Alaska Airlines and Horizon Air 2009 Annual Report Download - page 56
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The Committee believes that 25th percentile
base salary levels for the other Named
Executive Officers, with the opportunity to
earn market-level compensation through
short- and long-term incentive plans that pay
when performance objectives are met, are
appropriate. With respect to 2009
compensation, the base salary levels of the
other Named Executive Officers averaged in
the 25th percentile when last reviewed.
Performance-Based Annual Pay
The Company’s Named Executive Officers
are eligible to earn annual incentive pay
under the Performance-Based Pay plan,
which is intended to motivate the executives
to achieve specific Company goals. The
majority of the Company’s employees now
participate in the Performance-Based Pay
plan. The Committee aligns executive
compensation with the Company’s strategic
plan by choosing a target level performance
for the Performance-Based Pay plan that is
consistent with the Company’s strategic
plan goals.
Each participant in the Performance-Based
Pay plan is assigned a target participation
level, expressed as a percentage of the
participant’s base salary. For the Named
Executive Officers, the 2009 target
participation levels are as follows:
Performance-Based Pay Plan Participation
Name
Target Participation
as % of Base Salary
William S. Ayer 100%
Bradley D. Tilden 75%
Glenn S. Johnson 75%
Benito Minicucci 75%
Jeffrey D. Pinneo 75%
Incentive award payments may range from zero to 200% of the Named Executive Officers’
target based on the achievement of the objective performance standards set by the
Compensation Committee at the beginning of each year. For 2009, the Performance-Based
Pay Plan metrics were set as follows:
Performance-Based Pay Metrics
Goal Weight
Threshold Target Maximum
Alaska Horizon Alaska Horizon Alaska Horizon
Operational Performance
• Safety lost-time injuries per
100 full-time employees
10% 4.44
or fewer
3.69
or fewer
4.22
or fewer
3.51
or fewer
4.00
or fewer
3.32
or fewer
• Employee Engagement (as
measured by the number of
months we exceed our
monthly customer
satisfaction goal)
10% 3 months 6 months 9 months
• CASM ex fuel and special
items (cost per available
seat mile)
10% 8.10¢ 15.34¢ 8.00¢ 15.14¢ 7.80¢ 14.84¢
AAG Profitability
Adjusted Pre-tax Profit 70% $75 million $100 million $200 million
40