SkyWest Airlines 2014 Annual Report Download - page 143

Role of Consultants. Neither the Company nor the Compensation Committee has any contractual
arrangement with any compensation consultant for determining the amount or particular form of any
Executive’s compensation. During 2014 and 2012, the Company and Compensation Committee received
advice from Frederic W. Cook & Co., Inc. (‘‘F.W. Cook’’) with respect to executive compensation
practices and trends generally and within the airline industry. The Company and the Compensation
Committee retained F.W. Cook to make recommendations regarding the specific amount or forms of
compensation awarded to Executives in 2012 and 2014. The Company’s approach to setting Executive
compensation in 2013 and the components of the 2013 Executive compensation were consistent with
the Company’s practices in 2012 and 2014. The Company and the Compensation Committee will
continue to periodically seek the advice of such consultants, as deemed necessary, in the future. The
Compensation Committee has sole authority to hire and fire external compensation consultants.
No Employment and Severance Agreements. The Executives do not have employment, severance or
change-in-control agreements, although the vesting of stock options, restricted stock, restricted stock
units and performance units generally is accelerated upon a change in control of the Company. The
Executives serve at the will of the Board, which enables the Board to terminate the employment of any
Executive with discretion as to the terms of any severance. This is consistent with the Company’s
performance-based employment and compensation philosophy.
Compensation Committee Consideration of Shareholder Advisory Vote. At the Company’s Annual
Meeting of Shareholders held in May 2014, the Company submitted the compensation of its named
executive officers to the Company’s shareholders in a non-binding vote. The Company’s executive
compensation program received the support of more than 84% of the shares represented at the
meeting. The Compensation Committee considered the results of the 2014 vote and views the outcome
as evidence of strong shareholder support of its executive compensation decisions and policies.
Accordingly, the Compensation Committee concluded that no significant revisions were necessary to
the Company’s executive compensation program for 2014. The Compensation Committee will continue
to review future shareholder voting results, including the voting results with respect to ‘‘Proposal 2—
Advisory Vote on Executive Compensation’’ described in this Proxy Statement, and determine whether
to make any changes to the Company’s executive compensation program in light of such voting results.
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
• Retirement and Other Benefits
The compensation objectives for each Executive are more fully described in the following
paragraphs.
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 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. 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 salaries of the Executives are set forth in the Summary Compensation
Table set forth immediately following this section.
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