AA’s variable compensation plans are designed to reward employees when the company achieves customer experience, dependability and financial goals.  In the 2003 restructuring, three variable compensation plans were established: the Profit Sharing Plan, the Annual Incentive Plan (AIP) and the Broad Based Employee Stock Option Plan.  Together they form the building blocks necessary to ensure that employees throughout the American Airlines team are able to share in the company's success.

Other airlines have profit sharing programs with different targets and payment mechanisms. The following compares AA’s total compensation and variable compensation with other airlines.  Data for these comparisons are based on actual 2007 revenue and estimates of mainline salaries and benefits from earnings releases.

• American's employees during 2003 restructuring, elected to keep more of their compensation in the form of base pay – in effect, “guaranteeing” a larger percentage of their compensation through wages and benefits. Employees at competitors took far greater wage cuts, putting a more significant percentage of each employee’s compensation “at risk” in the form of variable compensation programs, such as profit sharing.

• By working with its employee groups, American has been able to maintain many of the benefits employees value most, including defined benefit pension plans and retiree medical benefits that American’s competitors have abandoned or frozen.

• American is proud to offer its employees among the industry’s best compensation and benefits packages, including the most secure and well-funded pension plans. When comparing AA’s base pay, benefits and variable compensation to that of its competitors, AA employees fare very well and are at or near the top of the industry.

• American's total compensation per full-time employee, including salary, benefits and variable compensation, exceeds that of Continental, US Airways, United and Northwest at all pre-tax profit margin levels.

• Of American's primary competitors, only Southwest exceeds American's average total compensation per employee. This is largely attributable to Southwest's higher productivity performance across all workgroups and operations.

• As measured by payout per full-time employee, American's variable compensation programs are comparable to similar programs at other airlines: Continental, US Airways, Delta, United and Northwest. The chart below summarizes the potential pay-outs per employee depending on each airlines’ actual pre-tax margins.
  

• Even factoring in profit sharing payments at other airlines, AA employees are compensated the highest among legacy airlines at all pre-tax profit margin levels.