided for a signing cash bonus of $115,000, a relocation allowance for Mr. Bendoraitis and his family of up to $60,000 (subject to documentation of expenses actually incurred) and positive space travel on our airline for the executive and his immediate family.
04-26-2016, 01:04 PM
#5607
Line Holder
Joined APC: Sep 2015
Position: The Yellow Bus
Posts: 30
If this is how the determine their pay and benefits, then let them eat cake and share it too:
Determination of Compensation
The Compensation Committee meets periodically to specifically review and determine adjustments, if any, to the CEO’s compensation, including his base salary, annual bonus compensation and long-term equity awards, and to review and consider recommendations of the CEO with respect to the other NEOs’ base salaries, annual bonus compensation and long-term equity awards. For 2015 , the Compensation Committee determined each individual component of compensation for our NEOs. Decisions of our Compensation Committee pertaining to the compensation of our NEOs and the Company’s executive compensation programs are regularly reported to, and in many instances concurred by, the full Board. The Compensation Committee annually evaluates our company-wide performance against the approved operating plan for the prior fiscal year. The Compensation Committee also meets periodically to discuss compensation-related matters as they arise during the year. For each year, our CEO evaluates each other NEO’s individual performance and contributions to the Company’s success and reports to the Compensation Committee his recommendations regarding each element of the other NEOs’ compensation. The CEO does not participate in any formal discussion with the Compensation Committee regarding decisions on his own compensation, and he recuses himself from meetings when his individual performance is evaluated and his compensation is discussed and decided.
In July 2011, the Compensation Committee engaged Willis Towers Watson as an independent compensation advisor to assist the Compensation Committee with our executive compensation program design. Since that time, Willis Towers Watson has worked closely with the Compensation Committee to determine an appropriate executive compensation strategy that supports our core business objectives: maintaining low costs, profitable growth, safe and reliable operations and sound cash flow. In considering approaches to executive compensation, the Compensation Committee continuously reviews ways to strengthen the alignment of management’s interests with the interests of shareholders, strengthen our ability to attract, motivate and retain key executive talent and design plans that account for the relatively high volatility of our industry.
In order to assist the Compensation Committee in setting appropriate compensation metrics and target amounts, in October 2015, Willis Towers Watson provided an updated competitive assessment of our 2015 executive compensation levels. After consideration, and based on recommendations from Willis Towers Watson, the Compensation Committee approved the following public companies as an appropriate talent-competitor peer group for compensation market comparison purposes for 2015 (the "Compensation Peer Group"):
•
Alaska Air Group, Inc.
•
Allegiant Travel Company
•
Hawaiian Holdings Inc.
•
JetBlue Airways Corporation
•
Republic Airways Holdings Inc.
•
Sky West Inc.
•
Virgin America
The Compensation Peer Group was the same peer group used in 2014 with the addition of Virgin America. The selection of companies for the Compensation Peer Group focused on small to medium-sized passenger carriers as an appropriate population for assessing the amounts and percentile rankings of compensation elements for NEOs, including base salaries, short-term incentives (bonuses) and long-term equity-based incentives. Due to its initial public offering based equity grants, Virgin America's long-term incentives data was not included in the 2015 benchmarking analysis. Data for Allegiant Travel Company's CEO (who is also a large shareholder of such company) was also excluded due to particularities of that executive's pay package. The Compensation Committee determined that the Company's competition for executive talent came significantly from the foregoing listed carriers. Willis Towers Watson primarily used the Compensation Peer Group to assess the competitiveness of our Chief Executive Officer’s, Chief Operating Officer’s, and Network and Revenue Management Senior Vice President's compensation, as these positions would normally be recruited from other passenger airlines.
In assessing the compensation of our Chief Financial Officer and General Counsel, Willis Towers Watson used a blended approach consisting of both Compensation Peer Group proxy data and broader industries survey data, adjusted for revenue size, as these positions could also generally be recruited from companies in other industries. For its October 2015 analysis, the survey data were taken from the following three executive pay surveys:
29
Table of Contents
•
Seabury 2015 Airline Industry Compensation Survey Analysis;
•
Towers Watson 2015 Compensation Data Bank (CDB) General Industry Executive Compensation Survey Report; and
•
William M. Mercer 2015 Executive Compensation Survey.
The data from the two general industry executive surveys were reduced in scope to focus on companies with revenues approximating the Company’s last twelve months of revenues of approximately $2 billion as of June 30, 2015. The Compensation Committee was not aware of the individual participating companies in the surveys and reviewed the data in a summarized fashion.
