- The Washington Times - Saturday, April 19, 2003

DALLAS (AP) American Airlines dropped a plan yesterday to award bonuses to six top executives if they stay at the embattled airline until 2005.

But American is leaving in place a supplemental pension plan for a broader group of top executives that would be protected if American filed for bankruptcy.

The plan had caused an uproar among American employees, who learned of the perks this week as they approved wage cuts and other concessions that the company said it needed to avoid bankruptcy.

"I have apologized to our union leaders for this and for the concern it has caused our employees," Chairman and Chief Executive Donald J. Carty said in a statement.

"Those executives who have made the personal commitment to remain with American during this financial crisis, myself included, are not here solely for monetary reasons, and we have all agreed to give up these retention payments in order to give our employees confidence in management's ongoing commitment to shared sacrifice."

Leaders of the airline's three biggest unions had said they might try to have the concessions thrown out because American didn't tell them about the executive perks until workers voted on the cost cuts.

The news that senior executives would give up their future bonuses but not the supplemental pensions partly mollified employees.

"That's great. That's the only responsible thing that could be done," said George Price, spokesman for the flight attendants union. But, he said, disclosing the perks after most employees had voted on concessions "is outrageous."

"The damage is done. The element of trust with senior management of this company has been destroyed," Mr. Price said.

He said the Association of Professional Flight Attendants would go ahead with its attorneys' review of the executive perks and the timing of their disclosure.

American's parent, AMR Corp., disclosed the perks in a filing with the Securities and Exchange Commission late Tuesday. The company promised six top executives bonuses equal to twice their salaries if they stay until at least January 2005.

Under the plan, Mr. Carty, who has a base salary of $811,000, would have received a $1.6 million bonus.

The company also made a payment to partially fund a supplemental pension trust for 45 executives and shield those benefits in case of bankruptcy.

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