American Posts Former Exec Vasu Raja's Severance Package

13.07.2024 - 14:58 / skift.com / Delta Air Lines / Vasu Raja / United Airlines / Meghna Maharishi

The details are out on former American Airlineschief commercial officer Vasu Raja’s severance package.

Raja will receive his base salary until January 31, 2025 – a total of $462,019 from his exit date in June. Raja earned a base salary of $731,250 in 2023.

The former American executive is also eligible to receive a lump sum payment of $968,750 after his severance period ends, according to a regulatory filing American posted Friday evening. 

Last year, Raja had a pay package of $12.2 million, which includes his salary, bonus and stock awards, according to American’s most recent proxy statement.

Raja, his spouse and children also have unlimited travel privileges during the severance period. As part of these privileges, Raja and his family will have AAdvantage Executive Platinum Status and access to Admirals Club lounges, but only for leisure-travel purposes. The severance agreement states that Raja cannot use American’s flight benefits for any business-related travel. 

Raja, who had long been an influential presence at the airline, left the company in June. His departure happened as American cut its financial outlook for the second quarter, citing weaker pricing power. 

The former CCO heavily championed American’s controversial strategy that included direct selling ticket changes to its distribution systems and emphasizing smaller cities in its network. With those changes, American began losing out on corporate flyers while its rivals have recently enjoyed a resurgence in business travel. 

During Raja’s tenure, American had underperformed compared to rivals Delta Air Lines and United Airlines. Part of the reason for its weaker profits had been its smaller international network amid a boom in demand for long-haul routes to Europe and Asia. 

American is set to report second-quarter earnings July 25. 

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