No coal in this CEO's stocking
Gerard J. Arpey is not heading for the breadline, not by any stretch. The man who just departed as American Airlines' CEO and chairman, as the company declared bankruptcy, has landed a nice berth as a partner of some Texas private equity outfit. He has also, over his nearly 30 years at American, cashed in millions of dollars' worth of stock options. He is a one percenter -– but with an asterisk.
He left without the platinum parachute that's become the standard for CEOs on their way out the door -– no cash severance package, and stock options worth about as much as Civil War "shinplaster" currency. Still, he's got that free American ticket for life -- or for as long as American stays in the air.
None of that averts the lousy prospects for American and the employees Arpey left behind to face bankruptcy, in hopes of coming out more profitable on the other side -- at what other costs remains to be seen.
American employees may find their company pension program surrendered to a federal program of last resort, one that doesn't always pay as much as the corporate pension had promised employees -- some of whom have been there as long as Arpey, working just as hard for a lot less.
What distinguished Arpey is how he left his lifelong company:
First, that it actually was his lifelong company, at a time when so many execs hop promiscuously from firm to firm, for the sake of snowballing bigger paychecks and benefits.
Second, that he balked at bankruptcy as a moral matter, a rupture of the relationship between company and employees.
D. Michael Lindsay, the president of Gordon College, had interviewed hundreds of business execs, including Arpey, and in Lindsay's Op-Ed piece for that other Times newspaper, the one on the East Coast, here's what Arpey had to say:
I believe it's important to the character of the company and its ultimate long-term success to do your very best to honor those commitments. It is not good thinking -- either at the corporate level or at the personal level -- to believe you can simply walk away from your circumstances.
Other airlines declared bankruptcy and did all right because of it, resetting their fiscal clocks. American was the only major airline to post a net loss last year, which clearly precipitated bankruptcy.
But here's what Arpey said about that: "Our bankrupt colleagues all made net profits, good net profits last year, and we didn't. And you can mathematically pinpoint that to termination of pensions, termination of retiree medical benefits, changes of work rules, changes in the labor contracts. That puts a lot of pressure on our company, not to be ignored."
What's dispiriting is how we now have to grade CEOs on a curve, so that Arpey should be all alone in claiming this moral turf. News is always the singular -– what's different and unusual, not what's ordinary. Arpey's scruples should be the industry standard among CEOs. The fact that they aren't -- well, good for Arpey but not good for the corporate culture.
Thomas Jefferson, nearly 300 years ago, envisioned the culture of outsourcing and downsizing and the disconnect between business and domestic economy when he wrote in a March 1814 letter, "… merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains."
So for the nation's less simpatico chief executives, who don't see a connection between themselves and their business and employees, only one question remains, and on the verge of Christmas, I'll put that to them:
What'll it be in your stocking? Bituminous, or anthracite?
Photo: Gerard J. Arpey speaking after a shareholders meeting in Fort Worth, Texas in 2004. Credit: Bill Janscha / Fort Worth Star-Telegram