A piece of the Profit…Sharing

American’s new profit sharing program will pay out in March based on what we earned in 2016. Now that we’ve shared our earnings for 2016, we know what you’re thinking – how is this going to work and what will my payout be? Let’s take a look.

As Doug shared [LINK], the total cost of profit sharing will be about $314 million dollars, including retirement contributions and payroll taxes. This results in a payout percentage for all team members of approximately 3 percent* of an individual’s eligible earnings.

So, let’s say your eligible earnings were $40,000 – multiply $40,000 by 3 percent to get a payout of $1,200.

*Keep in mind, this is just an estimate. Our team is working to finalize the population’s eligible earnings so that we correctly calculate individual payouts. You will see your final profit sharing amount on the special profit sharing paycheck at the time of payout in March.

What are eligible earnings? Most types of pay are considered eligible earnings, but there are special cases that aren’t included. This list isn’t all inclusive, but it does break down the most common types of pay.

    •  Eligible: o Base pay
    • o Overtime
    • o Shift differentials
    • o Vacation pay
    • o Sick time
    • o License premiums
    •  Ineligible: o Incentive payments (such as Triple Play and bonuses)
    • o Commissions (such as AAdvantage Cash and Barclays Crew Cash)
    • o Previous award payouts (such as previous profit sharing payouts – this will come into play more next year, but a heads up for now)

The best way to estimate your eligible earnings is to look at your year-to-date (YTD) earnings on your last paycheck of 2016. Your YTD earnings will likely be higher than your eligible earnings because your YTD total could include some of the ineligible pay types. But for most people it’ll get you pretty close.

Want more information? Take a look at answers to some of the most frequently asked questions.

1. How many people are included in this profit sharing program? Which workgroups will be included? The majority of mainline employees – more than 100,000 people – as well as employees of PSA, Piedmont and Envoy will be a part of this program. Employees at level 5 and above who participate in other at-risk compensation programs will not be included.

2. Are international employees included?

Yes. All international employees are eligible for the profit sharing plan. Profit sharing payments may be subject to local country rules. Any differences in your country will be communicated locally before the payout.

3. Will the profit sharing payout be the same dollar amount for everyone?

No. The payout will be a percentage of each eligible employee’s 2016 eligible earnings. So, the payout amounts will vary based on differences in eligible earnings.

4. What is included in the profit sharing accrual of $314 million?