American Air Leaders Bet $2.4 Million on Shares After 2019 Rout
(Bloomberg) -- American Airlines Group Inc.’s top six executives purchased an extra 85,000 shares, paying a combined $2.37 million after the company posted this year’s biggest drop among major U.S. carriers.
Chief Executive Officer Doug Parker paid $1.4 million for 50,000 shares, while President Robert Isom bought 15,000 at a cost of $416,250, according to regulatory filings Tuesday. The four remaining executives, including Chief Financial Officer Derek Kerr, took 5,000 each for as much as $138,800.
“These share purchases are not part of our compensation package,” the executives said in a message to employees. “They were purchased solely because of the value we see in American today and over time.”
The purchases were the first such coordinated action by American’s top executives, said spokesman Matt Miller. Parker chose in 2015 to give up the cash portion of his compensation and be paid only in stock. The shares have dropped 43% since then, and the CEO has repeatedly said American is undervalued. His latest open-market purchase was the biggest for an insider at the carrier in at least 10 years, according to data compiled by Bloomberg.
The shares surged 7.1% to $29.12 at the close in New York, the biggest gain in five months. That pared this year’s loss to 9.3%, which is still the worst on a Standard & Poor’s index of the five largest U.S. carriers.
American is among U.S. carriers being affected by the grounding of Boeing Co.’s 737 Max, with 24 of the aircraft that have been parked since March. The Fort Worth, Texas-based airline is currently seeking a court order to stop an alleged work slowdown by mechanics.
©2019 Bloomberg L.P.