AirTran furloughs announced, concessions requested

[meritflyer]

Stock holders vote on the compensation packages of management--they don't vote themselves a payraise like congress does.

Glad you brought up the point.

Too often people point fingers at the executives of a company for 'giving themselves pay raises' however, it's the BOD and shareholders that review compensation during an annual or biennial compensation review.

A CEO cant just walk in an bump his pay 50% without approval of the owners of the company FIRST.

 

[SlumTodd_Millionaire]

Stock holders vote on the compensation packages of management--they don't vote themselves a payraise like congress does. If you want management to take a pay cut, get involved in the process by owning a chunk of the action and vote your shares as you see fit.

You know as well as I do that institutional investors (banks, hedge funds, etc...) control the overwhelming majority of the stock in almost every corporation, and they all rubber-stamp whatever the board requests on compensation packages.

Oh, and I do own company stock, by the way. I've owned AirTran stock for about eight years, in fact.

 

[ljg]

Glad you brought up the point.

Too often people point fingers at the executives of a company for 'giving themselves pay raises' however, it's the BOD and shareholders that review compensation during an annual or biennial compensation review.

A CEO cant just walk in an bump his pay 50% without approval of the owners of the company FIRST.

That does not preclude executives from forfeiting compensation bonuses on their own integrity, or reinvesting that money back into the company. Parker gave a year's salary into company stock when Us Airways announced the 1,700 employee reductions last month. I'm not Doug Parker's cheerleading section but that's the noble thing to do when it's necessary to trim labor.

 

[JoelT]

We also, know that executive salary is only a small percentage of total compensation. At most airlines bonuses make up the majority of compensation. That is NOT voted on. Prime examples include the Mullin, Arpey, Tilton, and Leonard administrations.

 

[meritflyer]

Compensation is BOD governed. This includes bonus, stock, salary, and so forth.

 

[SlumTodd_Millionaire]

Compensation is BOD governed. This includes bonus, stock, salary, and so forth.

Yes, but the BOD is a lot different than the shareholders. Typically, BOD members are all buddies. Even the supposedly "independent" members aren't really independent at all. They all pat each other on the back with fancy bonus packages, stock grant programs, etc... It's all a joke.

 

[BobDDuck]

Board of Directors

Robert L. Fornaro
Chairman, Chief Executive Officer and President

J. Veronica Biggins
Director
Partner, HNCL Search

Don L. Chapman
Director
Chief Executive Officer, Chapco Investments, Inc.

Geoffrey T. Crowley
Director
President Northshore Leasing

G. Peter D'Aloia
Director
Senior Vice President & Chief Financial Officer, Trane, Inc.

Jere A. Drummond
Director
Retired Vice Chairman, BellSouth Corporation

John F. Fiedler
Director
Retired Chairman of the Board, BorgWarner, Inc.

Lewis H. Jordan
Director
Principal, Wingspread Enterprises, LLC

Alexis P. Michas
Director
Managing Partner, Stonington Partners, Inc.

Let's take a bit of a closer look at these people.

Robert Fornaro, not only sits on the board but is also the CEO and President of Airtran. So, when he votes for executive bonuses and raises (as a board member) he's actually voting for his own raise. Nice.

Ms. Biggins is a partner for HNCL which is a big name executive headhunting firm. If I'm not mistaken, it was HNCL that brought Fornaro (and a few others) to AAI to begin with. So, when she votes for executive bonuses she is voting for her former clients to receive them.

Don Chapman was elected to the board in 1994 when he was serving as the President of Tug Manufacturing. That would be the same company that makes ground support equipment for airline operations. Now, I've never sat up front on an Airtran flight, but I'd bet good money that when one of those planes pushes back, it's a TUG tug doing the pushing. I wonder how Tug Manufacturing (now S&S Tug Manufacturing) got THAT contract?

Geoff Crowley used to be the President and CEO of AWAC. AWAC, at one time flew for Airtran.

Peter D'Aloia is a senior VP at American Standard. Up until 2 years ago a senior VP from Airtran sat on the American Standard board.

Jere Drummond is a former Bell South guy. I have no idea about any connections to anything with him. (And he is the guy on the compensation committee)

John Fiedler used to work for Goodyear tire. He was also Chairman Of The Board for BorgWarner (an auto supplier) which interestingly enough, Jere Drummond also served on.

Lewis Jordan was the President and CEO of Airtran from 1993 until 1997.

Alexis Michas runs Stonington Parnters, a private equity firm, which at one point in time was heavily invested in Airtran. Oh, and he's on the BogWarner Board too.

It's sort of like playing 6 degrees of Kevin Bacon, but everybody is an executive, and not an actor.

 

[kellwolf]

My question is would Congress have voted "yes" on the Iraq package if the Bush admin hadn't done such a good, Amway-like sell job. Take that out of the equation, and I'm betting the answer would be "no."

