Milton/Rovinescu Stock Compensation

[IFG]

neo -

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Co., I'd expect any mitigations to RM & CR's benefits would have been pre-emptively highlighted. "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees taken for granted, RM & CR will collect millions if AC staggers along for another 4-5 years, even if the stock tanks (as far as we know about the terms of the stock provision).

• "...RM is on what board, exactly?"

On this one, neo, I could stand corrected if the G&M has it wrong. I infered from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that, only commenting on the optics, and even that only from specific points of view. They both had the capability to influence the decisions, and hitherto undeclared personaL interests, that's all.

All the best, IFG

[IFG]

neo -

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Coompany. I'd expect them to sugar-coat RM & CR's benefits (clearly a bitter pill for the other, scalped stake-holders) in any way they could. "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees are taken for granted, RM & CR can collect millions if AC staggers along for another 4-5 years, even if the stock plummets 90% (as far as we know about the terms of the stock provision). About the sports salaries - come on, neo, that's not just apples and oranges, more like apples and baseballs.

• "...RM is on what board, exactly?"

Uhh ... the AC Board? On this one, neo, I could stand corrected if the G&M has it wrong. I infered from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that, only commenting on the optics, and even that only from specific points of view. They both had the capability to influence the decisions, and hitherto undeclared personaL interests, that's all.

All the best, IFG

[Guest Rob Assaf]

I'm not sure I understand your statement.

The finacing from Mr Li comes with certain conditions. One of them is the procurement and placement of the 70-110 seat a/c. If the placement of these a/c type, or types as the case may be, is not satisfactory, ie profitable, the company is dead. No benefactor. Not Pining for the fjords, pushing up daisies. This airline won't voom if you don't put 600 million dollars into it. And folks, those dollars come with conditions, some that we may not like, some that some of us might like and others not, and some that everyone likes (ie company survivablity).

The fact that there was not one but two bidders give me some faint hope that I can still remain cautiously optomistic. They obviously saw SOMETHING worth saving or they would have considered doing something else with THEIR money.

If anyone or any union group thinks they should determine the placement of what a/c go where in this company, they better be prepared to pony up REAL cash and become the majority owner.

but what do I know, I could be wrong, I'm just a pilot.

[IFG]

neo -

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Company. Given the obvious PR challenges, I'd expect them to sugar-coat RM & CR's benefits (clearly a bitter pill for the other, scalped stake-holders) in any way they could. BUT - "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees are taken for granted, RM & CR can collect millions if AC just staggers along for another 4-5 years, even if the stock plummets 90% (as far as we know about the terms of the stock provision). About the sports salaries - come on, neo, that's not just apples and oranges, more like apples and baseballs.

• "...RM is on what board, exactly?"

Uhh ... the AC Board? On this one, neo, I could stand corrected if the G&M has it wrong. I infered from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that, only commenting on the optics, and even that only from specific points of view. They both had the capability to influence the decisions, and hitherto undeclared personaL interests, that's all.

All the best, IFG

[IFG]

neo - Fair questions ...

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Company. Given the obvious PR challenges, I'd expect them to sugar-coat RM & CR's benefits (clearly a bitter pill for the other, scalped stake-holders) in any way they could. BUT - "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees are taken for granted, RM & CR can collect millions if AC just staggers along for another 4-5 years, even if the stock plummets 90% (as far as we know about the terms of the stock provision). About the sports salaries - come on, neo, that's not just apples and oranges, more like apples and baseballs.

• "...RM is on what board, exactly?"

Uhh ... the AC Board? On this one, neo, I could stand corrected if the G&M has it wrong. I inferred from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that, only commenting on the optics, and even that only from specific points of view. They both had the capability to influence the decisions, and hitherto undeclared personaL interests, that's all.

All the best, IFG

[IFG]

neo - Fair questions ...

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Company. Given the obvious PR challenges, I'd expect them to sugar-coat RM & CR's benefits (clearly a bitter pill for the other, scalped stake-holders) in any way they could. BUT - "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees are taken for granted, RM & CR can collect millions if AC just staggers along for another 4-5 years, even if the stock plummets 90% (as far as we know about the terms of the stock provision). About the sports salaries - come on, neo, that's not just apples and oranges, more like apples and baseballs.

