Is that an echo I hear?

[Kip Powick]

AA pilots 'outraged' at executive bonus plan

American's pilot union, which is engaged in contract talks with the airline, said it was outraged that a stock-based bonus plan for American's management could pay executives more in AMR stock in April 2007 than the $231 million airline earned in 2006. That bonus plan, based on AMR stock prices vs. that of comparable airlines, angered American's unions last year when management shared nearly $100 million in cash and stock. The actual payout will be based on stock prices in April 2007. Union members, who agreed to $1.6 billion in pay cuts, productivity improvements and other concessions to avoid the airline's bankruptcy filing in 2003, have criticized the management bonuses for coming before other employees could share in the airline's improving finances.

AA CEO defends bonuses

American CEO Gerard]Arpey argued that the bonuses, which are tied to American's stock price, are a justified portion of management compensation. "The fact that our stock has gone from $10 a share when the grants were made in 2004 to $40 today is not something I'm going to apologize for," he said. He added that American employees were issued 38 million shares of company stock in 2003 at a $5 strike price.