Summary
- American Airlines CEO Robert Isom openly explained his salary at a staff meeting.
- Isom claims his salary is in line with industry standards, despite flight attendants preparing to strike.
- The executive emphasizes that his pay depends on the airline’s success and that flight attendants are a priority.
American Airlines CEO Robert Isom recently became transparent about his compensation package of nearly $32 million last year at a companywide meeting. The executive’s salary was reportedly unveiled just days before American’s 2023 earnings call, which took place on Thursday.
While Isom explained that he is “compensated the most,” he also asserted that his salary is “consistent with what other CEOs make.” It comes as American’s flight attendants are preparing to strike after fighting for pay raises and retro pay, as they have been without a new collective bargaining agreement for years.
“It’s probably not a surprise”
According to an exclusive View From The Wing report, Isom made $31.4 million in 2023.
Photo: American Airlines
At the carrier’s earnings call, referred to internally as the “State of the Airline,” the CEO explained his salary and said he is paid less than the executives at both of its US legacy competitors, Delta Air Lines, and United Airlines.
“As the CEO it’s probably not a surprise, but I’m compensated the most… I just want to cover this real quick… [our] proxy this year basically says that I am paid a significant amount of money, but compensation that is consistent with what my peers are. I’m paid on a go-forward basis, I’m paid less than Ed Bastian at Delta by a considerable amount, and I’m paid less than Scott Kirby at United.”
Two years as CEO
Isom succeeded Doug Parker as CEO in 2022. Before taking on as head of American, he served as the airline’s president for six years. Isom went on to explain that he has not received additional compensation since becoming CEO. Additionally, he said that most of his salary, which is “paid out into the future,”“is 90% at risk” because it depends on the carrier’s performance.
“If I do not do what I have set up to do and what the board and the company has asked me to, I don’t receive that compensation,” the executive stated.
Photo: American Airlines
According to View From The Wing, Isom’s base pay doubled when he was appointed CEO two years ago. Contrary to his statement, it is alleged that he did receive a pay increase since then, although it was delayed due to restrictions implemented in exchange for taxpayer cash of $10 billion given to American during the pandemic.
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Isom concluded by maintaining that his pay is similar to the salary of other CEOs.
“So I’m not doing anything other than telling you up front that’s what it’s about. And I just want to make clear with folks that’s not something I shy away from. It’s compensation that’s consistent with what other CEOs make.”
Flight attendants preparing to take action
Amid Isom’s spotlight on compensation, he was also put in the hot seat regarding American’s lengthy negotiation process with its flight attendants’ union – the Association of Professional Flight Attendants (APFA) – for a new contract. During a question-and-answer session at the earnings call, APFA’s President Julie Hedrick said the flight attendants “are ready to strike.”
Isom fought back, saying he wants flight attendants to receive the best pay in the industry.
“I want to pay them at the best in the industry. And right now every offer that we put on the table for our pilots, for our dispatchers, for our agents, has been consistent with that philosophy. […] We are using that absolute same philosophy with our flight attendants. And we have to – we have to be fair across the entire company, we have to be consistent with what we do.”
Last week, the Fort Worth, Texas-based airline reported a loss of $312 million in the first quarter of this year. United also lost money due to the grounding of the Boeing 737 MAX 9, but Delta posted strong earnings despite Q1 typically being the most challenging quarter across the industry. The Atlanta-based carrier announced on April 22nd that it would increase pay by 5% for non-union workers and a new minimum wage of $19 per hour.
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