American CEO Turns Down Big Raise

Thanks, but no thanks. That's the message from AMR Corp's CEO Gerald Arpey to his board of directors. He doesn't want a 22-percent pay raise.

Even as passenger traffic continues to rise and airlines slowly emerge from a worldwide depression, AMR's board offered Arpey a $110,000 raise. But it's a sign of the times that, even with the raise, Arpey would have been making about $200,000 less than his predecessor, the controversial Don Carty.

Arpey's decision not to take the pay hike might stand him in good stead with American Airlines employees, who gave back $1.8 billion in concessions last year. Later that same day, they found out Carty and other top managers had a secret pension fund that was bankruptcy-proof. Carty quit in disgrace shortly thereafter.

With that in mind, Arpey reportedly decided it just wouldn't be politic to take that big raise -- especially when the airline itself continues to struggle.

"From a personal standpoint, he thought the timing wasn't right," said AMR spokesman Roger Frizzell. "He's leaving money on the table every month."

But that could change. The skies could part, American might pull out of its financial mire and Arpey could decide he wants that raise after all.

"I call it good leadership," said APA spokesman Denny Breslin.

FMI: www.amrcorp.com