Chairman and CEO Gary Kelly listens to a question during the opening last year of Southwest Airlines’ system operations center in Dallas. (Terry Maxon/DMN)
Naysayers may point out that Southwest Airlines chairman, president and CEO Gary Kelly was paid more than $5 million in cash, stock and other compensiation in 2014.
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Fortune Magazine offers the counterpoint: His pay is modest compared to heads of other companies.
As a result, Fortune put him at the top of five CEOs that it calls the most underrated.
“Kelly’s pay is still relatively modest,” Fortune said. “His base salary is well below his peers, at his request. And the company has the chutzpah to award a discretionary cash bonus, recognizing, as many companies do, that sometimes things come along that aren’t recognized by ‘official’ objective bonus plans. The discretionary bonus is not large, a few hundred thousand dollars. This all adds up to restrained pay for exceptional performance.”
The magazine noted that he got a 25 percent pay raise in 2014, while total stockholder return was 126 percent, net income grew 51 percent and the return on capital was 16 percent,.
“Since Gary Kelly was appointed as CEO, Southwest has outperformed every one of its rivals: Jet Blue, United Continental, American Airlines, Virgin America, Delta,” Fortune said.
Although Fortune doesn’t mention it, Kelly is having to deal with the unhappiness of labor groups that have been negotiating new contracts for years. But it noted that Southwest employees will divide up $355 milllion in profit sharing based on 2014 profits.
“That’s the equivalent of five weeks’ pay for the average employee and represents the largest total dollar amount Southwest has ever allocated to the plan,” the magazine said.
As it so happens, CEO #2 on Fortune’s list is Brad Tilden, Alaska Air Group’s president and CEO.
“Who is responsible for Alaska Air’s good fortune? Bradley Tilden, who has been piloting the company as CEO for almost three years. The stellar performance at Alaska Air has led to a pay bump for Tilden of only 18%, from $2.9 million to $3.5 million in 2014, according to figures provided by Equilar.,” Fortune said.
“Tilden’s base salary is set below the 25th percentile for the industry; in other words, three-quarters of his peers are paid more than he is. Most companies target their CEO’s pay in the 50th percentile or higher,” it noted.
Source: southwest - Google News http://ift.tt/1zdaUY3
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