Ah, the new Gilded Age in the United States.
Gerard Arpey runs American Airlines, the world's largest airline. In 2006 he was paid a salary of $581,534 plus other compensation of $39,769. Not a big deal, you say. He does, after all, run a big airline, with a big reservation system and those numbers don't seem too ridiculous.
Except that Arpey, in 2006, received stock and option awards worth $4.8 million. And to top it off, in the middle of 2007, Arpey received a bonus worth $6.6 million. In fact, American Airlines chief financial officer and exceutive vice-president received bonuses of $3.4 million apiece. The general counsel and technical operations senior vice-president received bonuses worth $2.5 million each.
Do the math and you discover that, in 2007 bonuses alone, American Airlines top executives walked away with a total of $18.4 million. Why? Because American Airlines stock prices increased between 2004 and 2006.
Why is this so significant?
Because of this.
The three unions representing American's employees want to make up for double-digit wage and benefit cuts back in 2003, when the company was on the brink of bankruptcy. They argue that their sacrifices saved the nation's largest airline and they deserve to be rewarded now with big pay raises.And if you need to know more at this point, understand that the employees of American Airlines gave up $1.6 billion in pay and benefits to keep American Airlines flying.
Not so fast, airline executives say.
This week, American and the ground workers union broke off talks on a limited contract extension and pay increase. They'll resume negotiations in November.
Last week, American offered pilots pay increases -- if they fly more hours. The proposal would not raise basic wage rates.
Why does American Airlines feel they have to continue bringing the hammer down on their workers? Because, despite the increased stock prices, American Airlines is still in a weak market position. That would preclude handing out too much money... to its workers. The executives can feel free to bank their millions. The time of "shared sacrifice" is over.
Feeling a little angered yet?
Here. Let me make it even uglier. Marc has some figures that will have you stroking your cat backwards.