Alaska Airlines and Horizon Air 2013 Annual Report Download - page 63
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EXECUTIVE COMPENSATION
The Performance-Based Pay Plan has paid out as follows since its inception:
History of Performance-Based Pay
20%
46%
61%
106%
149.7%
108%
149.6%
21.2%
182.7%
188.2%184.7%
191%
179.8%
134.7% 132.1%
162.9% 162.9%
0%
200%
2004 Alaska
2004 Horizon
2005 Alaska
2005 Horizon
2006 Alaska
2006 Horizon
2007 Horizon
2009 Horizon
2010 Horizon
2011 Horizon
2009 Alaska
2010 Alaska
2011 Alaska
2013 Alaska
2012 Horizon
2008 Horizon
2008 Alaska
2007 Alaska
166.0%
44.3%
51.9%
150%
100%
250%
50%
2013 Horizon
2012 Alaska
Alaska average – 121%
Horizon average – 122%
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 of $100 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. In 2013, each
employee received $1,150 under the
Operational Performance Rewards program.
Long-Term Equity-Based Pay
Long-term equity 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 to discourage
short-term risk taking and are primarily
intended to align Named Executive Officers’
interests with those of stockholders. In
addition, equity awards help attract and
retain top-performing executives who fit a
team-oriented and performance-driven
culture.
Stock Options
The Company grants a portion of its long-
term incentive awards to the 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 had 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
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