Judge Nixes $20M Airline CEO Payout
How much is too much for a departing CEO of a bankrupt airline? A federal bankruptcy judge says it would be "inappropriate" to approve a $20 million dollar exit payment to Tom Horton, the outgoing CEO of American Airlines. Judge Sean Lane approved the $11 billion merger of American and US Airways on Wednesday. This clears the way for the two carriers to form the world's biggest airline, with 6,700 daily flights and annual revenue of $40 billion.
The merger, first announced last month, still needs approval from antitrust regulators and US Airways shareholders. It is expected to close by the fall. American has been in bankruptcy protection since November 2011. Horton negotiated his big payout as part of the merger agreement. The judge said the severance package was his "only hang-up" with the merger, and plans to issue a written decision at a later date detailing his reasoning. US Airways CEO Doug Parker, who championed the merger despite Horton's initial resistance, is set to run the combined airline.
CEO pay has soared in recent years. According to a new USA Today analysis of 145 large corporations, the average paycheck for a chief executive last year rose 8 percent from a year earlier to $9.7 million. Executive pay hikes continue as many companies hold down employee wage increases. When things go wrong, however, CEOs can see their compensation cut back. The Wall Street Journal reports Chevron's board has cut pay for its CEO and other top executives following a string of accidents since late 2011. Certain awards "related to stock performance" were cut by 11 percent and bonuses by at least 10 percent for CEO John Watson and several other top Chevron executives, a source told The Journal.
Imagine having no access to your bank account for two weeks because the government ordered a bank closure. That's what happened on Cyprus. This morning the island nation's banks are open again after the longest closure in Europe for decades. Customers now have access to their accounts, but with strict limits on withdrawals. Lines formed at some bank branches which were closed since March 16 while politicians wrangled over how to come up with enough funds to qualify for an international bailout. That agreement was finally reached in Brussels early Monday. Renewed jitters about Europe's debt crisis sent international stock markets lower today.
With the April 15 tax filing deadline approaching the US Justice Department says it has closed more than 30 unscrupulous tax preparers and tax fraud promoters in the last six months. Some charged exorbitant fees others made deceptive loans.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc