BCT Editorial – 3/16/06

This page was last updated on March 16, 2006.

Shared sacrifice; Editorial; Beaver County Times; March 16, 2006.

Below is a detailed critique of the subject editorial.

“Many US Airways employees no doubt appreciated CEO W. Douglas Parker’s decision to forego a $770,000 bonus.

“Parker said he could not accept the incentive until the airline posts a profit. He said another reason he refused the bonus was that employees have not yet received anything from an employee profit-sharing plan.

“To beleaguered US Airways employees old and new, Parker’s gesture marks a break with the past. Too many prior executives took all that they had coming to them, no matter what the plight of the airline’s employees.

“The only downside to Parker’s decision was that others in management didn’t follow his lead. Given heavy baggage of labor-management relations of the old US Airways the newly merged company is carrying, any gesture reflecting shared sacrifice, no matter how small, could make a huge difference down the road.”

[RWC] I’m not trying to downplay Mr. Parker’s gesture, but the editorial failed to put it in context.

First, how much is Mr. Parker’s overall annual compensation and what is his net worth? $770,000 is a lot of money to you and me, but without knowing his overall compensation and net worth, we don’t know if the gesture is really meaningful or just for show.

Second, what kind of arrangement provides a bonus of any kind for the CEO of a company that’s losing money?