The Canadian Press - ONLINE EDITION

CEO of new American Airlines to get $700,000 salary; could get much more in stock awards

  • Print

DALLAS - The CEO of the new American Airlines says he will get a salary of $700,000 this year and could get a bonus of twice that if the company is highly profitable.

But Doug Parker says the majority of his compensation will come in the form of a stock award that hasn't been determined yet.

Based on past compensation for Parker and other airline CEOs, those stock awards are likely to be valued at several million dollars. Separately, last month Parker received a retention bonus of stock that, at Monday's closing share price, could be worth $18.9 million if certain merger goals are met by late 2016.

Parker told employees Monday that his 2014 compensation would be less than that paid to CEOs at United Airlines and Delta Air Lines, which are roughly the same size as American after its merger with US Airways. He said that he requested the lower payout because union employees at the company are paid less than their counterparts at those airlines.

The board of American Airlines Group Inc. considered Parker's salary and bonuses at its first meeting last week, he said. Parker was the CEO at US Airway — with a $550,000 salary — and took on the same job at the combined company when the merger closed in December.

In a special memo to employees on Monday, Parker said his target total compensation would be about 20 per cent below that of the United and Delta CEOs and more than 90 per cent of it would be based on performance, "meaning that if American doesn't do well, it could be worth nothing."

Parker's compensation will include the base salary plus short-term and long-term incentive payouts.

The short-term bonus for 2014 has a target of twice his base salary, which he'll get if American earns $2.5 billion in pretax profit. That would be a company record, Parker said. The board will decide the amount and measurements for the long-term stock compensation later this year, he said.

While the stock payout "is not yet finalized, it will comprise the majority of my total compensation and will only hold value if American is successful," Parker said.

In 2012, the last year for which figures are available, Parker got compensation from US Airways valued at $5.5 million, most of it in stock options and grants. That same year, United CEO Jeff Smisek received compensation valued at $9.6 million and Delta CEO Richard Anderson got payouts valued at $12.6 million — in both cases, mostly in stock-based awards.

The American Airlines board also decided to pay former American CEO Tom Horton a $400,000 "stipend" for serving as chairman of the new company, it said in a regulatory filing. Horton, who led a successful bankruptcy restructuring of the airline, will step down this spring and get a severance payment of about $17 million in cash and stock, according to a previous filing.

___

Follow David Koenig at http://www.twitter.com/airlinewriter

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories?
Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.

letters

Make text: Larger | Smaller

LATEST VIDEO

Family of Matias De Antonio speaks outside Law Courts

View more like this

Photo Store Gallery

  • Someone or thing is taking advantage of the inactivity at Kapyong Barracks,hundreds of Canada Geese-See Joe Bryksa’s goose a day for 30 days challenge- Day 15- May 22, 2012   (JOE BRYKSA / WINNIPEG FREE PRESS)
  • A monarch butterfly looks for nectar in Mexican sunflowers at Winnipeg's Assiniboine Park Monday afternoon-Monarch butterflys start their annual migration usually in late August with the first sign of frost- Standup photo– August 22, 2011   (JOE BRYKSA / WINNIPEG FREE PRESS)

View More Gallery Photos

Poll

Do you agree with the province’s crackdown on flavoured tobacco products?

View Results

View Related Story

Ads by Google