Alaska Airlines and Horizon Air 2013 Annual Report Download - page 53

EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Executive Summary
This CD&A contains a discussion of the
material elements of compensation earned
during 2013 by the Company’s chief
executive officer, its chief financial officer
and the three highest paid executive officers
(the Named Executive Officers) listed in the
Summary Compensation Table: Bradley D.
Tilden, chairman, president and chief
executive officer of Alaska Air Group;
Brandon S. Pedersen, chief financial officer
of Alaska Air Group; Glenn S. Johnson,
president of operating subsidiary Horizon Air
Industries and executive vice president of
Alaska Air Group; Benito Minicucci, chief
operating officer of Alaska Airlines; and
Keith Loveless, general counsel of Alaska
Air Group.
2013 Company Performance Highlights
The following performance indicators provide
important context for the compensation
decisions made in 2013. For the year ended
December 31, 2013, Alaska Air Group:
• posted record full-year 2013 income,
excluding special items, of $383 million,
or $5.40 per diluted share, compared to
$339 million, or $4.73 per diluted share,
in 2012;
• shared $105 million (or nearly five weeks
of pay) in incentive rewards with all
employees;
• achieved return on invested capital of
13.6%, compared to 13.0% in 2012;
• repurchased 2,492,093 shares of its
common stock (bringing total shares
repurchased since 2007 to 21 million);
• experienced an increase of more than
70% in the price of a share of common
stock;
• received a credit rating upgrade to BB+
from Standard and Poor’s with a stable
outlook;
• ranked “Highest in Customer Satisfaction
Among Traditional Network Carriers” by
J.D. Power for the sixth year in a row; and
• ranked “number one” in U.S. Department
of Transportation on-time performance
among major U.S. airlines.
Governance Highlights
• Compensation decisions are made by a
committee of directors who meet the
independence standards of the NYSE and
SEC.
• The Compensation and Leadership
Development Committee retains an
independent consultant who provides no
other services to the Company.
• There is no provision for the gross-up of
excise taxes in connection with change-
in-control severance payments.
• Change-in-control severance payments
require a double-trigger event in order to
become effective.
• The Committee has put a recoupment
policy in place to recover payments to
executives under certain circumstances.
• The Committee has executive and
independent director stock ownership
requirements.
• An anti-pledging and anti-hedging policy is
in place.
• The Company has no executive
employment agreements.
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