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“From the onset,” says a mechanic at American Airlines, “I didn’t like the sound of that slogan they were throwing around – ‘shared sacrifice.’ It just didn’t ring with any honesty with me.”
He’s just one of thousands of American employees who took massive pay cuts in 2003, costing them $1.6 billion every year since. It was necessary, the workers were told, to save the airline from bankruptcy. Share the sacrifice, promised the top executives, and we’ll share the gains with you.
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Sure enough, even CEO Gerard Arpey took a pay cut. Okay, it wasn’t much of one – $62,000 over two years on a salary of about $600,000 a year – but it was a gesture. Thanks to the employees’ deep cuts and solid work the last few years, not only did American avoid bankruptcy, but it is now profitable again.
So, to show his appreciation, Arpey handed out generous bonuses to everyone! Everyone in the executive suite, that is. Arpey personally pocketed a $6.6 million bonus. Four other top dogs split another $12 million in bonuses.
And the workers? They’re to continue sacrificing, not getting a penny of the gain. In other words, just as the mechanic sensed, Arpey was lying to them from the start.
Needless to say, American’s annual meeting in May was a bit “testy,” with workers openly calling the executives “arrogant, greedy, selfish, and heartless individuals.” Arpey, who had brought dozens of hired security agents into the meeting to protect him from his own employees, added insult to injury by saying that the executive bonuses were granted as a reward for solid performance. And what about the solid performance of the employees? Rather than answer that, Arpey abruptly adjourned the meeting.
This is Jim Hightower saying… When CEOs wonder why people think of them as self-serving jerks, they should just remember the name, Gerard Arpey.
“Airline executive bonuses raise ire of workers,” Washington Post, reprinted in the Austin American Statesman, May 22, 2007.
“Proxy Fights More Muted, for Most Part,” New York Times, May 16, 2007, http://www.nytimes.com/2007/05/16/business/16proxy.html?_r=1&dlbk=7oref=slogin&pagewanted=print
“Payback slower in coming for workers who bore load,” Houston Chronicle, May 17, 2007, http://www.chron.com/dis/story.mpl/business/steffy/4815037.html
“Shareholders reject vote-on-pay proposal,” Tulsa World, May 17, 2007, http://www.wallst.net/news/news_web.asp?webURL=http://www.tulsaworld.com/buisness/article.aspx?article ID=070517_5_E1_hShar13253
“AMR investors reject bid to cut executive compensation,” Austin American Statesman, May 17, 2007