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(Chicago Trib)   American Airlines ordered to justify the $20 million severance given to their CEO. "Because he asked for it" apparently wasn't a good enough explanation   (chicagotribune.com) divider line 216
    More: Followup, American Airlines, executive directors, Americans, AMR Corp., unsecured creditors, United States bankruptcy court, US Airways Group, explanations  
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14411 clicks; posted to Business » on 18 Mar 2013 at 11:44 AM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-18 12:33:59 PM

HotWingConspiracy: It added that the payments would "motivate a strong management team during the integration process" to make the merger a success.

These same people will tell you that increasing pay for the rank and file will make them lazy.


The only possible response a rational person could provide to someone saying what you have quoted with a straight face would be a swift kick in the nuts. Once the response has been provided you let them roll around on the floor for a while and consider where that interaction may have gone wrong.

I am totally not kidding about that, either.
 
2013-03-18 12:34:40 PM
'Merican Airlines
 
2013-03-18 12:36:03 PM

CeroX: Here's an idea:

20 Million golden parachute

Divided by:

Non-management employees 79,444

=

251.74 bonus check to all the employees... is it much? not really. Did they earn it? you bet...


Another interesting way to look at it, is that 80,000 people did $250 worth of work just to  pay one guy for losing his job.
 
2013-03-18 12:36:23 PM

HotWingConspiracy: It added that the payments would "motivate a strong management team during the integration process" to make the merger a success.

These same people will tell you that increasing pay for the rank and file will make them lazy.


So much this!
 
2013-03-18 12:37:15 PM
Hmmm, it would create the world's largest air carrier and the world's largest suck.
 
2013-03-18 12:38:30 PM
How much did they spend on a "pay consultant"?

"We wanna cut this guy loose, how much should we pay him?"
"Iunno. Hey, Bob, how much did we say the CEO of Home Depot was worth a few years back? 250M? Hmmm. He took some shiat for that, and the economy'shiat the skids since then. How about $20M?"
"Cool. Let's go to Hooters for lunch; send the e-mail from the table and the client pays."

// really, how much grunt work does it take?
// far more than it should, evidently
// and those "consultants" didn't think about shareholders?
// that's probably a million or few wasted that NO ONE will recover
 
2013-03-18 12:39:43 PM

Harbinger of the Doomed Rat: tenpoundsofcheese: "because he negotiated it as part of his compensation and the board agreed with it after consulting with third party pay consultants" is a good answer.

Oh look, someone doesn't understand how bankruptcy works.  Though, I can't say that I'm particularly surprised that you're once again proudly flying your ignoramus flag.


Now I have a mental image of tendpoundsofhodor's room with a bunch of Derp State pennants on the walls.
 
2013-03-18 12:40:43 PM
I love the smell of sarcasm in the morning.
 
2013-03-18 12:41:09 PM

Linux_Yes: Duke Phillips' Singing Bears: ZAZ: Bankruptcy court is not bound by prior negotiations, contracts, solemn vows, or even the opinion of pay consultants.

Just ask AA's pilots.


i didn't know Alcoholics Anonymous had pilots.   kewl.


As a matter of fact... They do (PDF). Rather famous gentleman, in fact, particularly AFTER  his arrest and subsequent getting his shiat together.
 
2013-03-18 12:41:10 PM

Linux_Yes: Duke Phillips' Singing Bears: ZAZ: Bankruptcy court is not bound by prior negotiations, contracts, solemn vows, or even the opinion of pay consultants.

Just ask AA's pilots.


i didn't know Alcoholics Anonymous had pilots.   kewl.


Jack Daniels is my co-pilot.

 Signed,
 Capt. Morgan

// The Captain has turned off the "No Smoking" sign, light 'em if you got 'em
// Kindly refrain from using the Air Sickness Bag as a urinal
// Thank you for flying A.A. !!!
 
2013-03-18 12:45:07 PM
Meanwhile AA has given me such crappy insurance that I had to pay almost entirely out of pocket for a surgery I had recently. Not to mention spending a lot of effort to ensure my department "gets to keep our individual voice" (ie. keep the unions out). To be fair, my department VOTED to keep the union out, but there sure was an insane amount of effort by the higher ups to convince everyone to vote no that could have been devoted to say, i don't know, improving customer service maybe?
 
