CEO of US Airways sees $2.8 million in compensation after profitable 2010
Joshua Freed, AP Airlines Writer, On Friday April 29, 2011, 7:55 pm EDT
The head of U.S. Airways Group Inc. saw his compensation rise 7 percent to $2.8 million last year, according to an Associated Press calculation from the company's proxy statement, as it logged its first profitable year since 2007.
Chairman and CEO Doug Parker's salary was unchanged at $550,000.
Options awards valued at $1.1 million were down from 2009, but incentive pay of $987,800 was more than double the $429,000 he got for 2009. The stock options will only have value if the company's shares increase in value, and they must vest over the next three years.
He got nothing under a long-term incentive plan because U.S. Airways shares did not perform better than the shares of other airlines from 2008 through 2010.
US Airways is the fifth-biggest U.S. airline, and Parker's pay is less than the CEOs of the other big U.S. carriers.
"While my compensation remains below those of other airline CEOs, it is still a significant expense for our company and with this level of compensation comes significant responsibility," he wrote in a letter to employees on Friday, the same day his pay was detailed in a filing. "I take that responsibility very seriously and will continue to do so as we continue to run a great operation, take care of our customers and ensure US Airways is successful for many years to come."
The airline, based in Tempe, Ariz., reported net income for 2010 of $502 million after losing $205 million in 2009. Revenue rose 13.9 percent to $11.9 billion.
During 2010, its shares more than doubled to finish the year at $10.01, up from a close of $4.84 at the end of 2009. On Friday they rose 32 cents, or 3.7 percent, to close at $9.09.
The AP compensation formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation (which Parker didn't receive) and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
US Airways said it would hold its annual shareholder meeting on June 9 in New York.
