FORT WORTH, Texas - After announcing widespread employee layoffs and a slate of new fees on customers, AMR Corp., the parent company of American Airlines, quietly renewed a controversial stock plan for executives that has been worth millions of dollars over the last few years.
Under the latest version of the plan, approved by the airline's board Wednesday, executives and top managers would get an amount of AMR stock in 2011, depending on how the shares perform against nine other airlines between the start of 2008 and the end of 2009.
Gerard Arpey, chief executive officer of Fort Worth-based AMR, was awarded 230,000 shares in the plan, according to a filing with the Securities and Exchange Commission. If American is ranked No. 1 among the airlines, he would get 175 percent of that, or about 402,500 shares. At yesterday's closing price of $6.32 per share, that would be worth about $2.5 million.
The award could be worth more if AMR's stock price rises.
But if American were to rank last, Arpey wouldn't get anything. That goes with the airline's philosophy that most of the total compensation of top executives fluctuates dramatically depending on how the company performs.
The stock plans "strongly align the interests of shareholders and management," said spokesman Andy Backover.