Alaska Airlines and Horizon Air 2013 Annual Report Download - page 59

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EXECUTIVE COMPENSATION
The Use of Performance Measures
The Committee uses objective performance
goals in the Performance-Based Pay Plan
(annual cash incentive plan). The Committee
also applies performance measures as a
basis for determining a significant
percentage of long-term equity awards.
Annual incentives and long-term incentives
are intended to motivate executives to
achieve superior performance levels by
setting goals that are tied to the Company’s
strategic plan and by linking executives’
compensation to long-term stockholder gain.
All employee groups at the Company
participated in the Performance-Based Pay
Plan during 2013. The Committee believes
that tying incentive pay to shared
performance targets motivates all
employees across the Company to achieve
the same goals.
Current Executive Pay Elements
Base Pay
In general, for the Named Executive Officers,
the Committee targets base salary levels at
the 25th percentile based on peer group
data identified in the review described in
this discussion. For other vice president-
level executives, the Committee targets
base salary levels between the 25th and 50th
percentiles.
The Committee assesses each executive’s
duties and scope of responsibilities, past
performance and expected future
contributions to the Company, the market
demand for the individual’s skills, the
individual’s influence on long-term Company
strategies and success, the individual’s
leadership performance, and internal equity
considerations.
In February 2013, the Committee approved
base salary of $425,000 for Mr. Tilden,
which was unchanged from 2012 and was
below the 25th percentile of salaries for
CEOs in the peer group. The chart below
depicts CEO base salaries at airline peer
group companies.
CEO Base Salary Comparisons
(Airline Peer Group)
2013 Base Salary(1)
Alaska Air Group, Inc. $ 425,000
Base Salary (Air Group peers)
Air Canada $1,400,000
United Continental
Holdings, Inc. $ 975,000
Delta Air Lines Inc. $ 652,083
75th Percentile $ 652,083
Southwest Airlines Co. $ 675,000
Hawaiian Holdings, Inc. $ 602,178
AMR Corp. $ 618,135
Median $ 600,000
JetBlue Airways Corp. $ 600,000
WestJet Airlines, Ltd.(2) $ 567,000
US Airways Group, Inc. $ 550,000
Spirit Airlines, Inc. $ 470,000
25th Percentile $ 470,000
Republic Airways Holdings
Inc. $ 450,000
SkyWest Inc. $ 400,000
Allegiant Travel Co.(3) $ N/A
(1) Amounts are derived from the most recent
compensation data available as of the date of
this Proxy Statement. In most cases, this is the
2012 base salary as reported in the respective
company’s 2013 proxy statement.
(2) Base salary is provided in Canadian Dollars.
(3) Allegiant’s CEO does not receive a base salary.
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 executives
52