Now, back to the topic. It's a company I know well, so I'll use Disney as a prime BOD/CEO example in corporate America. Revenue on the decline, the Disney name not nearly respected as much and park attendence WAAAAY down. Eisner still gets a fat raise and a bonus. Why? B/c not only are everyone on the BOD buddies with him....they're flat out SCARED of him. Except for this one guy named Roy Disney, and he got pushed out thanks to Eisner sweet talking to rest of the BOD to toss him. Nice. The guy is the namesake of the company and Walt's NEPHEW, but b/c he went toe to toe with Eisner, he got the shaft. What finally got Eisner out was a grassroots campaign started by Roy Disney and one other BOD member from Goldman-Sachs communicating with shareholders. Even then it took YEARS to get Eisner out....and he was replaced by a hand picked successor anyway.

I've personally witness Eisner's iron hand and total disregard for what the Disney consumers wanted. Case in point Alien Encounter. When it first came out, it was scary. Like REALLY scary. It was something new for the Magic Kingdom, and the public LIKED it. Gave the thrill seekers something beyond Space Mountain. The exit surverys and polls showed it with a favorable appeal. Then Eisner came to see and said "I don't like it, change it." So, they toned it down, and it never was as good. Guest approval ratings dropped on it, and most people saw it once, said "eh" and walked over to ride Space Mountain 5 times. Now it's toned down even more as a "Lilo and Stitch" attraction.

 

[kellwolf]

John Fiedler used to work for Goodyear tire. He was also Chairman Of The Board for BorgWarner (an auto supplier) which interestingly enough, Jere Drummond also served on.

I don't know for sure which tires Airtran uses, but I bet I could make a guess.....

 

[SlumTodd_Millionaire]

Let's take a bit of a closer look at these people.

Robert Fornaro, not only sits on the board but is also the CEO and President of Airtran. So, when he votes for executive bonuses and raises (as a board member) he's actually voting for his own raise. Nice.

Ms. Biggins is a partner for HNCL which is a big name executive headhunting firm. If I'm not mistaken, it was HNCL that brought Fornaro (and a few others) to AAI to begin with. So, when she votes for executive bonuses she is voting for her former clients to receive them.

Don Chapman was elected to the board in 1994 when he was serving as the President of Tug Manufacturing. That would be the same company that makes ground support equipment for airline operations. Now, I've never sat up front on an Airtran flight, but I'd bet good money that when one of those planes pushes back, it's a TUG tug doing the pushing. I wonder how Tug Manufacturing (now S&S Tug Manufacturing) got THAT contract?

Geoff Crowley used to be the President and CEO of AWAC. AWAC, at one time flew for Airtran.

Peter D'Aloia is a senior VP at American Standard. Up until 2 years ago a senior VP from Airtran sat on the American Standard board.

Jere Drummond is a former Bell South guy. I have no idea about any connections to anything with him. (And he is the guy on the compensation committee)

John Fiedler used to work for Goodyear tire. He was also Chairman Of The Board for BorgWarner (an auto supplier) which interestingly enough, Jere Drummond also served on.

Lewis Jordan was the President and CEO of Airtran from 1993 until 1997.

Alexis Michas runs Stonington Parnters, a private equity firm, which at one point in time was heavily invested in Airtran. Oh, and he's on the BogWarner Board too.

It's sort of like playing 6 degrees of Kevin Bacon, but everybody is an executive, and not an actor.

Excellent post! This is exactly how just about every corporation in America is set up. Most board members serve on multiple corporate boards, and they're all buddies with each other. They all go to the same rich parties, they all golf together, they're godfathers of each others children, etc... There is no accountability and independence. It's all a sham.

 

[surreal1221]

The same disconnect that they were raised in, they get to grow up and live now.

Those fools never understand the issues the middle class (working class) have because they've never had to deal with the issues.

They grow up in their extremely well to do families, and then they get to pass from one company to the other as they collect BOD memberships like they're Magic The Gathering cards.

And we're suppose to respect these people?

YGTBSM.

 

[SlumTodd_Millionaire]

And we're suppose to respect these people?

I know I don't.

 

[surreal1221]

Say it ain't so!1

 

[mikecweb]

When we handing out the torches and pitchforks?

 

[BobDDuck]

When we handing out the torches and pitchforks?

We WOULD be doing that later today, but apparently the freight/charter guys used them all up going after RJ drivers.

 

[surreal1221]

that's the funniest thing I've seen on here in a long time. . .bravo.

 

[mikecweb]

We WOULD be doing that later today, but apparently the freight/charter guys used them all up going after RJ drivers.

I think I had a dream similar to that a few nights ago.

 

[surreal1221]

The freight segment's equivalent of the Boston Tea Party huh? Tossing all the little RJ's into the drink.

A freight dog's wet dream I'm sure.

 

[kellwolf]

The same disconnect that they were raised in, they get to grow up and live now.

Those fools never understand the issues the middle class (working class) have because they've never had to deal with the issues.

They grow up in their extremely well to do families, and then they get to pass from one company to the other as they collect BOD memberships like they're Magic The Gathering cards.

And we're suppose to respect these people?

YGTBSM.

Oh god. You just won a beer by working M:tG into this. I always knew Phil Trenary was "Lord of the Pit."

 

[surreal1221]

Nice, you off tomorrow or Weds?

I'll jumpseat my happy ass up there for a drink.