SkyWest Airlines 2009 Annual Report Download - page 129

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future. F. W. Cook did not provide any non-executive compensation consulting services to the Company
or the Compensation Committee during 2009. The Compensation Committee has sole authority to hire
and fire outside compensation consultants. To the extent the Compensation Committee has historically
engaged compensation consultants; the principal role of the compensation consultant has been to assist
the Compensation Committee in analyzing executive pay packages or contracts and assessing the
application of the Company’s financial measures to the Company’s executive compensation practices.
No Employment and Severance Agreements. The Named Executives do not have employment,
severance or change-in-control agreements, although unvested options and restricted stock may become
vested upon a change in control of the Company. The Named Executives serve at the will of the
Company’s Board of Directors, which enables the Company to terminate the employment of any
Named Executive with discretion as to the terms of any severance. This is consistent with the
Company’s performance-based employment and compensation philosophy.
Elements of Compensation
The Company’s executive compensation objectives and principles are implemented through the use
of the following principal elements of compensation, each discussed more fully below:
• Salary
• Annual Bonus
• Long-Term Awards
The Company also provides retirement benefits and other benefits, which are discussed below in
greater detail.
Salary. Salary is provided with the objective of paying for the underlying role and responsibility
associated with the executive’s position, which the Compensation Committee believes allows the
Company to attract and retain qualified executives. The Named Executives’ salaries are set at levels
that the Compensation Committee believes are generally competitive with the compensation paid to
officers in similar positions at other airlines of similar size. Salary adjustments are considered annually
and influenced by growth of the Company’s operations, individual performance, changes in
responsibility, changes in cost of living and other factors the Compensation Committee considers
relevant.
The salaries of the Named Executives are set forth in the Summary Compensation Table set forth
immediately following this section.
Annual Bonus. In an effort to encourage achievement of the Company’s performance objectives,
the Company maintains an annual performance-based bonus plan for the Named Executives. The
purpose of the Company’s bonus plan is to reward the Named Executives with an annual cash bonus in
an amount that correlates in substantial part to the net income results of the Company or its operating
subsidiaries for the year in question. The Compensation Committee believes net income is a key
measure of the financial health of the Company, and reflects the Company’s development of
shareholder value.
The amount of the annual bonus payable to executive officers for a particular fiscal year is
determined by the Compensation Committee at its first meeting following the Company’s fiscal
year-end. Once the Compensation Committee has determined the amount of annual bonus payments,
the bonuses are generally paid shortly thereafter.
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