Alaska Airlines and Horizon Air 2010 Annual Report Download - page 73

The Performance-Based Pay plan has paid out as follows since its inception:
20%
46%
61%
106%
149.7% Alaska average – 104%
Horizon average – 107%
108%
149.6%
21.2%
182.7%188.2%184.7%
0%
50%
100%
150%
200%
History of Performance-Based Pay
2004 Alaska
2004 Horizon
2005 Alaska
2005 Horizon
2006 Alaska
2006 Horizon 2007 Horizon 2009 Horizon 2010 Horizon
2009 Alaska 2010 Alaska
2008 Horizon
2008 Alaska 2007 Alaska
% of Target
166%
44.3%
51.9%
In addition, all of the Company’s employees,
including the executive officers, participate
in a separate incentive plan called
Operational Performance Rewards, which
pays a monthly incentive payment of an
equal amount to all employees when certain
operational performance targets are met.
Awards are based on the achievement of
on-time performance and customer
satisfaction goals, and the maximum annual
payout for each employee is $1,200.
Long-Term Equity-Based Pay
Long-term equity-based incentive awards
that link executive pay to stockholder value
are an important element of the Company’s
executive compensation program. Long-term
equity incentives that vest over three- or
four-year periods are awarded annually,
resulting in overlapping vesting periods. The
awards are designed in such a way as to
discourage short-term risk-taking and are
primarily intended to align Named Executive
Officers’ long-term interests with those of
stockholders. In addition, equity-based
awards help attract and retain
top-performing executives who fit a team-
oriented and performance-driven culture.
Stock Options:The Company makes a
portion of its long-term incentive grants to
Named Executive Officers in the form of
stock options with an exercise price that is
equal to the fair market value of the
Company’s common stock on the grant
date. Thus, the Named Executive Officers
will realize value from their stock options
only to the degree that Air Group
stockholders would realize value if they
purchased shares and held them for the
same period the executive holds his or her
stock options. The stock options also
function as a retention incentive for
executives as they generally vest ratably
over the four-year period after the date of
grant.
ŠProxy
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