Skip to content

5 execs split $20 million, American says – 4.21.07

Posted on Sat, Apr. 21, 2007

5 execs split $20 million, American says

By TREBOR BANSTETTER

STAR-TELEGRAM STAFF WRITER

 
American Airlines' top five executives split about $20 million in compensation last year as the airline posted its first annual profit since 2000.

Gerard Arpey, chief executive of Fort Worth-based AMR Corp., American's parent, received a pay package valued at about $5.4 million, according to a financial report the company filed with the Securities and Exchange Commission on Friday. The bulk of Arpey's compensation came in the form of stock and option awards granted last July, which were valued at about $4.8 million when they were issued.

Arpey also received a base salary of about $580,000 and various other compensation worth about $40,000. He did not receive a cash bonus during the year.

The disclosure came at the end of a week that saw several protests against a separate American bonus plan that paid out about $160 million in company stock to 874 executives and top managers. Employees and union officials have criticized the plan, particularly because workers saw substantial cuts in pay and benefits in 2003, when they approved a slate of 

concessions that kept the airline out of bankruptcy.

On April 18, Arpey received about $6.6 million worth of AMR stock under that plan, according to the SEC report. That payout is in addition to his 2006 compensation.

Officials with the Allied Pilots Association, American's pilots union, said Friday that they would sponsor a shareholder resolution that would give investors the ability to voice approval or disapproval with the airline's executive pay packages.

The so-called "Say on Pay" proposal wouldn't require the company to make changes but could spur additional consideration of executive pay levels, union leaders said.

"Shareholders need to be included in the debate," said Ralph Hunter, the union's president, who pointed out that many of the airline's employees are shareholders thanks to stock options awarded in 2003. "This is not intended to be disruptive in any way; it's really a way to generate a dialogue."

Despite being the company's top executive, Arpey's package wasn't the most lucrative of 2006. Tom Horton, American's chief financial officer, received compensation worth nearly $9 million, also mostly in the form of stock and option grants, which were valued at about $7.5 million.

Horton left his job as American's chief financial officer in 2002 for a job at AT&T. He returned to the airline last year as executive vice president overseeing finance and planning. Most of his compensation package for the year was in the form of grants, designed to lure him back to the airline, that are tied to future performance.

American has had difficulty keeping top financial executives in recent years and has lost several to higher-paying jobs in other industries.

To calculate the value of the executives' compensation, the Star-Telegram included the salary, bonus, incentives and the estimated value of stock options and awards granted during the year. The calculations are similar to those used by several other news organizations, including The Associated Press.

They are different from the totals listed in the report's summary compensation tables. Those tables, for example, list Arpey's total compensation as $10.2 million. That figure, however, reflects the accounting charge the company recorded on stock awards during the year rather than new compensation that was granted to the executives.

It is difficult to compare American's 2006 executive-compensation plans with the previous year because of changes to reporting requirements. In 2005, Arpey received a base salary of $526,620 and did not receive a cash bonus.

In the report, the airline's compensation committee said it looked at a variety of issues when determining pay levels, including the $231 million profit the company earned last year, the 358 percent increase in the company's stock since 2002, a reduction in the carrier's debt and an increase in its revenues last year.

AMR stock (ticker: AMR) closed at $29 per share Friday, down $1.06, or 3.5 percent.

Trebor Banstetter, 817-390-7064 [email protected]

 

APFA Headquarters
1004 West Euless Boulevard
Euless, Texas 76040

M-F: 9:00AM - 5:00PM (CT)
Phone: (817) 540-0108

Call APFA

Contract & Scheduling Desk
M-F: 7:00AM - 7:00PM (CT)
Phone: (817) 540-0108

Chat APFA

After-Hours Live Chat
M-F: 3:00PM - 11:00 PM (CT)
Sat-Sun: 9:00AM - 5:00PM (CT)

APFA Events

Currently, no scheduled events...

APFA Headquarters
1004 West Euless Boulevard
Euless, Texas 76040

M-F: 9:00AM - 5:00PM (CT)
Phone: (817) 540-0108

Call APFA

Contract & Scheduling Desk
M-F: 7:00AM - 7:00PM (CT)
Phone: (817) 540-0108

Chat APFA

After-Hours Live Chat
M-F: 3:00PM - 11:00 PM (CT)
Sat-Sun: 9:00AM - 5:00PM (CT)

APFA Events

Currently, no scheduled events...

APFA Headquarters
1004 West Euless Boulevard
Euless, Texas 76040

M-F: 9:00AM - 5:00PM (CT)
Phone: (817) 540-0108

Call APFA

Contract & Scheduling Desk
M-F: 7:00AM - 7:00PM (CT)
Phone: (817) 540-0108

Chat APFA

After-Hours Live Chat
M-F: 3:00PM - 11:00 PM (CT)
Sat-Sun: 9:00AM - 5:00PM (CT)

APFA Events

Currently, no scheduled events...

Scroll To Top