Gerard Arpey, head of American Airlines Inc. and parent AMR Corp., received 207,900 shares of AMR stock worth more than $6 million this week as part of a controversial stock program for executives that has American's unions up in arms.
Mr. Arpey's stock was valued at more than $6.6 million on Wednesday, the day the stock was issued. It has since lost more than $600,000 in value, with AMR shares off nearly $3 in New York Stock Exchange trading.
In all, five top AMR executives received 577,500 shares valued at nearly $18.5 million on Wednesday, down to just over $17 million as of Friday's close.
In its annual proxy statement, AMR said Mr. Arpey, its chairman, president and chief executive, received $10.2 million in total compensation in 2006, with $9.4 million from awards of stock and stock options.
He earned $581,534 in salary, with his annual rate of pay raised to $650,000 last July.
In the proxy statement, AMR also said Mr. Arpey's compensation counted all his stock-based awards, whether exercised or not, including stock and options granted in previous years. Including only the $4.8 million in stock awards and options granted in 2006, Mr. Arpey's 2006 compensation was $5.6 million.
Other executives' pay:
*Chief financial officer Tom Horton was listed with annual compensation of $7.8 million, with $456,222 from base salary.
*Dan Garton, executive vice president of marketing, had total income of $6.3 million, $512,378 from salary. Including only the 2006 awards, Mr. Garton received just under $3 million in compensation.
*General counsel Gary Kennedy had total compensation of $4.6 million, $471,973 from salary. His compensation totaled just under $2 million with only the 2006 awards added.
*Robert W. Reding, senior vice president of technical operations, had compensation of $4.5 million, with $457,728 from salary. Mr. Reding earned just over $1.9 million when the non-2006 awards were excluded.
Those figures do not include this week's awards from AMR's performance share program, since the officers did not receive the money in 2006.
The compensation total did include smaller awards from a similar program last year.
The company said Friday that it awarded about 5 million shares in all this week, which would be worth about $160 million at Wednesday's closing price or $145 million at Friday's close.
The stock awards have angered American's unions, which say that executives and other top managers shouldn't be getting rich payouts when the employees are still laboring under concessions negotiated in 2003.
On Wednesday, a large group of pilots marched on American's headquarters, following picketing Tuesday and a rally the previous Friday by flight attendants.
The Allied Pilots Association, which represents American's pilots, said Friday that it has submitted a shareholder proposal that would give AMR shareholders the right to vote on the compensation plans for top executives, although the vote would only be advisory to the company's board of directors.
AMR opposes the proposal, which will be voted on at AMR's annual meeting May 16.
"Upon approval and implementation of our resolution, a future affirmative vote by the stockholders would be a vote of confidence for existing compensation plans and amounts," union president Ralph Hunter said Friday.
"Conversely, AMR would not be required to make any changes to existing compensation programs if stockholders were to express concerns, but would be well-advised to discuss the stockholders' concerns," he said.
In the proxy, AMR defended its process for determining executive compensation and said the proposal "could put our company at a competitive disadvantage" and hurt shareholders by damaging AMR's ability to find and keep good people.
The AMR proxy indicated that none of the company's top five officers received pay bonuses last year.
The proxy said that Mr. Arpey and the other top four officers received 154 percent of their target shares because their awards were partially based on how well the company met corporate objectives as determined by the board of directors.
Copyright 2005 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.
Terms and Conditions | Privacy Policy
News stories provided by third parties are not edited by "Site Publication" staff. For suggestions and comments, please click the Contact link at the bottom of this page.
