Alaska Airlines and Horizon Air 2013 Annual Report Download - page 81

EXECUTIVE COMPENSATION
Change in Control
Cash
Severance(3)
Enhanced
Retirement
Benefit(4)
Benefit
Contin-
uation(5)
Lifetime
Airfare
Benefit(1)
Equity
Acceleration(2)
Excise
Tax(6)
Cutback
Due to
Modified
Cap Total
Bradley D. Tilden $3,214,727 $393,149 $189,135 $14,940 $7,336,920 $ 0 $ 0 $11,148,871
Brandon S. Pedersen $1,947,582 $106,858 $169,110 $13,781 $2,703,435 -$604,000 $ 0 $ 4,336,766
Glenn S. Johnson $2,154,001 $257,744 $187,512 $12,206 $3,232,598 $ 0 $ 0 $ 5,844,061
Benito Minicucci $2,163,588 $138,276 $169,247 $ 0 $3,567,433 $ 0 $ 0 $ 6,038,544
Keith Loveless $2,067,720 $288,721 $163,440 $10,540 $2,760,131 $ 0 -$30,649 $ 5,259,903
(1) All employees who retire with more than ten years of service are entitled to flight benefits on Alaska Airlines
and Horizon Air. Flight benefits for the Named Executive Officers are for positive-space travel, for which the
Company also provides a tax reimbursement. Messrs. Tilden, Pedersen, Johnson and Loveless qualify for
these benefits under all termination scenarios. In this column, we show the present value of this benefit,
calculated using a discount rate and mortality table that are the same as those used for our pension plan
accounting under ASC 715-20 as of December 31, 2013, described above in the section titled Pension and
Other Retirement Benefits. Other assumptions include that the lifetime average annual usage is equal to
actual average annual usage amounts in 2011 through 2013, and that the annual value of the benefit is equal
to the annual incremental cost to the Company, which will be the same as the average of the incremental cost
incurred to provide air travel benefits to the executive in those years as disclosed under All Other
Compensation in the Summary Compensation Table.
(2) Represents the “in-the-money” value of unvested stock options and the face value of unvested restricted stock
and performance stock unit awards that would vest upon termination of employment in the circumstances
described above based on a stock price of $73.37. The value of the extended term of the options is not
reflected in the table because we have assumed that the executive’s outstanding stock options would be
assumed by the acquiring company pursuant to a change in control.
(3) Represents the amount obtained by multiplying three by the sum of the executive’s highest rate of base salary
during the preceding 12 months and the higher of the executive’s target incentive or his average incentive for
the three preceding years.
(4) Represents the sum of (a) the matching contribution the executive would have received under our qualified
defined contribution plan had the executive continued to contribute the maximum allowable amount during the
employment period, and (b) the contribution the executive would have received under our nonqualified defined
contribution plan had the executive continued to participate in the plan during the employment period.
(5) Represents the estimated cost of (a) 18 months of premiums under our medical, dental and vision programs,
and (b) three years of continued participation in life, disability, accidental death insurance and other fringe
benefit programs.
(6) In the hypothetical example above, the best after-tax arrangement results in Mr. Pedersen paying $604,000 in
excise tax and in reducing Mr. Loveless’s benefit by $30,649.
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