Alaska Airlines and Horizon Air 2013 Annual Report Download - page 56

EXECUTIVE COMPENSATION
Meridian as its adviser, the Committee
considered the facts below.
• Meridian does not provide other services
to Alaska Air Group or its subsidiaries.
Meridian’s services are limited to
providing the Committee with advice and
information solely on executive and
director compensation and related
corporate governance matters.
• The amount of fees paid by the Company
during the 12-month period ended
December 31, 2013 represents less
than one percent of Meridian’s total
annual revenues for calendar year 2013.
• Meridian maintains policies designed to
prevent conflicts of interest, which
policies were detailed to the Committee.
• No Meridian partner, consultant or
employee who serves the Committee has
any business or personal relationship
with any member of the Committee.
• No Meridian partner, consultant or
employee who serves the Committee, or
any of their immediate family, owns any
shares of stock of the Company.
• No Meridian partner, consultant or
employee who serves the Committee, or
any of their immediate family, has any
business or personal relationship with
any executive officer of the Company.
How the Elements of Our Executive
Compensation Program Were Selected
The Compensation and Leadership
Development Committee conducts periodic
reviews of the Company’s executive
compensation to ensure that it is structured
to satisfy the Committee’s objectives. The
Committee considers how each component
of compensation motivates executives to
help the Company achieve its performance
goals and execute its strategic plan and how
it promotes retention of executives who
share the Company’s values. The
compensation structure is designed to
promote initiative, resourcefulness and
teamwork by key employees whose
performance and responsibilities directly
affect the performance of the business.
The Committee uses both fixed
compensation and variable performance-
based compensation to achieve a balanced
program that is competitive and provides
appropriate incentives. Base salaries,
benefits, perquisites, retirement benefits,
and change-in-control benefits are intended
to attract and retain highly qualified
executives and are paid out on a short-term
or current basis. Annual incentives and long-
term equity-based incentives are intended to
motivate executives to achieve specific
performance objectives.
The Committee believes that this mix of
short-term and long-term compensation
allows it to achieve dual goals of attracting
and retaining highly qualified executives and
providing meaningful performance incentives
for those executives.
Deterrents to Excessive Risk-Taking
The Compensation and Leadership
Development Committee believes it has
designed the overall compensation program
in such a way as to deter excessive risk-
taking, to encourage executives to focus on
the long-term success of the Company and
to align the interests of executives with
those of stockholders by:
• encompassing several different financial
and operational goals;
• overlapping the performance periods of
awards;
• incorporating short-term and long-term
performance periods of varying lengths;
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