Alaska Airlines and Horizon Air 2013 Annual Report Download - page 58

Download and view the complete annual report

Please find page 58 of the 2013 Alaska Airlines and Horizon Air annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 188

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188

EXECUTIVE COMPENSATION
• JetBlue Airways
• Republic Airways Holdings
• SkyWest
• Southwest Airlines
• United Airlines/Continental
• US Airways Group (now trading as
American Airlines Group)
• WestJet
In general, the Company’s executive
compensation program is designed to
provide total direct compensation
opportunities that target the median of the
airline peer group data for named executive
officers.
The Committee chose to include the companies
named above in its peer group for the following
reasons:
• they represent a group of sufficient size
to present a reasonable indicator of
executive compensation levels;
• they are in the airline industry and their
businesses are similar to the Company’s
business;
• the median annual revenue of this group
approximates the Company’s annual
revenue; and
• the Company competes with these peer
companies for talent to fill certain key,
industry-related executive positions.
In preparation for setting 2014 executive
compensation, the Committee began in
2013 to review data not only for the airline
industry, but also for a set of 30 peer
companies in the broader transportation
industry to ensure that the Company’s
executive compensation remains
competitive.
The Application of Internal Equity
Considerations
In addition to benchmarking against an
industry peer group, the Committee and our
CEO believe it is appropriate to consider
other principles of compensation, and not
accept “benchmarking” data as the sole
basis for setting compensation levels. Thus,
while the Committee has considered peer
group data as described above, it has also
applied other compensation principles, most
notably internal equity, when determining
executive compensation. At current levels
and excluding the one-time performance
award in connection with his election in
2012, Mr. Tilden’s total direct compensation
represents approximately two times the
average total direct compensation at the
executive vice president level, and
approximately four times that at the vice
president level. By considering internal
equity, the Committee remains mindful of
the ratio of CEO-to-employee pay and, as a
result, is able to structure executive
compensation in a way that is less
susceptible to sudden, temporary changes
in market compensation levels.
The Use of Tally Sheets
Annually, the Committee reviews tally sheets
that show each element of compensation for
the Named Executive Officers. Base
salaries, incentive plan payments, equity
awards, equity exercises, perquisites, and
health and retirement benefits are included
on tally sheets, which are prepared by the
Company’s corporate affairs and human
resources departments. The Committee has
used the tally sheets to verify that executive
compensation is internally equitable and
proportioned according to the Committee’s
expectations.
ŠProxy
51