SkyWest Airlines 2012 Annual Report Download - page 147

In the case of Messrs. Atkin, Rich and Kraupp, the applicable net income and other financial
targets, with the exception of a designated amount of net income at the Company level, were based on
the designated amounts of both operating subsidiaries SkyWest Airlines (weighted two thirds) and
ExpressJet (weighted one third). Because of his primary responsibility with respect to operations of
SkyWest Airlines, Mr. Childs’ net income and financial targets, with the exception of a designated
amount of net income at the Company level, were set as the designated amounts at the SkyWest
Airlines level. Similarly, because Mr. Holt was principally engaged with respect to the operations of
ExpressJet, his net income and financial targets, with the exception of a designated amount of net
income at the Company level, were designated amounts at the ExpressJet level. At year-end, the
Committee reviewed the actual net income and financial results, as well as other items taken into
account in setting the annual net income and financial targets and applied judgment as to the final
amounts awarded for the year.
2012 Operational and Individual Goals Component. A portion of the Executives’ annual bonus is
based on their achievement of net income and financial targets (weighted 50%) and individual and
operational targets (weighted 50%) established in advance each year. The Committee has adopted this
approach because it believes the use of operational and individual goals allows awards to reflect the
individual efforts and achievements of an Executive that may not be reflected by corporate net income
performance. The targeted bonus attributable to achievement of operational and individual is 40% of
salary for Messrs. Atkin, Rich, Childs and Holt and 30% of salary for Mr. Kraupp. The actual amount
of the bonus payment for each Executive is adjusted by the Committee based on each Executive’s
achievement of his goals.
For fiscal year 2012, the Committee reviewed the individual goals for the Executives. The actual
payout of the portion of an Executive’s annual bonus incentive related to individual goals is increased
or decreased, as applicable, based on the Executive’s achievement of his individual goals.
The corresponding results for each Executive for the year ended December 31, 2012, are set forth
below as a percentage of each Executive’s salary.
Objective Net Income & Net Income & Individual & Individual & Total Annual
Percentage of Financial Financial Operational Operational Bonus
Salary Target Results Target Results Results
Jerry C. Atkin ....... 80% 40.0% 46.0% 40.0% 38.3% 84.3%
Bradford R. Rich .... 80% 40.0% 46.0% 40.0% 37.7% 83.7%
Russell A. Childs .... 80% 40.0% 43.6% 40.0% 40.4% 84.0%
Bradford R. Holt .... 80% 40.0% 50.8% 40.0% 36.6% 87.4%
Michael J. Kraupp . . . 60% 30.0% 34.5% 30.0% 28.6% 63.1%
Amount of 2012 Annual Bonus—The total annual bonus amounts payable to the Executives for
2012 were: Mr. Atkin—$337,042; Mr. Rich—$250,981; Mr. Childs—$213,432; Mr. Holt—$221,919 and
Mr. Kraupp—$110,700. Those amounts are included in the amounts shown in the Summary
Compensation Table below under the caption headings ‘‘Bonus and Non-Equity Incentive Plan
Compensation’’.
Long-Term Awards. Discretionary long-term incentive awards, in the form of stock options,
restricted stock units (or, from 2006 through 2009, shares of restricted stock), and performance units
payable in cash are granted to the Executives annually.
Long-term incentive awards 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
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