American Airlines CEO Doug Parker took home his smallest paycheck last year since becoming the head of the Fort Worth-based carrier, bringing in $10.66 million in total compensation that doesn’t even factor in the financial pain of the COVID-19 pandemic.
Parker, who is paid almost entirely in stock awards, saw an 8% drop in compensation, similar to decreases seen by other top executives at the company, according to a regulatory filing released Thursday.
Most of Parker’s pay was based on the company’s 2019 year, a tough year for the airline as it struggled through the grounding of the Boeing 737 Max and engaged in a bitter contract battle with mechanics that the carrier blamed for thousands of delayed and canceled flights. Still, American made a $1.68 billion profit in 2019 and gave $213 million back to employees in the form of profit sharing.
That netted Parker $10.6 million in stock awards, which are based on short- and long-term financial goals set by the company. Those awards were granted in February 2020, a month before the coronavirus disrupted worldwide air travel and forced widespread shutdowns in the United States.
Last year, thanks to deep cutbacks forced by the COVID-19 pandemic, American lost $8.9 billion.
Pay will likely be down for all airline executives next year because carriers in the U.S. lost $35 billion in 2020 and payroll support grants by the government will limit compensation, too. CEOs at airlines that took government stimulus are required to take compensation cuts in exchange for the billions in payroll support they accepted to avoid furloughs during the pandemic. American has taken about $13 billion in grants through the three stimulus programs and another $10 billion in loans, which it paid back in March.
But the timing of those grants means that the stipulations won’t show on the compensation report for Parker and his peers for another year.
For example, Dallas-based Southwest Airlines CEO Gary Kelly saw his compensation go up 5.2% in 2020 to $9.2 million. Stock awards also make up the majority of Kelly’s pay and those awards are based on 2019 performance.
At American, Parker gave up his salary in 2015 to move to the all-stock compensation plan, along with about $33,000 for flight privileges, life insurance premiums and medical examinations. That kind of package can pay off for CEOs at companies that are performing well.
Parker’s compensation has mostly hovered between $11.1 million and $12.3 million a year during his time as CEO, with the exception of 2013 when he made $17.6 million based largely on bonuses he had for merging his former airline, US Airways, with American Airlines.
Elsewhere at American, president Robert Isom received $6.25 million, a 12% drop that was slightly larger because Isom earns a cash salary. CFO Derek Kerr, chief information officer Maya Leibman and executive vice president of corporate affairs Steve Johnson also saw decreases in compensation of about 13% in 2020.
Isom and other top executives who get a salary were supposed to receive a 2.5% increase in 2020, but that was put off when the pandemic hit. Isom’s salary was cut another 55% for the second quarter of 2020 and other top executives took pay cuts of 50% for the same period.
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