Alaska Airlines and Horizon Air 2010 Annual Report Download - page 66

The table below identifies those persons
known by us to have beneficial ownership of
more than 5% of the Company’s outstanding
common stock, as of March 18, 2011.
5% or More Beneficial Ownership
Name and Address of
Beneficial Owner
Number of
Shares
Owned
Percent of
Outstanding
Shares (1)
BlackRock, Inc. (2) 3,122,156 8.7%
40 East 52nd Street
New York, New York
10022
PRIMECAP Management
Company (3)(4) 2,654,950 7.4%
225 South Lake
Avenue, #400
Pasadena, California
91101
(1) We determine applicable percentage ownership
based on more than 36,031,033 shares of our
common stock outstanding as of March 18,
2011.
(2) Beneficial ownership information is based on a
Schedule 13G/A filed by BlackRock, Inc.
(“BlackRock”) on January 21, 2011. BlackRock
reported in the Schedule 13G that it had sole
voting power and sole dispositive power over all
3,122,156 shares.
(3) Beneficial ownership information is based on a
Schedule 13G/A filed by PRIMECAP Management
Company (“PRIMECAP”) on February 4, 2011.
PRIMECAP reported in the Schedule 13G/A that it
had sole voting power over 218,810 shares and
sole dispositive power over all 2,654,950 shares.
(4) A Schedule 13G/A filed on February 9, 2011 by
Vanguard Chester Funds — Vanguard Primecap
Fund (“Vanguard”), reported sole voting power
over 2,410,000 of the shares representing 6.54%
of our outstanding common stock. The Vanguard
Primecap Fund shares are included in the shares
reported in the table as beneficially owned by
PRIMECAP Management Company.
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
This section contains a discussion of the
material elements of compensation earned
during 2010 by the Company’s Named
Executive Officers listed in the Summary
Compensation Table below: William S. Ayer,
CEO of Alaska Air Group; Bradley D. Tilden,
president of operating subsidiary Alaska
Airlines; Glenn S. Johnson, president of
operating subsidiary Horizon Air Industries
(who served as Alaska Air Group CFO for
part of 2010); Benito Minicucci, COO of
Alaska Airlines; Jeffrey D. Pinneo, former
CEO of Horizon Air Industries (who held this
position for part of 2010); and Brandon S.
Pedersen, CFO of Alaska Air Group.
The structure of the Company’s executive
compensation program is designed to
compensate executives appropriately and
competitively and to drive superior
performance. Because the Named Executive
Officers are primarily responsible for the
overall execution of the Company’s strategy,
a high percentage of their total direct
compensation is variable and tied to
Company performance, thereby providing
incentives to achieve goals that help create
value for stockholders. The Compensation
Committee believes it has designed the
overall compensation program in such a way
as to deter excessive risk-taking and to
encourage executives to focus on the long-
term success of the Company, resulting in
the alignment of the interests of executives
with those of stockholders by:
• encompassing several different
financial and operational goals;
• overlapping performance periods;
• incorporating short-term and long-term
performance periods of varying lengths;
• capping short-term cash incentives;
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