And this contributor to Forbes really doesn’t like it. No doubt, it’s an odd situation. As the final bankruptcy plan is sent out for creditor approval, everyone still holding American debt appears to be in position to get 100% of their money. That doesn’t mean there weren’t some losers in bankruptcy (the union employees, for example).
I do think Tom Horton has done a good job navigating American Airlines through bankruptcy. IMO, he got Doug Parker at US Airways to “overpay” in the resulting merger, with AMR shareholders getting 72% of a combined entity. And, he did essentially negotiate himself out of a job. Sure, that’s what a good CEO is supposed to do, but I can’t really say I have a big problem with the board deciding to reward him for a job well done.
Doug Parker earned $5.5 million last year. Of the legacy CEOs (other than AMR), he made the least, with Smisek of United at about $8MM and Anderson of Delta earning almost $13MM. If you average those out to something like $8MM or $9MM a year, giving Horton a bit over 2 years of industry average severance doesn’t seem that appalling to me. Sure, AA hasn’t actually started turning big profits yet, but it is profitable now with the new labor contracts. Post-merger they should be in a strong position.
- American-US Airways Merger Moves A Step Closer With Bankruptcy Judge Approval
- American Airlines Expanding? Is There Labor Peace Post-Merger? What About That Expanded American-JetBlue Relationship?