2013-03-18 12:47:17 PM

kab: Wow, the CEO ballwasher brigade hit this thread in record time.


If he hadn't, his supervisor would have called him in to ask why. You gotta keep on your toes when you're shilling for pay.
 
2013-03-18 12:48:18 PM
Do you know how much work it is to bring a company to bankruptcy? Why these poor CEOs have to make multiple trips in their private jets to their fabulous Bermudan villas, attend board meetings, keep up with the latest trends in biz-speak, make bad decisions that they can later blame on a VP, write occasional nonsensical memos to staff, recommend trendy business books to senior management, attend three hour lunches, and make sure their assistant answers their email. It's brutal work, but these unsung heroes do it every day.
 
2013-03-18 12:48:43 PM

Elandriel: The objection on its face has merit; they are committing 20 mil that could be disbursed to unsecured creditors, and instead giving it to some guy who basically lost his job.

completely destroyed the company because of his incompetence...
FTFM...
 
2013-03-18 12:50:39 PM

ZAZ: Bankruptcy court is not bound by prior negotiations, contracts, solemn vows, or even the opinion of pay consultants.


Bingo.

There's a reason I have tenpoundsofcheese farkied as "ten pounds of derp".  He's either a very short-bus special Farker incapable of operating outside a Fox-Limbaugh field, or performing some truly wonderful performance art.  Unfortunately Poe's Law prevents me from knowing which one, a sort of internet Heisenberg's Uncertainty effect.
 
2013-03-18 12:51:23 PM

trotsky: vudutek: 10lbofbatshiatcrazy has zero problem with folks getting screwed out of their pensions, but god forbid the 1%er take a hit to his golden parachute, because socialism!

The thing is I have seen this attitude all over. Kinda makes you sick.


Tell me about it.  When did we become a nation of jelly whiners.
 
2013-03-18 12:51:44 PM
You know he asked for 21 million but we negotiated him down. It took weeks of meetings with lawyers and accountants and fiduciary experts but we finally arrived at an amount we could all be comfortable with.

So actually, we saved the company a million dollars? Where's our big thank you from the customer? A million bucks is a lot of money. But no. All we hear is "You gave some guy 20 million to leave" and "What's this $25 feet on the carpet surcharge?"
 
2013-03-18 12:52:16 PM

CeroX: Here's an idea:

20 Million golden parachute

Divided by:

Non-management employees 79,444

=

251.74 bonus check to all the employees... is it much? not really. Did they earn it? you bet...


So you're fine with ripping off the people who are owed money, you just want to change who gets it?
 
2013-03-18 12:53:26 PM

Harbinger of the Doomed Rat: tenpoundsofcheese: "because he negotiated it as part of his compensation and the board agreed with it after consulting with third party pay consultants" is a good answer.

Oh look, someone doesn't understand how bankruptcy works.  Though, I can't say that I'm particularly surprised that you're once again proudly flying your ignoramus flag.


oh look, someone doesn't understand how labor law works under bankruptcy.
Not all contracts are treated equally
 
2013-03-18 12:55:38 PM
twimg0-a.akamaihd.net
We're scrapping the plan for the new GNB headquarters. This recession is killing us.  We're cutting anything non-essential. And I have a lot of tough choices to make at the bi-quarterly retreat in Saint Croix.
 
2013-03-18 12:56:00 PM

Elandriel: Chapter 11 nulls all existing contracts


No, that is wrong.
(I assume you mean "nullifies" instead of "nulls" since "null" is a noun, not a verb.)
 
2013-03-18 12:56:54 PM
farking parasite.
 
2013-03-18 12:57:31 PM

BMFPitt: So you're fine with ripping off the people who are owed money, you just want to change who gets it?


I just want to rip off greedy union parasites who also have legally binding contracts and are owed money.

Can you help me figure out a way to justify compensating CEOs while voiding union contracts?
 
2013-03-18 12:57:55 PM

BMFPitt: CeroX: Here's an idea:

20 Million golden parachute

Divided by:

Non-management employees 79,444

=

251.74 bonus check to all the employees... is it much? not really. Did they earn it? you bet...

So you're fine with ripping off the people who are owed money, you just want to change who gets it?


Ok smart ass...

