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December 09, 2013

Former AMR CEO Horton receives compensation worth close to $17 million

American Airlines former chief executive Tom Horton will receive almost $17 million in cash and stock compensation for guiding the carrier through its two-year bankruptcy.

According to a Securities and Exchange Commission filing made on Monday afternoon, Horton will receive $12.7 million in cash payments and 170,722 shares in the new company. Based on Monday's stock closing price of $24.60, the stock is worth $4.2 million.

Horton will also receive lifetime flight and travel benefits for himself and his wife. He will also be provided an office and office support for the next two years.

Here's what the filing said:

"In recognition of Mr. Horton’s role in the financial performance of the Company during 2013, the success and completion of AMR Corporation’s financial restructuring and emergence from bankruptcy, and the completion of the Merger, as well as compensatory arrangements with other Company executives, on December 9, 2013 the Company entered into a transition agreement with Mr. Horton (the “Transition Agreement”) providing for certain payments and benefits as Mr. Horton transitions from his role as president and chief executive officer to serving solely as the chairman of the Company’s board of directors. Pursuant to the Transition Agreement, Mr. Horton will receive (i) a cash payment equal to $5,411,772, (ii) an “alignment award” that, consistent with similar awards provided to Company executives, is intended to approximate the unvested in-the-money equity value and cash long term incentive plan expectation of a similarly-situated US Airways executive, payable in cash equal to $6,510,150 and (iii) eligibility to receive a performance bonus under the Company’s 2013 Short-Term Incentive Plan in an amount targeted at $795,849, with a maximum opportunity equal to $1,273,358. In addition, the Company granted Mr. Horton a fully-vested restricted stock unit award covering 170,722 shares of the Company’s common stock, equal to the number of shares granted to US Airways Group’s CEO for 2013. Mr. Horton will also be reimbursed for his legal fees incurred in connection with the Transition Agreement and any other prior merger-related agreements. In addition, Mr. Horton and his wife will continue to receive lifetime flight and other travel privileges, as will his eligible dependents for as long as they remain eligible dependents. Mr. Horton will be provided an office and office support for a period of two years after the closing of the Merger."

Horton's compensation was a subject of much debate in the bankruptcy court. In the intial merger agreement, Horton was to receive $19.8 million in compensation with $9,937,500 in cash and $9,937,500 in shares of the new company.

However, the bankruptcy trustee filed several objections to the compensation payment saying it did not conform to the bankruptcy code. In September, U.S. bankruptcy judge Sean Lane did not approve Horton's executive compensation although he approved the merger and restructuring plan submitted by AMR to the court.

-Andrea Ahles

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Comments

Del Daldottoo

Wow! Tom Horton assumes control of AMR and is out foxed by the TWU/APA/AFPA and 24 months loses control of AMR and as a reward gets $17 million?

That shows what a little bit of hard work and determination pays off in the end!

Is this a great country or what?!?

AATHUNDER

It looks like Horton got 100 times more than he should have. Yeah the Unions did a great job! Then they agreed to a gag order for its members.

forlorn hope

As long as he crawls back under his rock, I don't care. Bob Crandall took several swipes at the AA "old guard" and that was worth at least a million.

RL

Worth absolutely every penny PAID TO him to get rid of him!

whitey

yes sir. and I,m glad he did.there will never be another bob Crandall.i was proud to work for aa when he was there.after that the Canadian crook tried to run and take the money just like all Canadians are known for.then came arpey the other outlaw followed by the idiot Horton yet another crook.i think mr parker will fix this problem.mr parker fire the rest of the aa management please.

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