SkyWest Airlines 2010 Annual Report Download - page 151

providing a means to save for retirement is an essential part of a competitive compensation package
necessary to attract and retain talented executives.
The Company also maintains the SkyWest, Inc. 2002 Deferred Compensation Plan, a non-qualified
deferred compensation plan for the benefit of officers and other highly compensated employees. The
Chief Executive, CFO, and President of SkyWest Airlines participate in the deferred compensation
plan. Atlantic Southeast also maintains a separate but similar non-qualified deferred compensation
plan, the Atlantic Southeast Airlines, Inc. Executive Deferred Compensation Plan, for its highly
compensated management employees, including the President of Atlantic Southeast. Under both such
deferred compensation plans (the ‘‘Deferred Compensation Plans’’), the employer credits each
Executive’s account with a discretionary employer contribution equal to 15% of salary and annual
bonus. These amounts are included in the Summary Compensation Table under the column ‘‘All Other
Compensation’’. Additional information on the Deferred Compensation Plans is found in the section
‘‘Non Qualified Deferred Compensation for 2010,’’ below.
The SkyWest Inc. 2002 Deferred Compensation Plan (but not the Atlantic Southeast Airlines, Inc.
Executive Deferred Compensation Plan) also permits eligible executives, including the Executives, to
elect in advance of each calendar year to defer up to 100% of their cash salary and annual bonus
compensation for the year. None of the Executives elected to defer any portion of their salary or
annual bonus, The Company and its subsidiaries do not maintain any defined benefit pension plans for
the Executives.
Other Benefits. In additional to the benefits described above, the Company provides certain other
benefits to the Executives that the Committee believes are generally consistent with the benefits
provided to senior executives of other airlines. The Committee believes that those benefits, which are
detailed in the footnotes to the Summary Compensation Table applicable to the heading ‘‘All Other
Compensation’’ below, are reasonable, competitive and consistent with overall executive compensation
objectives. Those benefits consist primarily of employer-paid premiums on health, dental and eye
insurance, a personal automobile allowance, and use of Company owned recreational equipment. The
Company does not provide Executives with a ‘‘tax gross-up’’ payment with respect to such other
benefits.
The Company and its subsidiaries also maintain a non-discriminatory, broad based program under
which all full-time employees and their dependents, including the Executives and their dependents, may
fly without charge on a space available basis on regularly scheduled flights of aircraft operated by the
Company’s operating airline subsidiaries.
Ownership Guidelines
The Company maintains ownership guidelines for the Executives to encourage the alignment of
their interests with the long-term interests of the s shareholders. Each Executive is required to maintain
a minimum ownership interest in the Company. The guideline ownership level is a number of shares of
Common Stock having a value equal to five times base salary for the Chief Executive, and three times
base salary for the CFO and the Presidents of SkyWest Airlines and Atlantic Southeast. The Chief
Executive and the CFO meet the guidelines. The Presidents of the operating subsidiaries have been in
their positions for only a few years, and the Committee believes they are making progress towards the
ownership guideline each year. The holdings of the Executives are summarized in the Security
Ownership Table, below.
Deductibility of Executive Compensation
Section 162(m) of the Code imposes a $1 million annual limit on the amount that a publicly-traded
company may deduct for compensation paid to the company’s principal executive officer during a tax
year or to any of the company’s three other most highly compensated executive officers who are still
29