Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek.
Everyone looks forward to their annual bonus.
It's a reflection of a job well done. Or, perhaps, of an extreme ability to tolerate management dysfunction.
Or, perhaps, of an uncanny ability to rise without trace in an organization.
It's a stir that may not have reached many passengers.
It began, you see, with American.
The airline didn't meet its 2018 financial goals. Its bonus scheme is tied to pre-tax profits.
Those pre-tax profits seemed to fall a little short of the bonus-worthy threshold of $3 billion.
(Yes, your baggage fees are merely donations to the collection plate for the end of the year.)
Some inside American, though, were a little taken aback that CEO Doug Parker announced management would still get 51 percent of their performance bonus.
The airline explained that the bonus-level calculation is a little more complicated, involving "pre-tax profits excluding special items, profit sharing, annual incentive programs and related payroll taxes, and company contributions to the 401k."
Please, I have no need or reason to doubt American's sincerity.
Even if, as Forbes reported, these management bonuses didn't sit well with American's pilots.
The pilots professed themselves stunned at what they saw as financial jiggery-pokery designed to pat managers on the back, even when they may not have deserved it.
There's little more painful -- in business, as in life -- than people getting things they don't deserve.
But then I fell upon another headline: United Won't Pay Munoz a Full Bonus.
The Munoz in question was Oscar Munoz, United's CEO.
I was a touch surprised at this headline, as United's numbers are really doing quite well, thank you very much.
Why, then, wouldn't United pay its CEO his full bonus?
The tale is touching, especially for passengers. You see, after the bloody debacle of dragging a paying passenger off a flight, United's board thought it would toss in a bonus kink.
Senior management isn't just graded on the airline's financial performance, but on customer satisfaction.
Yes, really. What you think about the airline can actually affect the senior management's bonuses.
Hark at this from the company's filing:
While progress has been made, the Company had not yet achieved the desired levels of customer satisfaction.
I asked United for some more details. An airline spokesman told me:
United is committed to putting the customer at the center of everything we do and providing a level of service to our customers that makes us a leader in the industry. As part of that effort, and to emphasize that our commitment to the customer is a responsibility at every level of the company -- including those who do not normally interact with customers face-to-face on a daily basis -- a share of the bonus structure for company leadership is tied to our customer satisfaction scores.
I tried to probe further within the airline, as to how big a part of the executives' bonuses (this wasn't just Munoz's bonus being calculated) is tied to customer satisfaction.
I understand it's around the 15 percent mark.
Moreover, the compensation committee has the freedom to look at the airline's own scores and external surveys.
Could it be that your griping on United Airlines surveys has affected the CEO's bonus? You see, United customers, you have more power than you thought.
Readers may feel they're bathing in a large tub of dripping irony here.
Recently, Munoz offered that he didn't see a way to make customers happy because the whole process of airline travel has become so painful.
The struggles of these highly-paid CEOs must make passengers (almost) sympathetic.
Meanwhile, American's Parker has stated that customer service isn't remotely as important as ensuring that planes leave and arrive on time.
Yet American is currently struggling with on-time performance.
This is never solely an airline's fault, yet suing your mechanics can't be helping.
I contacted American to ask for its views and didn't receive a response.
Don Carey, president of American Airlines pilots' union -- the APA -- sniffed pithily to Forbes at the airline's current state:
The real leaders at American Airlines are the frontline employees. Frontline employees can restore American Airlines to being an industry leader [with] customer satisfaction at the top of the industry.
Ah, there's that customer satisfaction thing.
Still, Parker's compensation has its fascinations.
He takes no salary. He's paid entirely in stock. Again, though, the amount and vesting schedule of this stock appears to be granted solely according to financial parameters -- pretax operating margin and shareholder return seem to be the two criteria.
Please, neither of these CEOs is doing badly when it comes to their bank accounts.
Each airline also has its significant problems, ones that won't disappear with the wave of a bonus check.
It's instructive, though, how a bonus scheme that at least acknowledges the need to please customers might, when it comes to an airline, have a material effect.
As well as being a surprise to those very customers, of course.