AMR chief executive receives $5.4 million for 2006

Reuters – Friday April 20, 7:05 pm ET

CHICAGO (Reuters) – The chief executive at AMR Corp. received $5.4 million for 2006, mostly in stock-based compensation, the parent company of American Airlines said in a government filing on Friday.

AMR also said that a stock award for Arpey that vested on Wednesday would be paid at $6.64 million as part of his 2007 compensation.

Equity compensation for Arpey and top managers at the world's largest airline has riled labor groups, which complain the payouts are exorbitant given the wage and benefit concessions employees have made for the sake of the airline.

The airline's workers have given up $1.8 billion a year in wages, benefits and work rule changes.

"It's not so much the fact that management is receiving bonuses as the highly disparate rate of recovery in compensation since the 2003 restructuring," said Gregg Overman, a spokesman for the Allied Pilots Association (APA).

AMR managers made concessions alongside the workers. But a recent industry recovery has helped trigger lucrative stock options and multimillion-dollar paydays for some airline executives.

AMR says the payout on stock awards depends on whether the airline meets certain performance criteria. It is standard practice, the airline says, for a portion of executive compensation to be put at risk.

The APA on Friday proposed a resolution for consideration at AMR's forthcoming shareholder meeting that would allow stockholders to approve or disapprove of executive compensation on an annual basis.

Arpey, who received no such award in 2005, took a stock award worth $130,000 in 2004 and $151,000 in 2003.

Shares of AMR fell 3.5 percent to $29, down from a high of $41 on January 17.