Dec. 11--Thomas Horton, who was American Airlines' chief executive when its parent company filed for bankruptcy, will get his severance package valued at about $17 million.
That was among the first decisions made by the new American Airlines after it emerged from bankruptcy Monday and joined with US Airways to form the world's largest airline.
Horton gave up the post of chief executive to Doug Parker, who was formerly the top executive at US Airways. Horton will act as chairman of the board of the new American Airlines Group Inc.
According to records filed with the U.S. Securities and Exchange Commission, the newly merged airline agreed to pay Horton $5.4 million in cash, an "alignment award" valued at $6.5 million, plus a performance bonus that could rise as high as $1.3 million. In addition, Horton will get 170,722 share of stock, worth $4.2 million at Monday's closing price of $24.60.
Horton, his wife and "eligible dependents" will also get lifetime "flight and other travel privileges," according to the filing.
While AMR Corp. was in bankruptcy, the airline sought to pay Horton a severance package worth about $20 million. But the amount was rejected by the bankruptcy judge, who said the payout could not be part of the bankruptcy process.
Meanwhile, Parker was awarded a retention bonus of 626,600 shares, worth about $14 million. But the shares won't begin to be vested until the end of 2015, with payment of half tied to the company meeting certain merger targets, Parker said in a letter to employees.
Parker said the new board would establish his salary in January, but he promised his workers that his total compensation would be at least 15% less than his peers at Delta and United.
"You shouldn't have to guess about my compensation or be surprised to learn what I made," he said in the letter to his employees.
What to do with the loose change left at TSA checkpoints?
Copyright 2013 - Los Angeles Times
Outgoing CEO will receive nearly $17 million, plus a lifetime of free flights on American for himself, his wife and "eligible dependents," and an office and support staff for
Workers who took pay cuts during industry's slump are furious about rewards for executives.
Doug Parker could receive more in bonuses and stock if the carrier performs financially.
Doug Parker made about $9 million this week by exercising options granted years ago.