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Topic: Judge Denies $20M Severance To Horton
Username: MaverickM11
Posted 2013-04-12 06:48:52 and read 6525 times.

I don't even understand how Horton gets a $20M severance in the first place, let alone how anyone can approve it. Meanwhile Gary Kelley gets a whopping $3.5MM for 2012, for running a profitable airline and a merger. Horton did what, exactly, to merit $20M? No wonder AMR labor hates him.

http://finance.yahoo.com/news/judge-denies-amr-ceo-20-121734395.html

"A judge has rejected a proposed severance package of nearly $20 million for Thomas Horton, the chief executive of American Airlines parent company AMR Corp, saying the payout wasn't allowed under federal bankruptcy law."

Topic: RE: Judge Denies $20M Severance To Horton
Username: FLFlyGuy
Posted 2013-04-12 11:47:22 and read 5998 times.

Well, perhaps Mr. Horton will now understand, as every one of his line employees have had to come to understand, what it is like to have something that has been committed to by his organization jerked out from under him.

I am sure he will get his chunk of change somehow, some time, some way but the rest of us have to deal with reduced pay, gutted retirement and insurance, and a sense of betrayal for the rest of our careers.

I'm glad he is going to experience a little of the pain he has caused so many others.

Topic: RE: Judge Denies $20M Severance To Horton
Username: slider
Posted 2013-04-12 11:55:19 and read 5928 times.

Awesome.

I don't play the class envy card and don't think that's what this is about, but there's a tasty irony here that finally an exec gets treated in a similar manner as the rank and file when employment/labor contracts get abrogated.

Horton's golden parachute is rapacious.

Topic: RE: Judge Denies $20M Severance To Horton
Username: LAXintl
Posted 2013-04-12 12:19:12 and read 5813 times.

Its posted in the AMR BK thread already.

As the judge said. Nothing stops the post BK merged company from electing to award what it wishes.
Horton will get his money. Judge even said the amount was reasonable based on prior mergers except his hands were tied based on revised BK law.

Topic: RE: Judge Denies $20M Severance To Horton
Username: SSTeve
Posted 2013-04-12 12:44:51 and read 5715 times.

Quoting LAXintl (Reply 3):
Nothing stops the post BK merged company from electing to award what it wishes.

The board ought to. Corporate boards are incestuous rubber-stamping mutual backscratchers, though. 20M is ridiculous-- promise of severance that large is supposed to be necessary to keep the CFO of a company that became illiquid around? No way. Do they even try to negotiate those terms? Probably not. They're throwing company money away because they don't care to actually drive a hard bargain for a guy they could have kept for so much cheaper. Like 1/10th the guaranteed severance.

Topic: RE: Judge Denies $20M Severance To Horton
Username: Independence76
Posted 2013-04-12 13:51:44 and read 5517 times.

You don't need to be a union supporter to understand this severance package is absolutely ridiculous.

In 2012 alone, AMR (while getting a $262 Mil. profit in Q4) lost a total of $1.9 Bil. (only 200 Mil. less than 2011 under Arpey). That is not a successful turnaround.

The 2013 Q1 results are not even close to being out-the-door and a single quarterly profit does not entitle a merger-bonus package.


I think we're living in an age where an airline management employee cannot walk away with more than half-a-million and be expected to be admired by their employees. That doesn't mean the employees are wrong - it means that corporate culture like this cannot continue and go unnoticed.

[Edited 2013-04-12 13:52:55]

Topic: RE: Judge Denies $20M Severance To Horton
Username: flyfree727
Posted 2013-04-12 13:56:05 and read 5487 times.

Quoting FLFlyGuy (Reply 1):
I am sure he will get his chunk of change somehow, some time, some way

That's pretty much the consensus amoung employees, but oh it seems so sweet that he got publicly spanked in court.

Give him his money and get him the hell out of here, egg on face and all.

AA ORD

Topic: RE: Judge Denies $20M Severance To Horton
Username: MaverickM11
Posted 2013-04-12 13:56:15 and read 5475 times.

Quoting LAXintl (Reply 3):
Its posted in the AMR BK thread already.

Buried in that thread that hasn't been read in over a week...

Quoting LAXintl (Reply 3):
Nothing stops the post BK merged company from electing to award what it wishes.

Which I totally support, however $20M for Horton is a flat out dare to labor to make the merger as ugly and vindictive as possible. Horton deserves a goodbye card, at best, and that is it.

Quoting slider (Reply 2):
Horton's golden parachute is rapacious.

   The guy was dreadful, useless, and honestly made things worse. So here's $20M! I don't understand why they can't just say, you're not in charge anymore, you are in bankruptcy, so why don't you leave before we send you a bill?

Quoting SSTeve (Reply 4):
They're throwing company money away because they don't care to actually drive a hard bargain for a guy they could have kept for so much cheaper

How does Horton have any leverage? He was not even in charge even when he was CEO.

Topic: RE: Judge Denies $20M Severance To Horton
Username: jfklganyc
Posted 2013-04-12 14:14:08 and read 5400 times.

Good! A very happy day to see this rejected.

I got more likes on fb with a link to the yahoo.news story about rejection than I have in a while.

After the great bailouts of 2008, people are really tired of the golden parachute story.

Topic: RE: Judge Denies $20M Severance To Horton
Username: lightsaber
Posted 2013-04-12 14:20:03 and read 5372 times.

Quoting MaverickM11 (Thread starter):
saying the payout wasn't allowed under federal bankruptcy law."

Ouch... That makes appeals tough.

Quoting Independence76 (Reply 5):
You don't need to be a union supporter to understand this severance package is absolutely ridiculous.

