Boston’s Logan Airport is one of 10 across the country to host flight attendant protests today. The American Airlines employees are pissed about compensation paid to the company’s executives.
Here’s the deal: flight attendants have had to stomach pay cuts, while executives have picked up a cool $100 million over the past six years. The flight attendants gave up $340 million a year in 2003.
I guess this is the difference between negotiating your own compensation and having a union do it for you.
American Airlines points out, according to the Boston Globe, that the largess doled out to the top dogs is incentive-based compensation, mostly tied to stock price. This isn’t unusual for the executive suite, as it requires the brass to generate value for shareholders in order to score big. So, the fact that the execs were able to rake in some dough means they rewarded shareholders first.
The airline also points out that its executives have only been paid 65 percent of their “intended compensation,” as the Globe puts it, over the past decade. Simply put: they have no choice but to take a pay cut when the airline fails to perform.
What’s interesting is that a flight attendant quoted in the Globe’s story wants “some accountability.” She doesn’t realize, however, that it’s already there. The comp structure is designed for it.