At the same time, the Compensation Committee also approved the following larger group of publicly traded airline companies (the "Performance Share Peer Group") as an appropriate investor-capital peer group for measuring total shareholder return under the performance share units awarded to our executive officers in the first quarter of 2015:
•
Alaska Air Group, Inc.
•
Allegiant Travel Company
•
American Airlines Group, Inc.
•
Delta Airlines
•
Hawaiian Holdings Inc.
•
JetBlue Airways Corporation
•
Republic Airways Holdings Inc.
•
Sky West Inc.
•
Southwest Airlines
•
United Continental
•
Virgin America
The larger group of airlines was used for comparing the Company’s total shareholder return under our performance share units, because the Company believes it competes with all other public airline companies for equity investors. With respect to the 2016 compensation market assessment and 2016 award of performance share units, the Compensation Committee considered and approved Willis Towers Watson's recommendation to add WestJet Airlines to the Compensation Peer Group and made no changes to the Performance Share Peer Group used in 2015. On February 25, 2016, a few days after the 2016 equity awards were made (as described below), Republic Airways Holdings, Inc. filed for bankruptcy and per the terms and conditions of the applicable performance share units award agreements, that company will remain in the Performance Share Peer group(s) for any and all outstanding awards of performance share units and will be assigned a TSR of -100%. On March 14, 2016, the Compensation Committee, upon recommendation of Willis Towers Watson, removed Republic Airways Holdings, Inc. from the Performance Share Peer Group for purposes of all performance share units awarded after March 14, 2016.
Determination of Compensation
The Compensation Committee meets periodically to specifically review and determine adjustments, if any, to the CEO’s compensation, including his base salary, annual bonus compensation and long-term equity awards, and to review and consider recommendations of the CEO with respect to the other NEOs’ base salaries, annual bonus compensation and long-term equity awards. For 2015 , the Compensation Committee determined each individual component of compensation for our NEOs. Decisions of our Compensation Committee pertaining to the compensation of our NEOs and the Company’s executive compensation programs are regularly reported to, and in many instances concurred by, the full Board. The Compensation Committee annually evaluates our company-wide performance against the approved operating plan for the prior fiscal year. The Compensation Committee also meets periodically to discuss compensation-related matters as they arise during the year. For each year, our CEO evaluates each other NEO’s individual performance and contributions to the Company’s success and reports to the Compensation Committee his recommendations regarding each element of the other NEOs’ compensation. The CEO does not participate in any formal discussion with the Compensation Committee regarding decisions on his own compensation, and he recuses himself from meetings when his individual performance is evaluated and his compensation is discussed and decided.
In July 2011, the Compensation Committee engaged Willis Towers Watson as an independent compensation advisor to assist the Compensation Committee with our executive compensation program design. Since that time, Willis Towers Watson has worked closely with the Compensation Committee to determine an appropriate executive compensation strategy that supports our core business objectives: maintaining low costs, profitable growth, safe and reliable operations and sound cash flow. In considering approaches to executive compensation, the Compensation Committee continuously reviews ways to strengthen the alignment of management’s interests with the interests of shareholders, strengthen our ability to attract, motivate and retain key executive talent and design plans that account for the relatively high volatility of our industry.
In order to assist the Compensation Committee in setting appropriate compensation metrics and target amounts, in October 2015, Willis Towers Watson provided an updated competitive assessment of our 2015 executive compensation levels. After consideration, and based on recommendations from Willis Towers Watson, the Compensation Committee approved the following public companies as an appropriate talent-competitor peer group for compensation market comparison purposes for 2015 (the "Compensation Peer Group"):
•
Alaska Air Group, Inc.
•
Allegiant Travel Company
•
Hawaiian Holdings Inc.
•
JetBlue Airways Corporation
•
Republic Airways Holdings Inc.
•
Sky West Inc.
•
Virgin America
The Compensation Peer Group was the same peer group used in 2014 with the addition of Virgin America. The selection of companies for the Compensation Peer Group focused on small to medium-sized passenger carriers as an appropriate population for assessing the amounts and percentile rankings of compensation elements for NEOs, including base salaries, short-term incentives (bonuses) and long-term equity-based incentives. Due to its initial public offering based equity grants, Virgin America's long-term incentives data was not included in the 2015 benchmarking analysis. Data for Allegiant Travel Company's CEO (who is also a large shareholder of such company) was also excluded due to particularities of that executive's pay package. The Compensation Committee determined that the Company's competition for executive talent came significantly from the foregoing listed carriers. Willis Towers Watson primarily used the Compensation Peer Group to assess the competitiveness of our Chief Executive Officer’s, Chief Operating Officer’s, and Network and Revenue Management Senior Vice President's compensation, as these positions would normally be recruited from other passenger airlines.
