Re: American Airlines shielded executives pensions from bankruptcy

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SURPRISE, SURPRISE?
Bend Over Rover......
The St.Louis TWA Flight Attendants had the right Idea.


Original Message -----
From: "Roger James" <ejames@xxxxxxxxx>
To: <AIRLINE@xxxxxxxxxxxxxxxxx>
Sent: Thursday, April 17, 2003 12:04 PM
Subject: American Airlines shielded executives pensions from bankruptcy

American Airlines shielded executives pensions from bankruptcy

FORT WORTH, Texas (AP) 97 One day after American Airlines employees agreed

to annual cuts of $1.8 billion, the cooperative spirit turned acrimonious
Thursday as union leaders expressed outrage over newly disclosed perks
granted to executives. One angry union leader said if workers had known
earlier about a pension trust created last year to protect executives'
benefits in the event of a bankruptcy filing, they might have voted against

the steep concessions intended to keep the world's largest carrier out of
Chapter 11. The executive perks, which included huge bonuses for a few,
were disclosed late Tuesday in a filing with the Securities and Exchange
Commission. The filing was made after the scheduled end of voting on the
concessions.  "We are appalled and just disgusted. It's the equivalent of
an obscene gesture from management," John Ward, president of the flight
attendants' union, said. Flight attendants initially rejected their share
of the $1.8 billion cost-cutting plan but reversed themselves Wednesday
after the company extended the original deadline. James C. Little, leader
of the ground workers' union, said he was considering whether to withhold
signing the concessions contract that his members narrowly approved. "If
members had known about these compensation agreements, there would have
been a higher turnout of 'No' votes," Little said.

According to the SEC filing, the company's board agreed to fund 60% of the

pension trust established for 45 top executives and it approved bonuses for

six top executives if they stay through January 05. The bonuses would be

double each executive's pay. American spokesman Bruce Hicks said the
benefits were designed to retain top talent and were similar to deals
offered by other major companies. "Retention benefits are designed to keep

key senior management who are constantly being wooed by other companies 97

other airlines and non-airlines," he said. Hicks said the extra pensions
were similar to a supplemental plan for American's pilots, which he said
would also be protected in bankruptcy. Ground workers and flight
attendants, who earn far less than pilots, have no such a plan, he said.
Chairman and chief executive Donald J. Carty could get a $1.6 million
bonus, based on his 02 salary of $811,000. Carty told workers last month

that he would take a 33% pay cut to demonstrate management's willingness to

make sacrifices for the company's good. Carty did not publicly discuss the

bonus he could get in 05.

Few employees learned of the executive benefits until after they had
approved concessions that call for pay cuts of about 16% for flight
attendants and ground workers and 23% for pilots. "It's pretty blatant to
us that we found out about it after they disclosed it to the SEC. ... It
was done intentionally that way to wait until after the voting process,"
said Little, the Transport Workers Union official. "This ... leaves the
issue to us whether they were actually bargaining in good faith." Hicks,
the airline spokesman, said union leaders and their consultants were
briefed about the executive benefits over the past several weeks 97 but
under a confidentiality agreement that prohibited them from informing
rank-and-file workers. Little and Ward said they were given general
information about executive compensation but denied being told about the
bonuses and pension funding.
"The only thing we were told is that (Carty) wasn't going to receive any
bonuses,"



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