National/World

Justice Department: AA CEO $20M severance 'too big'

Monday, May 27, 2013
American Airlines and AMR Corporation, Chairman, President and CEO Thomas Horton, reacts as he testifies on Capitol Hill in Washington, Tuesday, March 19, 2013. before the Senate subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on The American Airlines/US Airways Merger: Consolidation, Competition, and Consumers.

American Airlines and AMR Corporation, Chairman, President and CEO Thomas Horton, reacts as he testifies on Capitol Hill in Washington, Tuesday, March 19, 2013. before the Senate subcommittee on Antitrust, Competition Policy and Consumer Rights hearing on "The American Airlines/US Airways Merger: Consolidation, Competition, and Consumers". (AP Photo / AP Photo/Manuel Balce Ceneta)

The Justice Department says a proposed $20 million severance payment for the CEO of American Airlines is too big and should be rejected.

The proposed merger of US Airways Group Inc. and American calls for American's current CEO Tom Horton to lose that job and become chairman. American has proposed severance pay of almost $20 million, along with lifetime flight benefits.

The objection filed Friday by the U.S. trustee's office says American's bankruptcy plan does not explain why he should get so much money. The objection says Horton's contract calls for him to get $6.4 million if he had left at the end of last year, and raises the question of why he should get so much more money now.

The case is in federal bankruptcy court in New York.

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