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(Time)   CEO: I would like to merge my airline with another airline to make the largest airline in the world. Judge: ok. CEO: I would also like $20 million. Judge: I don't think that's really in the spirit of bankruptcy   (business.time.com) divider line 26
    More: Followup, largest airlines, CEO, AMR Corp., Chapter 11, Title 11, United States Code, US Airways  
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2995 clicks; posted to Business » on 28 Mar 2013 at 1:51 PM (1 year ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-03-28 01:28:33 PM
i716.photobucket.com
 
2013-03-28 01:40:34 PM
A lifetime of free first-class flights for him and his wife? Depending on how often they choose to fly, that could be another $20 million in benefits right there. Especially if those tickets are good for alliance partners as well.
 
2013-03-28 02:10:51 PM
But the judge declined to sign off on a proposed $20 million severance package for Tom Horton

Judge is more of a Krispy Kreme guy.
 
hej
2013-03-28 02:15:15 PM
I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.
 
2013-03-28 02:20:51 PM

whistleridge: A lifetime of free first-class flights for him and his wife? Depending on how often they choose to fly, that could be another $20 million in benefits right there. Especially if those tickets are good for alliance partners as well.


I would take that alone! First class, anywhere you wanted to fly, whenever you wanted to go? That would be amazing.

Hell, make it coach if you want but pay for my Amex platinum so I can at least hang in the club.
 
2013-03-28 02:30:02 PM
Too big to fail fall outa the sky hopefully
 
2013-03-28 02:31:24 PM

hej: I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.


He took over after the bankruptcy was filed. Gerard Arpey was in charge right up until they filed, then left when they filed.
So, on the one hand, Horton knew he'd be leading the company through a Ch 11, on the other, there was probably some agreement to pay him a decent amount of money to do so.

I think the guy does deserve to get paid, the Ch 11 has gone pretty smoothly, all things considered. They've kept flying, posted a profit in at least one quarter, and negotiated a decent merger where hopefully things will be more AA and less US when all is said and done, though I imagine the labor issues are going to be fun to watch...US currently has East and West groups from their last merger (US and America West), it may be there will be a East, West, and South because the unions won't agree on a seniority list.
 
2013-03-28 02:41:51 PM

buzzcut73: hej: I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.

He took over after the bankruptcy was filed. Gerard Arpey was in charge right up until they filed, then left when they filed.
So, on the one hand, Horton knew he'd be leading the company through a Ch 11, on the other, there was probably some agreement to pay him a decent amount of money to do so.

I think the guy does deserve to get paid, the Ch 11 has gone pretty smoothly, all things considered. They've kept flying, posted a profit in at least one quarter, and negotiated a decent merger where hopefully things will be more AA and less US when all is said and done, though I imagine the labor issues are going to be fun to watch...US currently has East and West groups from their last merger (US and America West), it may be there will be a East, West, and South because the unions won't agree on a seniority list.


He's just one employee out of thousands.  If all the employees got three to five years of salary at severance it would make sense.  He only gets it because all the other CEOs get it because way back when a single CEO got it and now they all have to have it.

It's utter bullshiat.
 
kab
2013-03-28 03:05:17 PM
"Approving it today is just not appropriate," Lane said

Yes, maybe they should wait a month or 2.  After all, people get paid exactly what they're worth, right?
 
2013-03-28 03:11:52 PM
I like to play a little game.

When I hear bad news about a company that causes its stock price to tumble, but I suspect the company will survive the ordeal, I pretend "buy" $1000 worth of their stock.   Last November, I "bought" 2778 shares of AAMRQ at $0.36 per share.  Today their stock is up to $4.14 (when I last checked).  That makes my virtual nest egg worth $11,500.  Fun game.

/wishes he actually did make that investment.
//is too chicken to actually risk the dough.
 
2013-03-28 03:28:44 PM

buzzcut73: He took over after the bankruptcy was filed.


So you're saying "he bought his ticket; he knew what he was getting into"?

// $20M = $50k for 400 employees
// just so we know how many average workers it would take to do the CEOs job
// you honestly think 400 people couldn't be CEOs-by-committee (or an anarcho-syndicalist business, where they take it in turns to act as executive for the week...) and do at least as good a job as the current CEO?
// if nothing else, they could each slack a bunch and be 100x more productive
 
2013-03-28 03:52:37 PM

Dr Dreidel: // you honestly think 400 people couldn't be CEOs-by-committee (or an anarcho-syndicalist business, where they take it in turns to act as executive for the week...) and do at least as good a job as the current CEO?


