The CEO of American Airlines Group has decided to forego a salary for 2015, instead will be compensated entirely based on the airline’s performance.
Doug Parker, who received $12.3 million in salary and bonuses in 2014, will take stock in the company with the actual amount dependant on American’s earnings.
Parker set out the new compensation package in a letter to American’s employees.
"I have asked our board to restructure my compensation such that I will no longer receive a base salary or an annual bonus. Instead, all of my primary compensation will be paid in AAL stock," he wrote.
"This stock will have to be earned over time and will also have to be earned by performance. I believe this is the right way for my compensation to be set — at risk, based entirely on the results achieved and in the same currency that our shareholders receive."
Parker said the amount will remain about 20% below the pay enjoyed by the chief executives of Delta Airlines and United Airlines until employee pay at American is at least on a par with those Airlines.
However the decision has been criticized by unions as American has refused to implement an employee profit sharing scheme- which can make a significant difference to take home pay for employees when airline performance is strong.
Recently Delta said its 80,000 workforce will get more than $1 billion in profit sharing, which equates to an average of two month’s extra pay for most employees.
"He aligns his interests with those of the company’s shareholders. We’re disappointed that he has thus far not taken the opportunity to do the same with profit-sharing – another form of performance-based compensation – which serves to align employee interests," said Allied Pilots Association spokesman Gregg Overman.