We'll go ahead and throw the CEO a bonus

$20M golden parachute / 79,445  Still =  251.74

There ya go CEO, a company build on the backs of the employees and you "earned" your bonus... the same as everyone else...
 
2013-03-18 12:58:19 PM
Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.
 
2013-03-18 01:02:15 PM
He needs that $20 million to replace the cracked leather seats in his personal Learjet.  How is he going to fly his friends to the Superbowl when the leather seats in it are cracked?
 
2013-03-18 01:03:38 PM
CeroX:

There ya go CEO, a company build on the backs of the employees and you "earned" your bonus... the same as everyone else...

Are you saying the current employees built the company?  I didn't know the company was that new.  Looks like they didn't do a very good job at building it since it is in bankruptcy.
 
2013-03-18 01:04:04 PM

DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.


well, since it's only one company and one severance and it has never happened to any other corporation ever, and the overall budget of that company certainly is not effected in such things as support personnel or safety, and the costs associated with their product has zero effect on the pricing of their competitors, I guess we 'll just let it go.  But I'm still watching, as I have been for many, many years, just in case a major corporation makes an outrageous financial decision, even just once.
 
2013-03-18 01:06:52 PM

April Bond: He needs that $20 million to replace the cracked leather seats in his personal Learjet.  How is he going to fly his friends to the Superbowl when the leather seats in it are cracked?


At that persons level it would not be a Lear, more likely a Gulfstream, Lears are for the barely making it crowd
 
2013-03-18 01:07:09 PM

Nana's Vibrator: DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.

well, since it's only one company and one severance and it has never happened to any other corporation ever, and the overall budget of that company certainly is not effected in such things as support personnel or safety, and the costs associated with their product has zero effect on the pricing of their competitors, I guess we 'll just let it go.  But I'm still watching, as I have been for many, many years, just in case a major corporation makes an outrageous financial decision, even just once.


Well at least you're not wasting energy looking for things to be upset about instead of doing things that could put you in a situation where the actions of others have a smaller effect on your emotional well being.
 
2013-03-18 01:08:25 PM

The_Gallant_Gallstone: BMFPitt: So you're fine with ripping off the people who are owed money, you just want to change who gets it?

I just want to rip off greedy union parasites who also have legally binding contracts and are owed money.

Can you help me figure out a way to justify compensating CEOs while voiding union contracts?


Justify? No. But I'm sure you could venue shop in order to get that outcome.
 
2013-03-18 01:08:53 PM

DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.


Because it's a public company and people have 401k's and other retirement plans invested in this business.  Their success or failure is far reaching.  Some people's livelihoods depend on air travel.  City's require tourists and businessmen to be able to fly in.  Interest rates are affected.  Local vendors.  Tourist stops.

No one is forcing you to fly, that is true.  But a company that large has an affect on so many other things that may not seem related at first.  Like in those little strip mall places, you have the grocery store, then a bunch of little shops like chinese food, pizza, nail salon, dollar store.  Those little guys better worry how the grocery store operates, because they live off the coat tails of that store.  If the grocery store closes, then the little guys will lose traffic and also g out of business.  So, that is why we should give a shiat about the fiscal operation of a corporation.
 
m00
2013-03-18 01:09:19 PM

limeyfellow: Which would probably pass muster, if they didn't all sit on each others boards and act as consultants for each other over what should be their pay and suitable compensation.


This
 
2013-03-18 01:11:18 PM

CeroX: BMFPitt: CeroX: Here's an idea:

20 Million golden parachute

Divided by:

Non-management employees 79,444

=

251.74 bonus check to all the employees... is it much? not really. Did they earn it? you bet...

So you're fine with ripping off the people who are owed money, you just want to change who gets it?

Ok smart ass...

We'll go ahead and throw the CEO a bonus

$20M golden parachute / 79,445  Still =  251.74

There ya go CEO, a company build on the backs of the employees and you "earned" your bonus... the same as everyone else...


How do you believe this proposal differs from your first one? You're still stealing from the creditors and dividing it up slightly differently.
 
2013-03-18 01:12:14 PM

stonicus: DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.

Because it's a public company and people have 401k's and other retirement plans invested in this business.  Their success or failure is far reaching.  Some people's livelihoods depend on air travel.  City's require tourists and businessmen to be able to fly in.  Interest rates are affected.  Local vendors.  Tourist stops.

