Under Fire for Perks, Chief Quits American Airlines
By EDWARD WONG
Published: April 25, 2003
In a series of stunning events, Mr. Carty's career began to crumble on the night of April 15, when American made a filing with the Securities and Exchange Commission that disclosed that the company had decided last March to give seven executives cash bonuses equal to up to twice their base salaries if they stayed until January 2005. Based on his salary of $811,000 in 2002, Mr. Carty's bonus would have been more than $1.6 million. The same filing also showed that American had made a $41 million pretax payment last October into a trust fund set up to protect the pensions of 45 executives if the company went into bankruptcy.
The unionized workers, who had just finished voting to accept the concessions, became infuriated after learning about the arrangements in news reports on April 17. Not only had American given out what the workers viewed as lavish perks at a time when the airline was asking them for cutbacks, but it appeared to them that Mr. Carty had delayed the securities filing by at least two weeks to hide information that might jeopardize the votes
All but one of the directors refrained from commenting publicly on the situation despite demands from workers and governance experts that they explain what they knew about Mr. Carty's decision to delay disclosure of the executive benefits.
On Wednesday night, the lone exception, Mr. Boren, said he would make a motion at the meeting to oust Mr. Carty and accused him of lying to both the board and to some of his fellow executives about whether he had told union leaders about the benefits. Mr. Boren, a former member of the United States Senate, told The Tulsa World that ''Mr. Carty has lost the credibility and trust necessary to effectively lead the company through challenging times.''