Monday, April 13, 2009

Bonus Season at American Airlines!

Not long ago, I wrangled a bunch of parents to volunteer for the school's annual carnival. A lot of work, but it's a volunteer position that gives me the chance to talk with people I'd otherwise never get to meet.

One of the moms who helped out is a flight attendant at American Airlines. During some down time at the carnival, she shared her frustration about the great divide between executive compensation and the pay scale for the rest of the people who work for American.

She had no problem with executives earning significantly more than other employees - her problem was that the executives who negotiated hard for union concessions in a number of areas - including compensation - then turned around and paid themselves an enormous bonus.

The flight attendant was outraged that leaders who asked for shared sacrifice apparently felt entitled to remove themselves from the opportunity to sacrifice with the rest of the company. According to this story in the Washington Post, bonus payouts to American Airline execs have totaled more than $300 million in recent years.

You know it's a bad corporate environment when bile about such things spills out during the school carnival.

So it's kind of funny that one of the ads you can download on the American Airlines site is called "Team Building," in which a middle-aged man engaged in "team building activities" with co-workers is looking desperately to escape the torture. And he looks to American Airlines as the vehicle for "Making his escape. Sooner."

At least the ad agency for American understands how it feels to feel trapped by one's work environment. And someone in the marketing department at American has a wicked sense of humor, given the swirl of negativity surrounding the company's employee-management relations these days.

Spring's here - and it's bonus time again for the execs at American. Though the amount of the bonuses to be shared by the executives has not been announced yet, the employees have launched a preemptive attack in a variety of media. (I came across this ad in the Chicago Sun-Times.)

Click on it and you're taken to a "contest" where you get to match up four CEOs (Steve Jobs of Apple, Eric Schmidt of Google, Gary Kelly of Southwest Airlines and Gerard Arpey, American's CEO) with their annual salaries.

Guess who gets paid more than the three other execs combined?

If you guessed Gerard Arpey of American Airlines, you guessed right. His salary is more than $4 million a year.

The ad, paid for by the Transport Workers Union, asks you to sign a petition telling the board to forgo bonuses for AA executives this year.

If you've flown American Airlines lately, you've most likely had a challenging experience. According to an April 6, 2009 report in the Austin Business Journal, American Airlines flights had the worst on-time performance in the industry in 2008.

According to the company's 2008 10K, "the Company recorded a net loss of $2.1 billion in 2008 compared to net earnings of $504 million in 2007."

So if executive bonuses were at all related to company performance, the discussion of bonuses would perhaps be tabled for the year. Not at American Airlines, apparently.

Should executives at companies that lose billions of dollars get bonuses? That's the question we're all being asked to consider these days....

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