I believe the phrase you're looking for is "Too many chiefs and not enough Indians"
 
2013-03-28 04:13:39 PM

AdolfClamwacker: I believe the phrase you're looking for is "Too many chiefs and not enough Indians"


All 400 at once would likely get clusterfarky, sure - we keep just over that number in a room in DC, and they can barely agree on what color the sky is.

However, it might be slightly easier to imagine a scenario where 400 people could serve in the various capacities a CEO has - a glad-hander (no, not THAT kind), a numbers guy, a master stock predictor, a marketing guy, a data guy...

I know that this is supposedly how boards work (CEO/COO/CFO/CIO), but when each member earns 300-400 times what the mid-level people do, it's very easy to spot the inefficiencies.
 
2013-03-28 04:30:35 PM

whistleridge: A lifetime of free first-class flights for him and his wife? Depending on how often they choose to fly, that could be another $20 million in benefits right there. Especially if those tickets are good for alliance partners as well.


He already got free flights for life by having 10 years with AA and 1st class due to his level.

However, AA revoked the flight privileges of Don Carty when he became chairman of Virgin America.

Horton may be planning on working for a competitor.
 
2013-03-28 04:32:29 PM

buzzcut73: hej: I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.

He took over after the bankruptcy was filed. Gerard Arpey was in charge right up until they filed, then left when they filed.
So, on the one hand, Horton knew he'd be leading the company through a Ch 11, on the other, there was probably some agreement to pay him a decent amount of money to do so.

I think the guy does deserve to get paid, the Ch 11 has gone pretty smoothly, all things considered. They've kept flying, posted a profit in at least one quarter, and negotiated a decent merger where hopefully things will be more AA and less US when all is said and done, though I imagine the labor issues are going to be fun to watch...US currently has East and West groups from their last merger (US and America West), it may be there will be a East, West, and South because the unions won't agree on a seniority list.


Union agreements have been in place since last August.
 
2013-03-28 05:39:07 PM

RatOmeter: I like to play a little game.

When I hear bad news about a company that causes its stock price to tumble, but I suspect the company will survive the ordeal, I pretend "buy" $1000 worth of their stock.   Last November, I "bought" 2778 shares of AAMRQ at $0.36 per share.  Today their stock is up to $4.14 (when I last checked).  That makes my virtual nest egg worth $11,500.  Fun game.

/wishes he actually did make that investment.
//is too chicken to actually risk the dough.


If you've done your research on the stock, do it!

I did that exact thing, even my worst performer managed to double my money.  Now semi-retired.
 
2013-03-28 05:58:16 PM
didn't read the article but is it options or a lump sum payment? If it's just a cash payout, that seems like an absurd amount of money and I can't imagine a scenario where this guy would deserve more than $1M. If it's stock options, I could see making it a shiatload of options based on how much airline stocks rise and fall and wanting to ensure that the merger goes through as smooth as possible and that is does actually benefit both airlines and thus his stock when it's redeemable in say 5 years (still seems like a lot even for that though).
 
2013-03-28 06:16:37 PM

hej: I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.


None. Ever since deregulation the passenger airline industry has relied solely on bankruptcy to stay in business. Once one company jettisons their debt it gives them a competitive pricing advantage. This forces the others to do the same or get undercut all the time.

The airline industry is not generally solvent and will not be solvent so long as flights remain so inexpensive. What I haven't figured out is why people keep lending them money after yet another bankruptcy.
 
2013-03-28 07:22:49 PM

H31N0US: whistleridge: A lifetime of free first-class flights for him and his wife? Depending on how often they choose to fly, that could be another $20 million in benefits right there. Especially if those tickets are good for alliance partners as well.

I would take that alone! First class, anywhere you wanted to fly, whenever you wanted to go? That would be amazing.


I'd live in the plane, it would be my home.

I guess you'd have to leave your home when it arrives at airports, but only to walk to the next one, as you'd sheduled your trips to have as little downtime as possible.
 
2013-03-28 07:48:12 PM

RatOmeter: I like to play a little game.