I not anti union, but neither am I pro-union and I'm happy with this decision.

Somehow this feels better. Even if he was overpaid when on the job.

Lightsaber

Topic: RE: Judge Denies $20M Severance To Horton
Username: SSTeve
Posted 2013-04-12 14:30:29 and read 5332 times.

Quoting MaverickM11 (Reply 7):
How does Horton have any leverage? He was not even in charge even when he was CEO.

I'd say he has some as having been a C-level exec, in that you don't want someone "learning the ropes" in the middle of deciding what to liquidate and what to invest in. But like I said, you really can't argue that $20M severance was necessary to keep him!

Topic: RE: Judge Denies $20M Severance To Horton
Username: LAXintl
Posted 2013-04-12 15:33:04 and read 5196 times.

Imo $20mil is quite appropriate for departing CEO and chairman of the board.

Court even said so, pointing to the previous DL-NW and UA-CO mergers as a reference.

Doug Steeland of NW received $26.6mil in 2008 while Glenn Tilton at UA received $16.8mil. UA's COO got $11.7mil, CFO $9.4mil, departing after the merger.

And this is pennies compared to other industries. For example Home Dept CEO Bob Nardelli receive $210 million severance package.

Topic: RE: Judge Denies $20M Severance To Horton
Username: MaverickM11
Posted 2013-04-12 15:47:07 and read 5144 times.

Quoting LAXintl (Reply 11):
Court even said so, pointing to the previous DL-NW and UA-CO mergers as a reference.

They were both CEO for years, rather than months, and they weren't in bankruptcy at the time either. I think this is the perfect time to tell Horton to take a hike.

Topic: RE: Judge Denies $20M Severance To Horton
Username: flyfree727
Posted 2013-04-12 15:47:57 and read 5144 times.

Quoting LAXintl (Reply 11):
appropriate for departing CEO and chairman of the board

I believe the issue was that is wasn't appropriate (or legal) for a company that is STILL in bankruptcy. He'll get the money though, no doubt about it.

AA ORD

Topic: RE: Judge Denies $20M Severance To Horton
Username: SSTeve
Posted 2013-04-12 16:02:35 and read 5078 times.

Quoting LAXintl (Reply 11):
Imo $20mil is quite appropriate for departing CEO and chairman of the board.

Comparing it to a bunch of other ridiculous giveaways doesn't make it "appropriate." In any other business metric, they'd be trying to earn money by not being as stupid as the competition, not throw it away with little necessity. Apparently boards are willing to make hardheaded decisions, present company excepted. It's atrocious.

Topic: RE: Judge Denies $20M Severance To Horton
Username: Aesma
Posted 2013-04-12 16:06:28 and read 5052 times.

To me it's difficult to justify very high salaries (in the millions) in general, but it's even more difficult if you have golden parachutes. Surely you can't argue someone paid that much needs money when fired/quits/retire.

Topic: RE: Judge Denies $20M Severance To Horton
Username: SSTeve
Posted 2013-04-12 16:36:59 and read 4914 times.

Quoting Aesma (Reply 15):
To me it's difficult to justify very high salaries (in the millions) in general, but it's even more difficult if you have golden parachutes. Surely you can't argue someone paid that much needs money when fired/quits/retire.

A quick hand-wavy argument in support would be that if the decisions Horton made saved the company anything more than $20M, well then he must deserve it. The difficult thing is that they have to be decisions that a cheaper substitute would not have also made. It's hard to argue that if the next guy in the AA pecking order would have settled for $1M severance, that the next guy would've made $19M worse decisions.

Topic: RE: Judge Denies $20M Severance To Horton
Username: Flighty
Posted 2013-04-12 17:15:32 and read 4603 times.

Quoting MaverickM11 (Reply 7):
The guy was dreadful, useless, and honestly made things worse. So here's $20M!
Quoting MaverickM11 (Reply 12):
I think this is the perfect time to tell Horton to take a hike.

  

Totally agree. Just because "he was there" isn't a good enough reason for 20 million. My feeling was, he wasn't a leader, didn't belong in the CEO chair. Virtually nothing he said provided insight or proved to be correct.

Doug Steenland -- now there, you have a guy who actually carried the airline on his back through BK and positioned it for lasting success. Pretty much everything he said in print turned out to be correct. He knew what he was doing and got excellent results.

[Edited 2013-04-12 17:18:07]

Topic: RE: Judge Denies $20M Severance To Horton
Username: aryonoco
Posted 2013-04-12 18:54:32 and read 3854 times.

Quartz has an article on why Horton "probably won’t cry over the $20 million a judge denied him", for three reasons:

1. The company plans to try again.
2. The judge didn’t touch another big chunk of cash that American promised Horton.
3. That pension is probably safe even if the judge does take an interest in it.

Source: http://qz.com/74018/

Interesting perspective.

Topic: RE: Judge Denies $20M Severance To Horton
Username: ltbewr
Posted 2013-04-12 19:07:50 and read 3791 times.

I am glad to see a Bankruptcy Judge say no to big payoffs to executives of ruined companies. Now if we could get companies to stop paying so much to CEO's and pay more the line workers, maybe it would mean a few less failures.

Topic: RE: Judge Denies $20M Severance To Horton
Username: Mir
Posted 2013-04-12 20:03:22 and read 3412 times.

Quoting LAXintl (Reply 11):
Imo $20mil is quite appropriate for departing CEO and chairman of the board.

If he did some useful things for the company, sure. But I'm not sure that applies to Horton. He was there for what, half a year? You shouldn't be getting $20 million just for being the CEO.

-Mir


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