AMR’s Top 5 Execs Sell Most of Stock Awards
By Terry Maxon, The Dallas Morning News
Apr. 22–AMR Corp.’s top five executives sold nearly 400,000 shares of company stock Thursday — most of about 550,000 shares they had just received that day as part of an executive compensation program from the parent of American Airlines.
Big sellers included AMR chairman Gerard Arpey, who sold 81,520 shares for $695,317. He had received 187,600 shares in the program that rewards executives based on how well AMR stock performs relative to that of competing airlines.
Two of Mr. Arpey’s top lieutenants surpassed his sales total. Executive vice presidents Dan Garton for marketing and Tom Horton for finance each sold their entire allotment of 103,984 shares, bringing in $886,932 apiece. (Mr. Horton is also the company’s chief financial officer.)
Meanwhile, general counsel and senior vice president Gary Kennedy sold all of his 76,380 awarded shares, at a sale price of $651,483.
Bob Reding, executive vice president for operations, received the same number of shares but sold only 25,184, for $214,807.
AMR spokesman Andrew Backover said Mr. Arpey and Mr. Reding sold enough stock to pay the taxes owed on it, while the others sold all the shares they received last week.
“Whether individuals hold or sell shares that vest is a personal decision,” he said.
In all, the five executives reported selling 391,052 of the 548,328 shares they had been given, for a total of $3,335,470.
Their shares were part of an estimated 4.3 million shares, worth around $38 million, that AMR, parent of American Airlines Inc., distributed Thursday to senior executives and other “key employees.”
The airline’s unions, which accepted deep cuts in pay, benefits and working conditions as the airline struggled in 2003, have complained about the stock awards to executives.
Monday, union officials said the quick sales by executives make it appear the top people don’t believe in their own company.
“It just gave me a sick feeling,” said Jim Little, Transport Workers Union international president. “It’s almost ‘take the money and run.’ “
“The question is, how much should the investors feel the executives are committed to this company?” said pilots’union spokesman Karl Schricker.
He said company’s board should have taken into account the airline’s dismal record on customer service and other areas when it decided on the stock awards.
“If you judge our management team on their performance, there should have been no bonuses this year of any kind,” said Mr. Schricker, an American pilot.
The Association of Professional Flight Attendants has said the top five executives should resign because they took the shares.
The stock program compared AMR’s stock price performance from the beginning of 2005 to the end of 2007 with that of other major airlines. AMR’s stock ranked second among the group, earning participants 135 percent of a target number of shares set aside for each person.
The company’s board cut the size of the awards to the five executives to 134 percent of the target based on how well the company had attained its corporate goals as well as improved its stock price.
—–
To see more of The Dallas Morning News, or to subscribe to the newspaper, go to http://www.dallasnews.com.
Copyright (c) 2008, The Dallas Morning News
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
NYSE:AMR,