Former AMR CEO: "I Should Have Looted Pensions"

04.01.06 'Special' Edition: Former AMR (American Airlines) CEO Don Carty recently expressed regrets for his tenure at the company.

First, a little history: Carty's term as CEO saw the airline stumble and shrink in every measure -- except compensation to Carty. He drew record pay, and coupled that with a clandestine pension deal he was nearly able to keep secret. Discovery of the secret pension -- immediately after Carty staked his honor on a denial -- caused even AMR's somnolent board to wake up and boot him.

With, of course, his massive pension intact.

"I'm really ashamed and embarrassed. Last week I bumped into [United CEO] Glenn Tilton at Lowe's where we were both trying to get solid gold sinks for our new garages. Tilton recognized me right away, which was gratifying, but then he immediately started taunting me."

What about?

"The pensions. I thought I was being pretty slick by setting up a clandestine, bankruptcy-proof irrevocable pension that pays me millions, all in secret. Unfortunately those darned accountants put it in an SEC filing, and those dimbulbs at the government put it on the net right when I was swearing on my personal honor that I hadn't done anything like that."

He snickered and repeated, "Personal honor!" before resuming.

"Yeah, I thought it was slick, but Tilton not only did the secure-pension-for-me-not-for-thee deal, he also managed to erase the employee-shareholder equity and most of the employee pension fund -- and wind up with the money in his own hip pocket."

"I'm so embarrassed. I should have looted the pensions, too. I left money on the table, which is the ultimate no-no for a modern airline CEO. I'll never hear the end of this now. Monte Carlo, Gstaad, Rio, Aspen. It follows me everywhere. Hey, I have to salute Tilton's $40 million scam, but shouldn't I get credit as a pioneer? Before me, people had the insane idea that CEO compensation should be tied to company performance. Company performance! That's like saying no-account nothings like customers and stockholders mean something. What a stupid idea!"

In a related story: The cadaverous Carty is often believed to be the model for Charles Montgomery "Monty" Burns, "Mr. Burns" from the "Simpsons" animated cartoon. The physical resemblance is strong -- but Carty denied it, through spokesman Waylon D. Smithers.

Carty continues to move forward. "I've kept my hand in by looting Hawaiian Airlines," where he's on the board, he said, "and I'll be keeping that position because they're not quite cleaned out yet."

"I took the job with Virgin America because here was an airline that nobody had wrecked yet. Virgin, you could say. Ha hah. Get it, virgin? I mean, all those pilots, mechanics and flight attendants are gonna think they have pension equity building -- and they'll be right. But it'll be in my account." 

Carty put his fingertips together for a moment. "Excellent," he said, his eyes unfocused. "Excellent."

"Besides, retirement was getting to me," he said. "You can only pull the wings off so many flies and squirt flaming lighter fluid on so many frogs before you need that, you know, interaction with people."

FMI: www.bop.gov