AMR set trust to cushion executive pensions -WSJ

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AMR set trust to cushion executive pensions -WSJ=20


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Thursday April 17, 4:58 AM EDT=20

NEW YORK, April 17 (Reuters) - AMR Corp. (AMR), parent of American
Airlines, funded a supplemental pension trust for 45 senior executives
last year that would protect part of their retirement income in the
event of the world's largest airline going bankrupt, The Wall Street
Journal said on Thursday.
The newspaper said that according to AMR's annual financial statements
filed with the Securities & Exchange Commission earlier this week the
company funded the trust even as it engaged in intense cost-cutting to
avert bankruptcy.
A similar pension trust arrangement at Delta Air Lines (DAL), along with
other compensation disclosures this spring, drew so much fire that the
third biggest U.S. airline's Chief Executive Officer Leo Mullin gave
himself a pay cut, the Journal said.
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American Airlines defended its supplemental pension program, and noted
that its executives' primary pension program would be at risk in a
bankruptcy, just like that of its other employees, it said.
"Different pension programs are funded at different times and the
decision was made to fund this one then," a spokesman for American told
the Journal, but declined to disclose the cost associated with the
funding of the executives' pension trust.
On Wednesday American Airlines' flight attendants granted the carrier a
lifeline when they acceded -- at the last minute -- to sweeping wage
concessions totaling $1.8 billion, which the carrier says it needs to
reverse its dismal financial performance.
An American Airlines spokesman contacted by Reuters early on Thursday
was not immediately able to comment.=20

=A92003 Reuters Limited.=20

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