The chief executive of American Airlines resigned on Thursday after receiving
criticism from labor unions over executive benefits, the New York Times reports.For a Limited Time receive a
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Get Your Report Now!Donald J. Carty, who was also the company's chairman, ended his tenure at the
airline as the company continues to struggle to stave off bankruptcy. Labor
unions criticized the airline and Carty for giving executives what the unions
viewed as lavish perks while at the same time asking unions to make concessions.
Carty caught the unions ire just after the unions narrowly approved the original
concessions, when news circulated that American disclosed, in a filing with
Securities and Exchange Commission on April 15, that the airline planned to
give executives cash bonuses equal to up to twice their salary, the newspaper
notes. The airline called the perk a retention bonus. The filing also showed
that the airline made a $41 million payment to a trust fund designed to protect
the pensions of executives if the company fell into bankruptcy.
The unions said it appeared Carty delayed the filing with the SEC to avoid
jeopardizing any votes on the concessions, the newspaper reports.
After the disclosure, unions balked at the concessions.
Almost a week
prior to his resignation Carty announced that the airline had cancelled the
retention bonuses. The newspaper says it was not enough to save Carty's job.
On Wednesday night, a day before Carty's resignation, union leaders for two
of the three unions at American agreed to less costly concessions. The Association
of Professional Flight Attendants approved the updated concessions on Friday.
American said that Gerard J. Arpey, president and chief operating officer,
would be the next chief executive. Edward A. Brennan, a director at American,
would become chairman.
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