Not surprisingly, the CEO of America’s most financially strong major airlines, Delta’s Ed Bastian, was also the highest paid. But how does he compare to his peers?
Delta Air Lines CEO Ed Bastian was the highest-paid US airline CEO last year. His compensation package included a tidy sum of $12.4 million, $2.5 million more than his closest par, mostly stock awards for the year.
When asked about Bastian’s industry-leading compensation, a Delta spokesperson emphasized the Atlanta-based airline’s “pay for performance” philosophy not only for management but for all of its work groups. About 94 percent of Bastian’s compensation was based on Delta meeting financial, operational and customer service goals set by its board’s personnel and compensation committee, according to an annual securities filing.
Delta posted an adjusted pretax loss of $3.4 billion in 2021 as it recovered from the coronavirus pandemic. Operationally, it completed 99.4 percent of its flights with 88 percent of domestic flights arriving on time. But in terms of customer service, the airline improved its position in the eyes of many consumers when it kept middle seats blocked, a pandemic-era policy to allow social distancing on board implemented when demand was at record lows. , until May, months after all other carriers.
And, don’t forget, with a significant portion of Bastian’s salary paid in stock, and valued based on the stock price on one day, February 3, the actual dollar amount can fluctuate wildly from day to day.
United Airlines CEO Scott Kirby followed Bastian by earning $9.85 million in 2021. His pay was also almost entirely stock awards on top of his $1 million base salary. United posted an adjusted net loss of $4.5 billion for the year.
A significant limiter on Kirby’s take-home pay, as well as that of Bastian and every other US airline CEO, was compensation limits set by the federal CARES Act and the payroll support program. The industry took advantage of federal coronavirus relief during the depths of the pandemic through September 2021. As a result, Kirby’s compensation was reduced by 28 percent; Delta does not specify how much Bastian’s was reduced. The CARES Act compensation rules remain in effect until April 1, 2023.
Additionally, nearly all US airline leaders have either taken a significant pay cut or forfeited their salary altogether in 2020 due to the Covid-19 crisis. Most airlines restored payments to pre-pandemic levels in 2021. Combined, the CEOs of the 11 largest publicly traded US airlines, not including regional ones, took home more than $53 million in compensation. .
American Airlines CEO Doug Parker was the third-highest-paid with $7.24 million in compensation in 2021. It was his last year at the helm of the Fort Worth, Texas-based airline, which he created through its 2013 merger with US Airways. Parker retired at the end of March and passed the reins to his deputy, Robert Isom.
Parker’s compensation was almost entirely in stock, 7.2 million shares, plus $38,011 in “other compensation” last year. He did not receive base salary. The CARES Act rules reduced his salary by more than 30 percent, according to American.
Former Southwest Airlines CEO Gary Kelly rounded out the Big Four U.S. carriers, which control roughly 80 percent of the domestic market, taking home $5.8 million in 2021. Kelly retired at the end of February and Bob Jordan took over as CEO of the Dallas-based airline. conveyor. In something of a magnanimous move, Kelly asked the board to restore his base salary to just 80 percent of its pre-pandemic level of $750,000 in early 2021. However, after the sharp uptick in demand for travel during the summer, it returned to its full 2019 level on July 1. Kelly, like his peers, received most of his compensation in stock.
|CEO||Airline||Payment 2021 (all included)|
|Ed Bastian||Delta||$12.4 million|
|Scott Kirby||United||$9.85 million|
|doug parker||American||$7.24 million|
|gary kelly||south west||$5.8 million|
|ted christie||Spirit||$3.87 million|
|barry biffle||Border||$3.6 million|
|robin hayes||jet blue||$3.45 million|
|Ben Minicucci||Alaska||$3.21 million|
|Peter Ingram||Hawaiian||$3.09 million|
|Jude Bricker||country of the sun||$567,000|
|Maurice Gallagher Jr.||Loyal||$0|
Economy airline payment
In a somewhat surprising turn of events, Spirit Airlines CEO Ted Christie took home $3.87 million and was the fifth highest-paid leading airline in the US last year. That was higher than the leaders of the largest airlines Alaska Airlines and JetBlue Airways, but more on that later. More than half of Christie’s compensation was stock-based, although an undisclosed number of stock awards were “rescinded” due to CARES Act rules.
Frontier Airlines CEO Barry Biffle took home $3.6 million last year. And, with most of its payout in stock, Frontier’s proposed merger with Spirit may have factored in its payout, since the calculation was made based on the airline’s stock price on February 23, a bit more than two weeks after the merger was announced.
The CEOs of the two remaining US discounters, Allegiant Air and Sun Country Airlines, took home noticeably less during the year, even though both airlines are significantly smaller. Sun Country CEO Jude Bricker received $567,092 in compensation last year, while Allegiant CEO Maurice Gallagher Jr. received nothing after giving up his compensation in both 2020 and 2021 over the “cash preservation” during the pandemic.
Gallagher retired on June 1, and John Redmond took over as CEO of Allegiant.
JetBlue CEO Robin Hayes led the group of mid-tier US airlines with $3.45 million in compensation last year. Roughly two-thirds were in the form of stock awards. Hayes’ base salary of $625,000 was cut by 20 percent as part of the New York-based airline’s effort to “retain cash and cut costs” through March 2021.
Alaska CEO Ben Minicucci received $3.2 million in compensation in 2021. He replaced Brad Tilden as CEO on March 31. Minicucci’s payment was reduced by 37 percent from an original value of $5.1 million under the compensation rules of the CARES Act.
And Hawaiian Airlines CEO Peter Ingram took in $3.09 million last year. His salary was cut by nearly 22 percent, or $665,000, under CARES Act rules.
It may not be surprising that the highest-paid Delta CEO, Bastian, also had the largest pay ratio gap, 176 times, to the median for all other staff. The average employee compensation at the airline was $70,240 in 2021.
Kirby’s pay ratios at United and Parker at American were in the triple digits, 126 times and 115 times the median of other employees. The median was $78,245 at United and $62,765 at American.
The ratios at Alaska, JetBlue, Southwest and Spirit ranged from about 69 times in the first three to 72 times in the last. Frontier and Sun Country, which went public in 2021, did not disclose salary ratios.
Hawaiian had the smallest salary gap between CEO and staff at just 44.6 times the median compensation of $69,381 for all other employees.
|CEO||Airline||Staff Median||Relationship to CEO Salary|
|robin hayes||jet blue||$50,115||69x|
|gary kelly||south west||$84,872||68.6x|
|Maurice Gallagher Jr.||Loyal||$46,257||0x|
|Jude Bricker||country of the sun||n/a||n/a|