Alaska Airlines and Horizon Air 2014 Annual Report Download - page 28

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL 4
FOR THE FOLLOWING REASONS:
At the Company’s 2014 annual meeting of
stockholders, Mr. Chevedden proposed that the
Board of Directors adopt this policy. The Board of
Directors opposed the proposal last year, and
stockholders rejected the proposal with over 80
percent of the votes cast opposed to it.
The Board maintains that the current leadership
structure best serves the interests of the
Company and its stockholders. The Board’s
leadership structure generally features a
combined chairman and CEO role and a strong,
independent lead director. However, the Board
has discretion to depart from this structure
where circumstances warrant and has done so in
the past. The proponent would eliminate the
Board’s flexibility to combine the chairman and
CEO roles except in “extraordinary
circumstances.” The Board believes that it is not
in the shareholders’ interests to restrict the
Board’s discretion in this respect.
The Board’s existing leadership structure is
effective and appropriately flexible
In the Board’s view, the leadership structure in
which the chairman and CEO roles are combined
serves a number of important goals. A chair/CEO
facilitates the flow of information between
management and the Board, keeps the Board
informed about the Company’s business and the
airline industry, and consults with board
members in a timely manner about important
issues facing the Company. The Board also
believes that the current structure provides
focused leadership for the Company, helps
ensure accountability for the Company’s
performance and promotes a clear, unified vision
for Alaska Air Group by assuring that the
strategies adopted by the Board will be well
positioned for execution by management. The
Board regards this leadership structure as a
strong contributor to the Company’s recent
success.
The Board considers many factors in
determining optimal leadership structure
In choosing to combine the roles of chairman and
CEO, the Board takes into consideration the highly
technical nature of the airline industry and the
complexity and dynamic nature of the Company’s
business and operating environment. In addition,
the Board considers, among other things, the
experience and capacity of the sitting CEO, the
rigor of independent director oversight of financial,
operational and safety regulatory issues, the
current climate of openness between management
and the Board, and the existence of other checks
and balances that help ensure independent
thinking and decision-making by directors.
Restricting Board discretion would be
detrimental to stockholders’ interests
The proposal seeks to mandate one leadership
structure that would apply except in “extraordinary
circumstances.” Because of the presence of the
independence safeguards noted above, the Board
believes it is not only unnecessary, but that it
would be detrimental to restrict the Board’s
leadership structure to one form. The members of
the Board have experience with and knowledge of
the challenges and opportunities the Company
faces at any given time, and therefore they are in
the best position to choose the leadership
structure that is most appropriate for the
situation. The Board’s commitment to select a
leadership structure that is most appropriate for
the Company and its stockholders is best
evidenced by the Board’s decision to separate the
chairman and CEO positions during 2012-2013 in
connection with the transition to a new CEO.
16 PROPOSALS TO BE VOTED ON