When I hear bad news about a company that causes its stock price to tumble, but I suspect the company will survive the ordeal, I pretend "buy" $1000 worth of their stock.   Last November, I "bought" 2778 shares of AAMRQ at $0.36 per share.  Today their stock is up to $4.14 (when I last checked).  That makes my virtual nest egg worth $11,500.  Fun game.

/wishes he actually did make that investment.
//is too chicken to actually risk the dough.


Usually existing stockholers are completely wiped out.  The only reason it went from under $1.00 to $4.00 is the possibility that existing stockholders may receive 3.5% of the new company.
 
2013-03-28 07:56:45 PM

BolloxReader: hej: I wonder how much money he would have expected if he hadn't lead American Airlines to bankruptcy.

None. Ever since deregulation the passenger airline industry has relied solely on bankruptcy to stay in business. Once one company jettisons their debt it gives them a competitive pricing advantage. This forces the others to do the same or get undercut all the time.

The airline industry is not generally solvent and will not be solvent so long as flights remain so inexpensive. What I haven't figured out is why people keep lending them money after yet another bankruptcy.


Southwest laughs at your generalities.
 
2013-03-28 08:48:00 PM
mcreadyblue:
Union agreements have been in place since last August.

MOU =/= Contract

Parker could promise whatever he wanted to the AA unions, but it doesn't mean squat when it actually comes time to merge the unions.
 
2013-03-28 10:10:54 PM

whistleridge: A lifetime of free first-class flights for him and his wife? Depending on how often they choose to fly, that could be another $20 million in benefits right there. Especially if those tickets are good for alliance partners as well.


I have a friend who received lifetime tickets-for-two as part of a severance package when she was laid off by an airline.

Sweet deal.
 
2013-03-28 10:35:32 PM
As an AA employee, I'd like to remind everyone that employees fly STANDBY and with flights as full as they are now days it isn't as good a deal as you think. I mean yeah, I'm going to dc tomorrow, LA next week and Madrid at the end of april but...it isn't all butterflies and rainbows.
 
2013-03-28 11:24:36 PM

GBmanNC: As an AA employee, I'd like to remind everyone that employees fly STANDBY and with flights as full as they are now days it isn't as good a deal as you think. I mean yeah, I'm going to dc tomorrow, LA next week and Madrid at the end of april but...it isn't all butterflies and rainbows.


Heh. I remember sitting in the gate area waiting for a DFW-LAX flight on AA. Due to an earlier 738 cancellation, I was rebooked on a 757 flight a couple of hours later...that flight was still going to make the connection for the LAX-KOA flight, but just barely.
Anyhow, there was a gaggle of FA's in the same area, and they were all HIGHLY pissed off that they were not going to be able to non-rev on that flight because of the earlier cancellation, all whining about ruined plans, etc. It was almost like they were pissed that paying customers were going to make their destination and keep the customers happy (and thus more likely to fly AA in the future) because that meant it would be a bit tougher to get on a DFW-LAX flight later in the day.

That group may have been the exception, but it left an impression on both me and my daughter (who got to go to Hawaii as planned and not sit in Dallas for who knows how long because a couple of flight attendants on standby got bumped)
 
2013-04-01 12:44:09 PM

GBmanNC: As an AA employee, I'd like to remind everyone that employees fly STANDBY and with flights as full as they are now days it isn't as good a deal as you think. I mean yeah, I'm going to dc tomorrow, LA next week and Madrid at the end of april but...it isn't all butterflies and rainbows.


yeah.  flying non-rev as the lowest priority these days has pretty much reached the point where it's better to buy a ticket.  it might even be cheaper considering the fact you won't be stuck overnight on unwanted lay-overs, have to fly to the wrong place and get ground transportation, etc.

/ child of retired aa pilot
// also subby, sorry for being trolly in the headline, i work in chapter 11s and i know how hard it is to put together a chapter 11 plan, especially for something this big.  a guest CEO stepping in to reorganize under these conditions is doing stuff that's a lot harder than a normal business will face.  20 million might be a lot, but if the plan gets approved, and the creditors get paid, and the shareholders actually get something, which is inconceivable, they are at the absolute bottom of the list... well, there aren't a lot of people who could write a plan that pays shareholders.  they are often the biggest losers in bankruptcy (and should be, considering the purposes of apportioning the risks of doing business with a corporate model)
 
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