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American Airlines CEO quits on moral grounds

American Airlines, once the largest airline in the United States, declared bankruptcy. This is not surprising news for the beleaguered airline industry; what is different is what is emerging from the wreckage. Gerard J. Arpey, American’s chief executive officer and chairman, resigned and stepped away with no severance package and nearly worthless stock holdings. He split with his employer of 30 years out of a belief that bankruptcy was morally wrong, and that he could not, in good conscience, lead an organization that followed this familiar path.

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Trying to think of the right word for Gerald Arpey’s choice… hmmm… oh yeah… Morals.

Remember when those in power were known for their high moral standards? Remember when the person at the top represented the organizations highest standards of excellence and character.

Maybe we should  get back to that? Maybe we should ask organizations to hire people who will uphold the values of the organization above the profits of the organization?

We should celebrate Mr. Arpey’s choice. He upheld the moral high ground that the company should pay its debtors and retiree benefits while the rest of the board made the immoral decision to file for bankruptcy as an easy way out “because everyone else is doing it.”

I also found it interesting that American Airlines is calling it a retirement while the New York Times is reporting it as resigning because he thought the board was morally wrong. I wonder which is the truth?

Hint: The company who declared bankruptcy in order to get away from paying their debts might just be protecting their behind from Wall Street while the guy who quit because he thought that was wrong is likely telling the truth.

On top of that– Arpey didn’t hold the board hostage by taking a massive golden parachute. (In fairness, I have no doubt that with 30 years of service and having made $14.34 million in the last 5 years, that Mr. Arpey is hitting the bread line any time soon.) He just said… “You know what? If you make this move you are making it without me.”

I like that in a leader. 

By Adam McLane

Adam McLane is a partner at The Youth Cartel, co-author of A Parent's Guide to Understanding Social Media, blogger of 10+ years, and a fan of all things San Diego State University Aztecs.

10 replies on “American Airlines CEO quits on moral grounds”

I read once that the law for publicly held corporations requires them to make the best choices for the stockholder (i.e., value of the stock). So, if a choice is immoral, but technically legal and will help the company’s bottom line, the board and leaders are required to make that immoral choice or face the potential of lawsuits from their shareholders. If that’s true (sorry I don’t have a reference…I know…awful), then we’ve set ourselves up for failure as a society. Our allegiance is to the dollar, to the profit; not to what’s right, good or morally valuable.

Ick. What a depressing comment. Who let that bummer lady in here?

Good for him to take a stand for his character. I’m sure he will be hired by some other big company and make more that at American

Maybe I’m missing something, but if the company was going bankrupt, how did the CEO earn $14.34 million in the last 5 years?  

Great question. Follow that link and you’ll see the details of both what he made and what the company made year to year. (His base salary was a little over $1 million) You’ll also see how he ranked like 478 or something among U.S. CEOs… so I think his salary was actually pretty low compared to people in comparable positions. 

If we had a decent economy where families could afford to take a vacation now and then, American Airlines as well as all of the other airlines  would be very profitable. The lack of demand for airline tickets is the result of a declining middle class that can no longer afford to fly. Now the employees of American will join the downward spiral that they tried to prevent by already making huge concessions in pay and working conditions. I am a retired United Pilot, and I would no longer encourage anyone to seek to join that profession, something that I never thought that I would say.

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