No one is forcing you to fly, that is true.  But a company that large has an affect on so many other things that may not seem related at first.  Like in those little strip mall places, you have the grocery store, then a bunch of little shops like chinese food, pizza, nail salon, dollar store.  Those little guys better worry how the grocery store operates, because they live off the coat tails of that store.  If the grocery store closes, then the little guys will lose traffic and also g out of business.  So, that is why we should give a shiat about the fiscal operation of a corporation.


You mean to tell me business owners actually have to work hard to beat the competition and survive in a dynamic economy and that there are a bunch of assholes out there trying to keep all the money for themselves and don't give a damn about your success or the negative macro-consequences of their actions? That's poppy-cock!
 
2013-03-18 01:12:35 PM

April Bond: He needs that $20 million to replace the cracked leather seats in his personal Learjet.  How is he going to fly his friends to the Superbowl when the leather seats in it are cracked?


See, that the problem right there.  If he had been paid a reasonable amount for the rare expertise and talent only a CEO of major companies posses, he would have had the non-cracking whale penis foreskin leather.  See what happens when you scrimp on the salary of those that are better than all others?
 
2013-03-18 01:13:58 PM
DubtodaIll:

Well at least you're not wasting energy looking for things to be upset about instead of doing things that could put you in a situation where the actions of others have a smaller effect on your emotional well being.

I'm reading this but all I'm hearing is "congratulations on never spending time in the Politics tab, good sir"
 
m00
2013-03-18 01:16:00 PM

DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.


This is a heavily, heavily regulated industry, which means the free market isn't at play. I can't go start m00 Airlines with a 707 I keep in a barn. Is this a good idea? Absolutely. But if the government prevents competition to a service that I more-or-less have no alternative to using, then it is my business how the money is spent.
 
2013-03-18 01:16:00 PM

tenpoundsofcheese: CeroX:

There ya go CEO, a company build on the backs of the employees and you "earned" your bonus... the same as everyone else...

Are you saying the current employees built the company?  I didn't know the company was that new.  Looks like they didn't do a very good job at building it since it is in bankruptcy.


Unlike the current CEO, who was there from the beginning, amirite?

/here's your sign
 
2013-03-18 01:16:30 PM

DubtodaIll: stonicus: DubtodaIll: Aside from allowing yourself to feel morally superior to someone who has been much more successful than you, what's the point of being outraged about the fiscal operations of a corporation? No one is forcing you to use the product so if you don't like the company, don't use them.  Use of technological advancements is not a right or a necessity.  If the company wants to give this guy 20 million then I don't have a problem with it.  He may have done a shiatty job as far as we know but imagine how much he'd get if he had done a better job.  If he had produced a product exactly to your liking would 20 million be justified in your eyes?  The fact of it is it doesn't need to be justified, it's their money, they can do with it as they please, and they will.

Because it's a public company and people have 401k's and other retirement plans invested in this business.  Their success or failure is far reaching.  Some people's livelihoods depend on air travel.  City's require tourists and businessmen to be able to fly in.  Interest rates are affected.  Local vendors.  Tourist stops.

No one is forcing you to fly, that is true.  But a company that large has an affect on so many other things that may not seem related at first.  Like in those little strip mall places, you have the grocery store, then a bunch of little shops like chinese food, pizza, nail salon, dollar store.  Those little guys better worry how the grocery store operates, because they live off the coat tails of that store.  If the grocery store closes, then the little guys will lose traffic and also g out of business.  So, that is why we should give a shiat about the fiscal operation of a corporation.

You mean to tell me business owners actually have to work hard to beat the competition and survive in a dynamic economy and that there are a bunch of assholes out there trying to keep all the money for themselves and don't give a damn about your success or the negative macro-consequences of their ...


Your manner of dialogue is very cumbersome and awkward.  But you asked why it's our business.  I explained why.  It's not as complicated as you are trying to make it.
 
2013-03-18 01:16:34 PM

NightOwl2255: What's wrong with you looters? Ayn Rand would be ashamed of you. He's a CEO. He's a Rock Star. By the very definition of CEO in American business he deserves every penny he can get. Who do you hanger-ons think built this nation. When Atlas asked what he should do, shrug, I said.