• "...RM is on what board, exactly?"

Uhh ... the AC Board? On this one, neo, I could stand corrected if the G&M has it wrong. I inferred from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( < http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that. I only commented on the optics, and even that only from specific points of view. They were both in a position to influence the decisions, and had hitherto undeclared personaL interests, that's all.

All the best, IFG

[IFG]

neo - Fair questions ...

• "Why are you sure about that? Restrictions and conditions on stock options and grants are rarely detailed..."

Just that anticipating the predictable reaction, and perhaps unfair comparisons to Carty et al's self enrichment plans at AA while employees were sucking it up for the Company. Given the obvious PR challenges, I'd expect them to sugar-coat RM & CR's benefits (clearly a bitter pill for the other, scalped stake-holders) in any way they could. BUT - "I'm sure" was not meant to imply "I know for sure.."

• "What's galling about this compensation package, over and above what is normal compensation..."

I didn't mean to comment on the level of the bonus. You're right, for outstanding performance it's probably not out of line at all. It is galling, to me at least, that while the sacrifices of other employees are taken for granted, RM & CR can collect millions if AC just staggers along for another 4-5 years, even if the stock plummets 90% (as far as we know about the terms of the stock provision). About the sports salaries - come on, neo, that's not just apples and oranges, more like apples and baseballs.

• "...RM is on what board, exactly?"

Uhh ... the AC Board? On this one, neo, I could stand corrected if the G&M has it wrong. I inferred from the following: "Air Canada spokeswoman Priscille Leblanc said Mr. Milton abstained from the board of directors' vote that selected Mr. Li's offer. Mr. Rovinescu is not on the board", that RM was on the board ( http://www.globeinvestor.com/servlet/ArticleNews/story/GAM/20031111/RAIRCEQ11 ). In a brief search to confirm it, I can't find any listing of the Board members (do you think they're in hiding?)

• "Are you saying that Air Canada's two top executives somehow manipulated the Board of Directors"

Not saying it, 'cause I don't know that. I only commented on the optics, and even that only from specific points of view. They were both in a position to influence the decisions, and had hitherto undeclared personal interests, that's all.

All the best, IFG

[Guest neo]

Anticipating the kind of reaction you've had, (galled, I believe it is?) the stock grant was announced up front rather than hidden from view.

It would be completely reasonable for you to wonder what, if any, restrictions are placed on the redemption of those stocks, but it is completely unreasonable for you to infer that that do not exist simply because you weren't told what they are. I repeat, stock options and grants to senior executives are often not made public at all, and when they are even less is said about any attached conditions.

And I gotta ask you, what kind of a bone-headed investor do you think Mr. Li is that he would not put restrictions on the sale of that stock grant? If he didn't do that, he might just as well give them $40 million cash up front, because it would amount to the same thing. Worse than giving them the cash really, because in addition to being out the $40 million in stock, Mr. Li would risk having his own stock devalued when M. & R. blew off their own holdings in your (purportedly) unrestricted sale. Double whammy.

Bottom line, IFG, is that you and I have NO IDEA what terms are for these stock grants.

To say you're sure something doesn't exist because you weren't told about it is irrational. It makes sense to me that restrictions would exist for the reason detailed above, and that we simply weren't told what those retrictions were, as per normal practice.

All of which is decidely besides any point that matters, anyway. If Mr. Li wants to throw his money away by not placing restrictions on the stock grants, that's his business. It's his own... personal... money. Not a penny of it comes out of Air Canada. In other words, Mr. Li, believing that Mr. Milton has a good plan for Air Canada, just paid for it out of his own pocket. It's Mr. Li's $40 MILLION DOLLAR GIFT to the employees of Air Canada and the rest of the shareholders.

Mr. Li's lawyer knows Calin Rovinescu? That's nice. And one of Air Canada's former directors, who also sits on the board of one of Mr. Li's other companies resigned from Air Canada last month. That's so that there wouldn't be a conflict of interest in the choice.

Mr. Milton could influence the Board of Directors at Air Canada? I sure as hell hope he can. If Mr. Milton has a good plan for a restructured Air Canada, are you saying they should turn their back on him? Why, because the optics aren't good?! Fer cryin' out loud, IFG, if the CEO of a company can't persuade the BOD that he's got the right plan, shouldn't he be on the street?

