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Judge denies $20M severance deal for AMR CEO
A federal bankruptcy judge has denied a proposed $20 million severance payment for the CEO of American Airlines as part of the company's merger with US Airways. The judge ruled Thursday that the proposed payment to CEO Tom Horton exceeded limits that Congress set for bankruptcy cases in 2005. The U.S. trustee's office, part of the Department of Justice, had objected to Horton's compensation. Judge Sean Lane declined to approve the payment during a hearing on March 28, but he… (www.tri-cityherald.com) Mehr...
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Not to mention that the company is in bankruptcy.
I thnk this is the way it ought to be done. Nobody deserves $20 million for slightly more than a years worth of work.
He will wind up getting it. People say that one should not be rewarded for failure. He has not failed as he has provide a good return for the stockholders he must report to. The fact that he has done it at the expense of the employess matters not. There are no employeee rights anymore.They are just there to be used. Even the Unions at some point will cower when a take it or leave it comes on the table.
Preacher, I have no insight into Horton's employment contract. Are you aware if he was hired solely to the benefit of its stockholders, or was he additionally tasked with pulling the company out of bankruptcy? My feeling is it would be foolish to bring in someone new without both. Matter of fact, foolish isn't strong enough - to me it'd be inconceivable. Any idea?
He was working for AMR. As a matter of fact, in years past, him and Parker were working together at AMR. I am not sure of all the details. He was promoted basically to SAVE THE COMPANY. It was his view before being promoted that AMR could not be turned around except with bankruptcy. He has done well for the stockholders, pretty much at the expense of the employees and they will come out of BR before the merger is official, I think.In a direct answer to your question, he was hired to protect the assetts of the stockholders and he put the company in bankruptcy to do so. Not pretty but they are still flying.
Thanks Preacher. I had discussions with Doug about his days at AMR. It's sad that history repeats itself, but bankruptcy seems to be a common occurrence with airlines. It has to be one of the most difficult industries in existence to keep in the black. Good times and tough times ahead. Thanks. ...D
Well, AMR was the only legacy that had not been there. Delta is now solid and Continenal did OK. United would have been there again had the merger not happened and personally, I think that possibility still looms again for the combined company. This one will do OK if Doug will let TH stay the course for a few to see the thing thru, and it appears he is going to. The AMR board doesn't need the BR court approval to give him the money, just approval to give it to him now. They just can't do it until after they come out of BR, but they have already voted and approved it as a board, so it is really a moot point. I think it was set before they went in.
Posturing has become a global pastime.
We had a longstanding relationship with AMR as far as training and some heavy maintenance on our 757, and when I retired in 09, myself and several other guys that got bit by the age 60 rule, were on the AMR cert and doing long reserve for fill in after then FAA changed the rule. TH had been on the job about 10 days in 2010. I made a DFW -ATL turn on a Saturday, and the following Monday, they went into BR. Basically all the long reserve went away immediatley and the mass furloughs started. I managed to stay current in most types over the the next year with 1st one and then another. My old company went under new management and they bought this CRJ and asked me back, paid on a 1099 so as not to mess up my retirement, for 3-4 trips per month and train some newbys. I'll hang around thru the end of next year and hang it up for good.
Peronally, the posturing has become more of a threat now rather than a pastime and BR has become an accepted way of doing business for a CEO. Stockholders, and consequently the CEO's they hire, don't give a care about the people. All they look at is protecting theirs. All the unions in the world can't protect the people. That said, while the $ are obscene at times, you cannot really blame the CEO's as most know it will not be a long term deal and they tyry to get all they can. They are there to maximize stockholder investment, not fatten pension and benefit plans. It's just the nature of the beast but if you are an employee, especially a long term one, it doesn't make it any easier.
At the end of the day, no matter what, I still can't accept anyone getting 20M for a year. Just can't. Obscene's a good description. I guess he's lucky it isn't my decision, hehehe, cos I'm pattin' the judge on the head tellin' him "good boy".
Now give the boy a break. He'll be at it nearly 2 years time he's done.LOL
