American Airlines’ CEO Has Already Taken Home $19.2 Million This Year
Doug Parker, the chief executive officer of American Airlines, has already taken home $19.2 million this year, well more than he received for all of last year.
The stock appreciation rights he exercised, disclosed in a filing Wednesday, are just part of Parker’s 2018 take-home pay. The awards had been granted in 2008 and were set to expire in April. He’s also set to receive payouts from restricted stock awards — some of which are tied to performance — that could bring his total to more than $31 million this year, based on Tuesday’s closing price. His take-home pay was $11.3 million last year, the majority of which came from stock awards.
In 2015, Parker gave up the cash portion of his compensation, saying he would be paid only in stock to reflect his confidence in the airline’s growth opportunities. The world’s largest carrier posted record profit in 2014, his first full year as chief executive following a merger with US Airways.
Parker, 56, has said that industry consolidation has caused a fundamental shift that will eliminate steep losses and bankruptcies among carriers. He has predicted that American Airlines Group Inc. will earn $3 billion to $7 billion a year and should never again post an annual loss.
Parker has focused on improving bad labor relations that hounded American for decades. He added a profit-sharing plan and last year gave mid-contract raises to pilots and flight attendants to put them on par with counterparts at other airlines. In 2016, he ended his own contract, becoming an “at will” employee like the airline’s 100,000 workers. That means he doesn’t get guaranteed compensation and isn’t protected from a change in control.
Parker exercised 437,356 stock appreciation rights on Tuesday with strike prices of $8.14 and $8.84 — about one-sixth of the sale price. His gains from SARs were lower last year because the original exercise price was $45.01, just $4 below the price on the sale date.
Parker typically exercises equity awards in January through a prearranged trading plan. For at least the past four years he has exercised SARs that were due to expire in the same year.