The suppositions and innuendo you're putting forward don't make sense to me. Mr. Milton reportedly had the equivalent offer from the other equity investor. What would he have to gain from influencing the BOD in Mr. Li's direction, as far as his own compensation is concerned?

Am I misreading what you're saying? Do you know details in this that we don't? Please, by all means, bring these details forward if you have them, and perhaps I'll have to change my position accordingly.

Best,

neo

[Guest neo]

Anticipating the kind of reaction you've had, (galled, I believe it is?) the stock grant was announced up front rather than hidden from view.

It would be completely reasonable for you to wonder what, if any, restrictions are placed on the redemption of those stocks, but it is completely unreasonable for you to infer that that do not exist simply because you weren't told what they are. I repeat, stock options and grants to senior executives are often not made public at all, and when they are even less is said about any attached conditions.

And I gotta ask you, what kind of a bone-headed investor do you think Mr. Li is that he would not put restrictions on the sale of that stock grant? If he didn't do that, he might just as well give them $40 million cash up front, because it would amount to the same thing. Worse than giving them the cash really, because in addition to being out the $40 million in stock, Mr. Li would risk having his own stock devalued when M. & R. blew off their own holdings in your (purportedly) unrestricted sale. Double whammy.

Bottom line, IFG, is that you and I have NO IDEA what terms are for these stock grants.

To say you're sure something doesn't exist because you weren't told about it is irrational. It makes sense to me that restrictions would exist for the reason detailed above, and that we simply weren't told what those retrictions were, as per normal practice.

All of which is decidely besides any point that matters, anyway. If Mr. Li wants to throw his money away by not placing restrictions on the stock grants, that's his business. It's his own... personal... money. Not a penny of it comes out of Air Canada. In other words, Mr. Li, believing that Mr. Milton has a good plan for Air Canada, just paid for it out of his own pocket. It's Mr. Li's $40 MILLION DOLLAR GIFT to the employees of Air Canada and the rest of the shareholders.

Mr. Li's lawyer knows Calin Rovinescu? That's nice. And one of Air Canada's former directors, who also sits on the board of one of Mr. Li's other companies resigned from Air Canada last month. That's so that there wouldn't be a conflict of interest in the choice.

Mr. Milton could influence the Board of Directors at Air Canada? I sure as hell hope he can. If Mr. Milton has a good plan for a restructured Air Canada, are you saying they should turn their back on him? Why, because the optics aren't good?! Fer cryin' out loud, IFG, if the CEO of a company can't persuade the BOD that he's got the right plan, shouldn't he be on the street?

The suppositions and innuendo you're putting forward don't make sense to me. Mr. Milton reportedly had the equivalent offer from the other equity investor. What would he have to gain from influencing the BOD in Mr. Li's direction, as far as his own compensation is concerned?

Am I misreading what you're saying? Do you know details in this that we don't? Please, by all means, bring these details forward if you have them, and perhaps I'll have to change my position accordingly.

Best,

neo

[Don Hudson]

Richard;

Been thinking a lot more about this..

How fully informed do you think the Investor is about the pension matter?

[Guest Rob Assaf]

Don,

How could he NOT be aware of the pension issue? At any rate, it was one of the conditional items to be addressed before final approval.

[Guest HPT-TOUR]

Let the litigation run its course, Winkler made the suggestion at the last meeting of the lawyers that it could be very expensive for one side, then just maybe there might be some reasoning.

[John S.]

How informed are the Investors?

If you refer to stock and debt holders, who knows?.

If you refer to Mr. Li then the answer is no doubt 'Very". His team of lawyers , accountants and various other business advisors have availed themselves to all matters and dealings at Air Canada. This includes the items deemed so sensitive that they had to sign confidentiality agreements before access and also includes the more public documents.

Of the latter we might take in OSFI's letters to Mr. Rovinescu and of the former Mr. Rovinescu letters to OSFI.

Oh, you can be sure that Mr. Li's advisors have a pretty good idea of the pension situation.

[Don Hudson]

Re "Oh, you can be sure that Mr. Li's advisors have a pretty good idea of the pension situation."

Thank you for such a solid and informed reassurance.