Actually, if you have read any of Ayn Rand's works, you would know that Objectivism does not support the irrational greed rampant in our corporate culture. But then again, if any of the nutzo libertarians out there who spout off about going Galt could actually read, they would know that it does not support their craziness either.
 
2013-03-18 01:16:46 PM

wingnut396: If he had been paid a reasonable amount for the rare expertise and talent only a CEO of major companies posses, he would have had the non-cracking whale penis foreskin leather.


In fairness, there are a lot of knockoffs on the market. To the untrained eye and touch, it's very hard to differentiate between the high quality blue whale foreskin leather, and a cheap replacement such as sloth taint leather, which South American crime orgs flooded into the marketplace during the late 90's.
 
2013-03-18 01:17:16 PM

Nana's Vibrator: DubtodaIll:

Well at least you're not wasting energy looking for things to be upset about instead of doing things that could put you in a situation where the actions of others have a smaller effect on your emotional well being.

I'm reading this but all I'm hearing is "congratulations on never spending time in the Politics tab, good sir"


I don't think I've ever posted over there, from what I've read it's all bluster an no bollocks.  It's difficult to read sophists and take them at all seriously.
 
2013-03-18 01:17:27 PM
DubtodaIll:  what's the point of being outraged about the fiscal operations of a corporation?l.

It's a public corporation. The shareholder's money is being used for the private benefit of a few board members and top executives who loot the company.

It's a bankrupt corporation. It's assets belong to the the creditors. Not the for the private benefit of a few board members and top executives who loot the company.

It's a merging corporation. By reducing the airline industry to a few very large players, it allows a near-monopoly in many markets, meaning it can extract unwarranted high fares from a captive audience.
 
2013-03-18 01:17:31 PM
He's getting $20 million because people are stupid and lazy. If you don't take money from the stupid and lazy you are UNAmerican!!
 
2013-03-18 01:19:34 PM

Ctrl-Alt-Del: tenpoundsofcheese: Elandriel: Chapter 11 nulls all existing contracts

No, that is wrong.

It's close enough to correct that you look like an ass trying to argue against it

The term executory contract assumes a specialized meaning in some areas of law. In bankruptcy law, an executory contract is a contract in which continuing obligations exist on both sides of the contract. In this context, a trustee may assume or reject any executory contract or unexpired lease subject to court approval. [1] See e.g. 11 U.S.C. § 365.


And the contract was accepted when the merger was closed.
Now they want to re-negotiate it.
 
2013-03-18 01:21:10 PM

Killer Cars: wingnut396: If he had been paid a reasonable amount for the rare expertise and talent only a CEO of major companies posses, he would have had the non-cracking whale penis foreskin leather.

In fairness, there are a lot of knockoffs on the market. To the untrained eye and touch, it's very hard to differentiate between the high quality blue whale foreskin leather, and a cheap replacement such as sloth taint leather, which South American crime orgs flooded into the marketplace during the late 90's.


There are subtle differences between the foreskin and taint grains; for a nominal fee ($1000/Hr), my firm will positively identify the source for discerning clients, test quality of the treatment, and recommend further care and maintenance action plans.
 
2013-03-18 01:21:52 PM

tenpoundsofcheese: And the contract was accepted when the merger was closed.
Now they want to re-negotiate it.


The merger is not the bankruptcy
 
2013-03-18 01:22:57 PM

The Stealth Hippopotamus: I'd have strong words with my Union Rep.

"What the eff are we paying you for? He does all his own negotiations and look what he gets!!"

- Disgruntled Union Member


The goal of a Union is to make the Union stronger, not to increase the well-being of the individual worker. The benefits a Union provides are just placates to keep the workers working and as ubiquitous as possible so that as many workers are kept on the payroll as possible and the dues keep flowing in.
 
m00
2013-03-18 01:25:17 PM

sdd2000: April Bond: He needs that $20 million to replace the cracked leather seats in his personal Learjet.  How is he going to fly his friends to the Superbowl when the leather seats in it are cracked?

At that persons level it would not be a Lear, more likely a Gulfstream, Lears are for the barely making it crowd


Wow you are right. Lear is barely an upgrade from 1st class.

Lear
www.jet-time.net

gulfstream
www.aircraftinvestmentgroup.com

Makes having a Lear as your personal jet pretty embarrassing.
 
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