posts profit in 4th quarter
American Airlines made a profit in the fourth quarter, a big turnaround from a year ago, as it slashed labor costs and reaped other benefits from its trip to bankruptcy court. Parent company AMR Corp. said Wednesday that net income was $262 million compared with a loss of $1.1 billion in the fourth quarter of 2011.
Labor was AMR’s second-biggest expense behind only fuel. The company chopped spending on wages and benefits by 13 percent as it eliminated thousands of jobs and reworked its union contracts.
The fourth-quarter profit, even one earned with the benefit of one-time gains, comes as AMR continues to study whether it should merge with US Airways Group Inc. or exit bankruptcy on its own. CEO Thomas Horton has promised a decision within weeks. Associated Press
JPMorgan cuts CEO Dimon’s pay in half
JPMorgan Chase & Co. CEO Jamie Dimon had his pay cut in half after the lender concluded reviews of an investment unit’s trading losses by finding he bears responsibility for the blunders.
Dimon’s compensation for 2012 was $11.5 million, compared with $23 million a year earlier, the New York-based bank said Wednesday on its website. His $1.5 million salary went unchanged while incentive awards fell to $10 million, all in restricted shares that vest over three years, from $21.5 million.
JPMorgan is seeking to rebuild investor trust after losing more than $6.2 billion in the first nine months of 2012 on bets by British trader Bruno Iksil.
“Mr. Dimon bears ultimate responsibility for the failures that led to the losses in (the chief investment office) and has accepted responsibility,” the bank said after spending about eight months reviewing what Dimon has called “egregious mistakes” at the CIO.
The loss at JPMorgan spurred lawmakers to attempt to tighten trading curbs included in the 2010 Dodd-Frank Act. Bloomberg News
Goldman, Morgan Stanley to pay over foreclosures
Goldman Sachs and Morgan Stanley will pay a combined $557 million to settle federal complaints that they wrongfully foreclosed on homeowners who should have been allowed to stay in their homes.
The agreements announced Wednesday with the Federal Reserve were similar to deals struck earlier this month with 10 other major banks and mortgage lenders.
The settlements could compensate hundreds of thousands of Americans whose homes were seized because of abuses such as “robo-signing,” when banks automatically signed off on foreclosures without properly reviewing documents.
About 220,000 people whose homes were in foreclosure in 2009 and 2010 are eligible for payments under the deal with the two banks, the Fed said. The payments could range from hundreds of dollars up to $125,000. Associated Press
Business CEOs call for raising retirement age
An influential group of business CEOs is pushing a plan to gradually increase the full retirement age to 70 for both Social Security and Medicare and to partially privatize the health insurance program for older Americans.
The Business Roundtable’s plan would protect those 55 and older from cuts, but younger workers would face significant changes. The plan would result in smaller annual benefit increases for all Social Security recipients.
The business leaders will be meeting with members of Congress and the administration to press them to enact their plan. Associated Press