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AAs’ unions time protests to management bonuses – 4.18.07

American Airlines' unions time protests to management bonuses

07:31 PM CDT on Wednesday, April 18, 2007
By DAVID KOENIG
The Associated Press

DALLAS — Leaning on crutches, Kelli Hughes, a Boeing 737 captain for
American Airlines, said she was so angry over bonuses for company executives
that a broken heel wasn't going to stop her from marching in a union
protest.

"They said this was going to be 'shared sacrifice, shared gain,' but it's
not happening," Hughes said. "We're the only company that's not giving back
to the employees."

Hughes and several hundred other American employees protested Wednesday
against the company's payment of stock to nearly 900 managers. The unions
estimate the payments, based on Wednesday's closing price of shares in
parent AMR Corp., were worth $170 million.

Wednesday's rally outside AMR headquarters was the latest in a series of
events organized by unions to pressure the company for better pay — contract
negotiations with pilots started recently, and talks with ground workers and
flight attendants are expected to begin by early next year.

On Tuesday, flight attendants carried picket signs at airports around the
country — the union says 4,000 workers took part. And the Transport Workers
Union, which represents mechanics and baggage handlers, is making AMR the
rationale for Congress to pass legislation letting shareholders vote on
executive compensation.

The bonuses are a reward for the 133 percent increase in AMR's stock price
from 2004 through 2006. Chairman and Chief Executive Gerard Arpey will get
about $7.5 million, according to union calculations. The company declined to
provide figures, saying it would disclose details in a regulatory filing
this week.

Arpey defended the payments, saying managers had received less compensation
in years when AMR's stock did poorly.

Arpey said a rising stock price helps all employees by making it possible
for the company to contribute to its pension plans, provide retiree health
benefits and avoid layoffs.

For the first time in years, AMR is setting aside money for profit sharing —
the company pays out 15 percent of American's pretax profit above $500
million. But employees point out that Continental Airlines Inc. paid
employees $111 million in profit sharing in February.

Arpey also said that American's union workers are sharing in AMR's gains
because they got 38 million stock options in 2003.

Those stock options — designed to help soften the blow of pay cuts ranging
from 15 percent to 23 percent — are now worth $1 billion, if employees
didn't sell them too soon, company officials say.

Ralph Hunter, president of the pilots' union, said many of his members had
to sell their stock to meet living expenses. Management's bonus program,
based on revolving three-year cycles, "is the gift that keeps on giving," he
said.

American's three unions are gearing up for negotiations on new contracts to
replace the concessionary deals signed in 2003, and they hope to parlay
anger over management bonuses into a better deal for their members.

James C. Little, international president of the Transport Workers Union and
before that a longtime TWU leader at American, said Arpey "probably earns
every penny he gets. A lot of CEOs make more money than he does."

But Little said managers shouldn't get bonuses before rank-and-file workers
do.

"I see this as an issue beyond American Airlines alone," he said. "It goes
to executive compensation in general. The gap (between executives and
workers) is getting wider and wider."

Some workers use stronger terms to describe their anger at management over
the bonuses, which caused a ruckus last year but involve much bigger payouts
this year.

"I can't believe how arrogant they are about this," said Dallas-based pilot
Rusty Brown. "They think it's going to blow over, but it's not."

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