The CEO of American Airlines got stock and option awards that were valued at nearly $2.7 million when they were granted last year, but the company says are virtually worthless since American filed for bankruptcy protection.
CEO Thomas W. Horton's compensation in 2011 would be valued at $3.3 million using The Associated Press' formula of including the value of stock and options when they were granted.
A company spokesman said, however, that Horton's compensation should be put at $650,196 _ about the same as in 2010, before he was promoted to CEO _ because the stock and option awards will not be distributed.
American's parent company, AMR Corp., listed compensation for top executives in the company's annual report filed Wednesday with the Securities and Exchange Commission. Those figures are usually included in a company's proxy statement, but AMR doesn't plan to issue a proxy statement or hold an annual shareholder meeting in 2012, said the spokesman, Bruce Hicks.
According to the AMR filing, Horton was paid a 2011 salary of $618,135, incentive pay of $83, and $31,978 in other compensation including personal air travel on American. Combined, they represent an increase of $1,289, or 0.2 percent, from his 2010 payment of $648,907 for the same categories and excluding stock and option awards.
In the filing, AMR said it valued Horton's 2011 award of 185,550 shares and 121,500 options at $2.22 million and $441,000 respectively when they were granted last May 18.
On that day, AMR shares closed at $6.58, but they fell throughout the rest of 2011 as the company's financial troubles grew. By the time AMR and American filed for bankruptcy protection on Nov. 29, the shares were worth 26 cents. They have been removed from the New York Stock Exchange, but closed Wednesday at 54 cents in over-the-counter trading.
In a footnote to its filing, AMR said of stock and option awards for Horton and other executives: "Also, as a result of the Chapter 11 filings and delisting of our shares, we anticipate that these awards will have minimal or no value, and the company does not plan to continue to distribute shares to recipients under any outstanding equity-based awards."
The AP calculates executive compensation by including salary, bonuses, perks, above-market interest that the company pays on deferred compensation, and the estimated value of stock and stock options awarded during the year.
Horton, 50, was AMR president and previously the chief financial officer. He was promoted to chairman and CEO the day before AMR filed for bankruptcy protection when Gerard Arpey, who had been CEO since 2003, stepped down rather than lead the company into a bankruptcy case.
Horton has proposed to cut 13,000 jobs, terminate American's pension plans, and reduce pay and benefits and change work rules to save $2 billion per year in a bankruptcy-fueled turnaround plan.
That has made him unpopular with many employees. On Tuesday, members of the flight attendants' and transportation workers' unions picketed at Dallas-Fort Worth International Airport. They chanted, "One, two, three, four _ throw Tom Horton out the door."
The CEO has said that if American follows his plan, it can salvage thousands of other jobs and emerge from bankruptcy as a strong stand-alone airline. But it could instead be merged with another airline.
US Airways Group Inc. officials have confirmed interest in buying AMR, and Delta Air Lines Inc. and other groups could also be bidders.
American, the world's biggest airline just four years ago, is now No. 3 in the United States by passenger traffic. AMR, which also owns the American Eagle regional airline, has about 88,000 employees.
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