News and notes from around the interweb:
- American’s CEO Doug Parker is shifting to an all-stock compensation package. That ostensibly ties his income to that of American shareholders (though it potentially also incentivizes a short-term share price focus over longer-term value creation). What I’d like to see: the heads of each airline’s frequent flyer program compensated in miles to better tie their pay to the value of the currency they’re creating…
- Congressman introduces bill to take away badges and police-like uniforms from the TSA. (HT: S.)
- 1000 free Iberia Avios if you have an Android phone.
- 7th Circuit Court of Appeals rules that you cannot bring a European Union EU261 claim against a US airline in a US court.
- Boeing is still losing $30 million per 787 delivery on a fully costed basis.
Your new website is terrible!!! I now just delete your daily emails and have finally unsubscribed. Change isn’t always necessary or a good thing.
What are the tax implications of compensation in miles? It would be interesting to see what value a program head would claim for yhe miles they receive.
As a finance person, you know that paying the head of a frequent flyer program in miles is not an equivalent incentive to Parker’s salary in stock, right? The primary purpose of a for profit company is to generate returns for the shareholders, both short term and long term appreciation and dividends.
The primary purpose of a frequent flyer program is to decreasingly encourage loyalty, monetize a brand, and generate profits for the parent airlines. Your incentive would be same as paying the head of the Fed based on the exchange rate for the US dollar against a basket of other currencies. You would certainly encourage a strong dollar, but at the cost of all the other aspects of the job, including managing inflation, growth, etc.
Lots of other problems, like the first thing a FF head paid in miles would have to do is make the currency freely exchangeable and transferable, otherwise he wouldn’t be able to pay for his mortgage, kids schooling, etc.
Finally, there is the issue of taxes, as Ron points out. Not just income tax, but also payroll taxes, social security, etc.
@George I thought it was obvious this was not a serious suggestion.
I (a liberal Democrat) would normally consider Tom Rooney an a-hole, but on this one issue, he may be right!!!