Smisek - No pay until CO is profitable

 

Old Jan 4, 10, 11:20 am
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Press release just out. No salary bonus or 401K unless company shows annual profit. That's for any year not just 2010.
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Old Jan 4, 10, 11:47 am
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Link to story: http://abcnews.go.com/Business/wireStory?id=9474469

Smisek said if employees want better pay and benefits, they need to focus on making money. He said he was making his pledge because "the tone for any business is set at the top."

I think I like him already. I guess Larry's Rah! Rah! love-fest is over. It's time to get to work.
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Old Jan 4, 10, 11:58 am
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I applaud him as one of the very few leaders of American business willing to make a sacrifice of his own before obliging his people to make sacrifices.

I hope that this gesture will aid in restoring morale among the line employees at CAL.
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Old Jan 4, 10, 12:36 pm
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Thumbs up leadership

Leadership as is refreshingly rare in today's world.

I fear the period could be a while as the industry faces so many uncontrollable threats.
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Old Jan 4, 10, 12:45 pm
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He won't exactly be applying for food stamps, I'm sure. According to their latest proxy, he holds restricted shares and options on 278,000 shares. Those stand to pay off handsomely if he returns the company to profit. And he'll get a nice bonus when he does become eligible.

It's certainly a good move for him from a PR standpoint, but it does portend belt-tightening throughout the airline.
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Old Jan 4, 10, 12:55 pm
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Originally Posted by Stripe View Post
He won't exactly be applying for food stamps, I'm sure. According to their latest proxy, he holds restricted shares and options on 278,000 shares. Those stand to pay off handsomely if he returns the company to profit. And he'll get a nice bonus when he does become eligible.

It's certainly a good move for him from a PR standpoint, but it does portend belt-tightening throughout the airline.
Notice too that he is not taking the normal annual bonus if they don't profit. Many CEOs took their huge 'bonus' last year leading their company into big red.

Sure he has stock options, same as Steve Jobs does for his $1. being based on stocks give them incentive to make it perform.
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Old Jan 4, 10, 1:12 pm
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Originally Posted by Stripe View Post
He won't exactly be applying for food stamps, I'm sure.
Exactly. This is a tawdry stunt on Jeff's part. Worse, it portends further cuts in amenities and services. Wake up! This does not focus on "...making money on an ongoing basis." It's a silly trick.

RNE, saying, "I am surprised anyone is lauding the Giant Ferret or his duplicitous announcement."
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Old Jan 4, 10, 1:12 pm
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A very classy move, IMO.
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Old Jan 4, 10, 2:40 pm
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This isn't the first time that Larry/Gordon/Jeff have done things similar to this. But having said this, I agree completely that its the right thing to do for the top brass.
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Old Jan 4, 10, 2:48 pm
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Interesting PR stunt- 3 major work groups have contracts up for negotiations - if he thinks we don't work hard now, it is going to be a bumpy ride for him going forward.

For the past decade we took it in the shorts with no positive long term results. I can't wait to hear what everyone thinks when we start our own B-O-B - no more "meals at mealtime" without paying.
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Old Jan 4, 10, 2:54 pm
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This is about solidarity. Jeff announcing that he is not taking any salary/bonus lets me know that he won't be taking a big bonus on possibly myself and other res agents losing their jobs in a few months.

Now I know that Jeff won't struggle to make his mortgage payment. With all the things wrong within CO all the things that infuriate me, this simple action goes a long way to boost my morale. So from one lowly Res agent, thank you Jeff.
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Old Jan 4, 10, 3:09 pm
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Originally Posted by Don'tGoThere View Post
I can't wait to hear what everyone thinks when we start our own B-O-B - no more "meals at mealtime" without paying.

If it means that CO can raise the quality of its meals so that they're like what DL, UA, US, etc. sell, then it'll probably be a net positive.

Right now it's turkey dog or nothing. The first time they served me one of those, I knew it was time to go BOB.
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Old Jan 4, 10, 3:13 pm
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Originally Posted by Don'tGoThere View Post
I can't wait to hear what everyone thinks when we start our own B-O-B - no more "meals at mealtime" without paying.
Personally, I'm in favor of BoB in order to add a little variety, choice and quality.

Please note, though, that BoB has hardly proved to be a big success as a revenue generator.
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Old Jan 4, 10, 3:21 pm
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Originally Posted by Don'tGoThere View Post
Interesting PR stunt- 3 major work groups have contracts up for negotiations - if he thinks we don't work hard now, it is going to be a bumpy ride for him going forward.
No question, but this type of gesture is worthwhile and certainly beats what has happened around the industry over the past decade when the line employees were being furloughed, pay was being cut, the companies were losing big bucks, and senior management nevertheless took substantial bonuses.
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Old Jan 4, 10, 3:47 pm
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Originally Posted by channa View Post
If it means that CO can raise the quality of its meals so that they're like what DL, UA, US, etc. sell, then it'll probably be a net positive.

Right now it's turkey dog or nothing. The first time they served me one of those, I knew it was time to go BOB.
I haven't found the BoB meals of these carriers to be appealing in any way. Way overpriced small bready sandwiches or snack boxes. On my NW flights, I can't recall more than a handful of sales.

I'd prefer to see CO raise the bar and go after the VX model. Since LiveTV is going to end up in most of the fleet, and the devices already have credit card readers built-in, I'd rather see them emulate the VX menu (reasonably priced, large portions, healthy options and variety) and sales strategy - tout the goods on the TV screen and allow customers to order for seat-side delivery at any time after the beverage cart finishes its first pass.

They have a built-in marketing device which sits inches away from every customer's face - right now it just endlessly loops a promo for LiveTV. They could leverage unsold screens to tout BoB food, upscale beverages (isn't everyone sick of 'beer, wine and margaritas' by now?) and other services.

I'm open to certain changes - but I still fear Jeff's approach to the problem (extracting more revenue per available seat mile) will be to strip cost out of the product until that side of the equation better reflects the revenue he's accustomed to seeing. The VX approach seeks to enhance the revenue side.

Another option - restrict exit row and bulkhead seats for pre-assignment to CO Plats/Golds/Silvers, then "sell" the unclaimed seats during OLCI for a higher up-charge - and include free LiveTV, a complimentary selection from the BoB menu and EliteAccess for that flight segment. VX extracts a premium of $100 (and ofter much more) for their exit row and bulkhead seats which are nothing more than the same coach seat with a tad more legroom, free BoB food, free TV and reserved overhead space.

That illustrates the difference between those who lead by thinking outside the box (i.e. Gordon) and those who follow by staring at balance sheets and just slashing perceived 'excess' (Anderson, Mullin, etc.)
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