I am not at all unaware of what ought to be.

[Don Hudson]

Re "Oh, you can be sure that Mr. Li's advisors have a pretty good idea of the pension situation."

Thank you for such a solid and informed reassurance.

I am not at all unaware of what ought to be.

[Don Hudson]

Rob;

Re "How could he NOT be aware of the pension issue?"

Of course.

As I responded to John, I am not the least unaware of what ought to be, but that isn't the question I posed...

[Guest CDB]

Mr. Li's investment is conditional on the pension issue being properly resolved. At the moment, he feels assured that it will be taken care of satisfactorily and as such has ponied up the cash. If he didn't know what was going on he wouldn't have made the proposition in the first place; and if he finds out later on that the company did not fully disclose anything regarding the pension, he will pull out. As Rob inferred, how could the company not disclose everything?

I'm not sure what your question is Don...

[Homerun]

Sorry, I left a word out in my post. It should have said AC cannot legally place the aircraft at Jazz.

Read the press release again. It says nothing about placing the aircraft. Only financing and acquiring.

[RussD]

I'm guessing that the determonation of the placement of the a/c is one of the conditions the equity investment hinges on. Of course you realise that as far as Jazz is concerned AC can't place those a/c anywhere BUT Jazz.;-)

[GTFA]

Litigation sucks...

Co-operation rules!

Litigation enables intransigence and perpetuates disfunctional relationships.

Co-operation creates compromise and perpetuates progress.

GTFA

[John S.]

Don,

RE: I am not at all unaware of what ought to be.

Then you are not at all unaware if what one can post on this website. Last time I posted 'confidential' material (a snippet of Rainer's propaganda) I got dumped on.

You are asking how much Mr. Li know about the pension issue? There is a fair amount of correspondence that deals with the pension issue. Some of it deals directly with the ramifications of the investor conditions for investment. How could the investors including Mr. Li not know a lot about the pension issue?

For more information please call your ACPA pension reps and ask them (for starters) about OSFI's Direction of Compliance and AC's responses. If the ACPA pension reps do not have copies of these documents then perhaps you should call Mr. Rovinescu.

Like I said, no doubt Mr. Li's investigators did.

PS. I just re-read this post and it sounds like I'm speaking with a snippy tone. I don't mean it that way. Also, if anyone doesn't like it we can all wait until the book comes out to get the full biased story.

[Guest CDB]

Cooperation generally involves compromise - something I'm not sure some are willing to do

[Wolfhunter]

Rest assured that Mr. Li is very much aware of the pension situation. Can you imagine it being otherwise? As for Mr. Milton, the optics of his one percent of the stock (and not options mind you) is bad…very bad and he knows it. I suspect he will soon announce that he is extremely pleased and a bit humbled by the strong vote of confidence and trust that Mr. Li has in him and his fine management team. A grand gesture of solidarity with the employees will follow with much of the bonus being returned/converted to “further the cause”.

[Guest neo]

Hi Don,

It's clear that Mr. Li is aware of the pension issue as the resolution of its deficit is a condition of his purchase. How "fully informed" is he? Now we're into speculative territory.

I would assume that he's carefully looked at each and every substantive asset, liability and risk that goes along with his purchase. That's simply standard for any investment, including ones you or I might make. So I think it would be safe to assume that Mr. Li has a pretty good understanding of the issues associated with the pension deficit.

What is very much a speculative comment on my part is that it makes sense to me that Mr. Li, while remaining aloof from the cut and thrust of any negotiations around the pension plan, would have placed a limit on how much of his equity injection can go to funding the deficit. If he didn't do that, all his investment in Air Canada might simply be swallowed up by the pension plan black hole. But like I said, that's strictly speculative conjecture on my part.

Best,

Richard

[Don Hudson]

Wolfhunter;

Re your assurance to "Rest assured . . . "

I never, ever take that advice. "Rest assured" is about the last thing one hears as the door slams shut on knowledge and/or experience, and/or background.

Re, "Can you imagine it being otherwise?"

Yes, I can imagine it being otherwise, simply because of the nature of the game afoot, and by virtue of the players involved.

I've seen too much over many decades that has attempted to pass for truth in this industry to think otherwise.

Rest assured that I will never "rest assured".

We'll see how this unfolds.