SkyWest Airlines 2010 Annual Report Download - page 164

Download and view the complete annual report

Please find page 164 of the 2010 SkyWest Airlines annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 176

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176

PROPOSAL 3
ADVISORY VOTE ON THE FREQUENCY OF
FUTURE VOTES ON EXECUTIVE COMPENSATION
Background
Section 14A also provides that the Company’s shareholders must be given the opportunity to vote
on an advisory (non-binding) basis for their preference as to how frequently the Company should
consider future Say-on-Pay proposals at its annual meetings of shareholders (referred to as a
‘‘Say-on-Frequency’’ vote). This Proposal 3 gives the Company’s shareholders the opportunity to
indicate whether they would prefer that the Company’s shareholders address future Say-on-Pay
proposals once every one, two, or three years. Shareholders also may, if they wish, abstain from casting
a vote on this proposal.
The Board values dialogue with its shareholders on executive compensation and other important
corporate governance matters. The Board believes that addressing a Say-on-Pay proposal in the
Company’s annual meeting once every three years will achieve an appropriate balance between
fostering such dialogue and affording sufficient time to evaluate the merits of the Company’s overall
compensation philosophy, policies and practices in the context of the Company’s long-term business
results for the corresponding period and any changes made in response to the outcome of a prior
Say-on-Pay proposal. The Board also believes that holding an advisory vote every three years will avoid
over-emphasis on short-term variations in compensation and business results. In general, the Company’s
compensation programs are straightforward, weighted toward performance, and do not tend to
materially change from year to year. Consequently, the Board believes that an annual shareholder vote
on executive compensation, or a vote every two years, will likely become a referendum in hindsight on
executive compensation paid for the prior year as opposed to a vehicle that provides the Board
meaningful insight into the effectiveness of the Company’s executive compensation programs.
Similar to the Say-on-Pay proposal, this vote is only advisory in nature and will not bind the
Company or the Board to adopt any particular frequency. However, the Board values the opinion of
the Company’s shareholders and will consider the outcome of the vote when determining how
frequently to address future Say-on-Pay proposals. Regardless of the outcome of this Say-on-Frequency
vote, the Board may decide that it is in the best interests of the Company’s shareholders and the
Company to include a Say-on-Pay proposal in the Company’s proxy statement more or less frequently
than the frequency receiving the most votes cast by the Company’s shareholders in this vote.
Voting
The proxy card allows you to vote for one of four choices: holding the advisory vote on executive
compensation every one, two or three years, or abstaining from voting. Therefore, shareholders will not
be voting to approve or disapprove the recommendation of the Board, but will instead be casting their
vote for the voting frequency they prefer.
The Board Recommends that Shareholders Vote for the Option of Once every THREE YEARS
as the Preferred Frequency for Future Shareholder Advisory Votes on Executive Compensation.
42