SkyWest Airlines 2010 Annual Report Download - page 147

The level of individual goals achieved, and the resulting annual bonus amounts payable to the
Executives for 2010 were as follows:
Average Individual
Individual Goals
Goals Annual
Results Bonus(1)
Objective (Percentage of salary) ..................................... 20.0%
Jerry C. Atkin .................................................. 104.1% 20.8%
Bradford R. Rich ............................................... 102.1% 20.4%
Russell A. Childs ............................................... 100.5% 20.1%
Bradford R. Holt ............................................... 102.0% 20.4%
(1) Individual Goals Annual Bonus = Average Individual Goals Results, multiplied by 20% objective
Discretionary bonus. In addition to the Net Income-based annual bonus and the individual goal
annual bonus, the Committee also exercised discretion in 2010 and paid Bradford R. Holt, President of
Atlantic Southeast and ExpressJet an additional $15,000 as a reward for the successful initial efforts
related to the acquisition of ExpressJet.
Amount of 2010 Annual Bonus—The total annual bonus amounts payable to the Executives for
2010 were: Mr. Atkin—$283,700; Mr. Rich—$205,000; Mr. Childs—$194,300; and Mr. Holt—$153,900.
Those amounts are included in the Summary Compensation Table under the caption heading
‘‘Non-Equity Incentive Plan Compensation’’ and, in the case of the $15,000 discretionary bonus paid to
Mr. Holt, the caption heading ‘‘Bonuses.’’
Long-Term Awards. On an annual basis, Executives are granted discretionary long-term incentive
awards, in the form of stock options (with two-thirds of the options subject to additional performance-
based vesting conditions), restricted stock units (or, from 2006 through 2009, shares of restricted stock),
and performance units payable in cash.
The long-term incentive grants are made to encourage the Executives to continue their
engagement with the Company throughout the vesting periods of the awards and to align management
and shareholder interests. In making awards to the Executives, the grant size and the appropriate
combination of equity-based and deferred cash awards is considered. The Committee generally grants
long-term incentive awards at its first meeting of each year. Except in the case of accelerated vesting
upon a change in control of the Company, long-term incentive awards currently vest only if the
Executive remains employed by the Company for three years from the date of grant. The Committee
believes the three-year cliff-vesting schedule assists in retaining Executives and encourages the
Executives to focus on the Company’s long-term performance.
In granting stock options, restricted stock units and restricted stock to the Executives, the
Committee also considers the impact of the grant on the Company’s financial performance, as
determined in accordance with the requirements of Financial Accounting Standards Board Accounting
Standards Codification Topic 718 (ASC Topic 718). For long-term equity awards, the Company records
expense in accordance with ASC Topic 718. The amount of expense recorded pursuant to ASC Topic
718 may vary from the corresponding compensation value used in determining the amount of the
awards.
Amount and Allocation of Grants—The total annual targeted long-term incentive grant value is
125% of salary and targeted annual bonus for the Chief Executive, and 100% of salary and targeted
annual bonus for the other Executives. These targeted amounts were established to provide a
competitive pay package and to ensure that a large portion of each Executive’s compensation is based
on continuing long-term service and correlated to the creation of shareholder value. This has been the
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