In assessing the compensation of our Chief Financial Officer and General Counsel, Willis Towers Watson used a blended approach consisting of both Compensation Peer Group proxy data and broader industries survey data, adjusted for revenue size, as these positions could also generally be recruited from companies in other industries. For its October 2015 analysis, the survey data were taken from the following three executive pay surveys:
29
Table of Contents
•
Seabury 2015 Airline Industry Compensation Survey Analysis;
•
Towers Watson 2015 Compensation Data Bank (CDB) General Industry Executive Compensation Survey Report; and
•
William M. Mercer 2015 Executive Compensation Survey.
The data from the two general industry executive surveys were reduced in scope to focus on companies with revenues approximating the Company’s last twelve months of revenues of approximately $2 billion as of June 30, 2015. The Compensation Committee was not aware of the individual participating companies in the surveys and reviewed the data in a summarized fashion.
At the same time, the Compensation Committee also approved the following larger group of publicly traded airline companies (the "Performance Share Peer Group") as an appropriate investor-capital peer group for measuring total shareholder return under the performance share units awarded to our executive officers in the first quarter of 2015:
•
Alaska Air Group, Inc.
•
Allegiant Travel Company
•
American Airlines Group, Inc.
•
Delta Airlines
•
Hawaiian Holdings Inc.
•
JetBlue Airways Corporation
•
Republic Airways Holdings Inc.
•
Sky West Inc.
•
Southwest Airlines
•
United Continental
•
Virgin America
The larger group of airlines was used for comparing the Company’s total shareholder return under our performance share units, because the Company believes it competes with all other public airline companies for equity investors. With respect to the 2016 compensation market assessment and 2016 award of performance share units, the Compensation Committee considered and approved Willis Towers Watson's recommendation to add WestJet Airlines to the Compensation Peer Group and made no changes to the Performance Share Peer Group used in 2015. On February 25, 2016, a few days after the 2016 equity awards were made (as described below), Republic Airways Holdings, Inc. filed for bankruptcy and per the terms and conditions of the applicable performance share units award agreements, that company will remain in the Performance Share Peer group(s) for any and all outstanding awards of performance share units and will be assigned a TSR of -100%. On March 14, 2016, the Compensation Committee, upon recommendation of Willis Towers Watson, removed Republic Airways Holdings, Inc. from the Performance Share Peer Group for purposes of all performance share units awarded after March 14, 2016.
04-26-2016, 01:26 PM
#5608
Gets Weekends Off
Joined APC: Dec 2015
Posts: 513
I don't give a rats **** if I'm late every single leg. There is so much open time, pairings with numerous deadheads, so many inefficiencies
I can't wait for the meltdown this summer.
They can kiss my ass if they think I'm picking up the phone when some Spanglish speaking Scheduler calls me for a JRM and asks me how soon I can get to the airport
I can't wait for the meltdown this summer.
They can kiss my ass if they think I'm picking up the phone when some Spanglish speaking Scheduler calls me for a JRM and asks me how soon I can get to the airport
04-26-2016, 02:44 PM
#5609
Banned
Joined APC: Sep 2014
Position: A320 Captain
Posts: 177
I guess I could have saved this pilot group a good 2 years, so how about that new NC? Anyone ready to finally get a NC in there that will stop being "buddies" with "john" as they are proud to call Bendo?
04-26-2016, 02:47 PM
#5610
Line Holder
Joined APC: Oct 2015
Posts: 61
Originally Posted by VegassBus
I don't give a rats **** if I'm late every single leg. There is so much open time, pairings with numerous deadheads, so many inefficiencies
I can't wait for the meltdown this summer.
They can kiss my ass if they think I'm picking up the phone when some Spanglish speaking Scheduler calls me for a JRM and asks me how soon I can get to the airport
I can't wait for the meltdown this summer.
They can kiss my ass if they think I'm picking up the phone when some Spanglish speaking Scheduler calls me for a JRM and asks me how soon I can get to the airport
We need to use all resources to show how ****ed off we are. Everyone I fly with is rightfully mad at management. We need a media statement expressing how the operation is wallowing and how we can help resurrect this floundering ship given the proper motivation. Burn it!
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