Alaska Airlines and Horizon Air 2014 Annual Report Download - page 55

Current Executive Pay Elements
Base Pay
The Committee assesses each executive’s
duties and scope of responsibilities, past
performance and expected future contributions
to the Company, the market demand for the
individual’s skills, the individual’s influence on
long-term Company strategies and success, the
individual’s leadership performance, and internal
equity considerations.
In February 2014, the Committee approved base
salary of $442,000 for Mr. Tilden, which was below
the 25th percentile of salaries for CEOs in the
airline peer group. The chart below depicts CEO
base salaries at airline peer group companies.
CEO Base Salary Comparisons
(Airline Peer Group)
2014 Base Salary(1)
Alaska Air Group, Inc. $442,000
Base Salary (Air Group peers)
Air Canada $1,317,000
United Continental Holdings, Inc. $975,000
Delta Air Lines Inc. $725,083
75th Percentile $713,000
Southwest Airlines Co. $675,000
American Airlines Group $700,000
Median $625,000
Hawaiian Holdings, Inc. $625,000
JetBlue Airways Corp. $600,000
WestJet Airlines, Ltd.(2) $534,000
25th Percentile $509,000
Spirit Airlines, Inc. $484,000
Republic Airways Holdings Inc. $475,000
SkyWest Inc. $410,000
Allegiant Travel Co.(3) N/A
(1) Amounts are derived from the most recent
compensation data available as of the date of
this Proxy Statement. In most cases, this is the
2013 base salary as reported in the respective
company’s 2014 proxy statement.
(2) Base salary is provided in Canadian Dollars.
(3) Allegiant’s CEO does not receive a base salary.
Performance-Based Annual Pay
The Company’s Named Executive Officers are
eligible to earn annual incentive pay under the
Performance-Based Pay Plan, in which all Company
employees participated in 2014. The Plan is
intended to motivate executives and other
employees to achieve specific Company goals. The
Committee aligns executive compensation with the
Company’s strategic plan by choosing a target
performance level for each operational or financial
goal (outlined in the 2014 Performance-Based Pay
Metrics table below) that is consistent with the
Company’s strategic plan goals.
The long-term success of the Company is highly
dependent on running a safe and reliable
operation, meeting or exceeding the expectations
of customers, keeping unit costs in check, and
earning profits that meet or exceed a 10 percent
return on invested capital over the business cycle.
Each of these key strategic objectives is reflected
in the goals of the Performance-Based Pay Plan.
For the Named Executive Officers, the 2014
target participation levels are as follows:
2014 Performance-Based Pay Plan
Participation Rates
Name
Target Participation
as % of Base Salary
Bradley D. Tilden 100%
Brandon S. Pedersen 75%
Benito Minicucci 75%
Andrew R. Harrison(1) 70%
Joseph A. Sprague(1) 70%
Glenn S. Johnson 75%
Keith Loveless 75%
(1) Mr. Harrison and Mr. Sprague received mid-year
promotions that increased their participation rates
from 65% to 70%.
Incentive award payments may range from zero
to 200% of the Named Executive Officer’s target
ŠProxy
EXECUTIVE COMPENSATION 43