It's little surprise that the CEO of most America's most financially sound big airline, Ed Bastian of Delta, was also the highest paid. But how does he stack up to his peers?
Delta Air Lines CEO Ed Bastian was the best paid U.S. airline CEO last year. His compensation package included a tidy sum of $12.4 million — $2.5 million more than his closest peer — in mostly stock awards during the year.
Asked of Bastian’s leading compensation in the sector, a Delta spokesperson emphasized the Atlanta-based carrier’s “pay for performance” philosophy for not only management but across its work groups. Roughly 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 a $3.4 billion pre-tax adjusted loss 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 standing in the eyes of many consumers when it kept middle seats blocked — a pandemic-era policy to allow social distancing onboard implemented when demand was at historic lows — until May, months later than all other carriers.
And, one cannot forget, that with a significant portion of Bastian’s salary paid in stock — and valued based on its stock price on one day, February 3 — the actual dollar amount can fluctuate greatly depending on the day.
United Airlines CEO Scott Kirby followed up Bastian making $9.85 million in 2021. His pay, too, was almost entirely stock awards on his $1 million base salary. United posted a $4.5 billion adjusted net loss during the year.
A significant limiter of Kirby’s take home pay — as well as Bastian’s, and every other U.S. airline CEO — were compensation limits set by the federal CARES Act and payroll support program. The industry availed itself of the federal coronavirus relief during the depths of the pandemic through September 2021. Kirby’s compensation was reduced by 28 percent as a result; Delta does not specify how much Bastian’s was reduced. CARES Act compensation rules remain in place until April 1, 2023.
In addition, nearly every U.S. airline leader took either a significant pay cut or waived their salary altogether in 2020 due to the Covid-19 crisis. Most carriers reinstated pay to pre-pandemic levels in 2021. Combined, the CEOs of the 11 publicly-traded large U.S. airlines — not including regionals — 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 carrier that 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 take a base salary. CARES Act rules reduced his pay by more than 30 percent, according to American.
Southwest Airlines former 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 with Bob Jordan taking over as CEO of the Dallas-based carrier. In something of a magnanimous move, Kelly asked the board to only restore his base salary to 80 percent of its pre-pandemic level of $750,000 at the beginning of 2021. However, after the strong bounce back in travel demand during the summer, it returned to its full 2019 level on July 1. Kelly, like his peers, received the majority of his compensation in stock.
|CEO||Airline||2021 pay (all in)|
|Ed Bastian||Delta||$12.4 million|
|Scott Kirby||United||$9.85 million|
|Doug Parker||American||$7.24 million|
|Gary Kelly||Southwest||$5.8 million|
|Ted Christie||Spirit||$3.87 milion|
|Barry Biffle||Frontier||$3.6 million|
|Robin Hayes||JetBlue||$3.45 million|
|Ben Minicucci||Alaska||$3.21 million|
|Peter Ingram||Hawaiian||$3.09 million|
|Jude Bricker||Sun Country||$567,000|
|Maurice Gallagher, Jr.||Allegiant||$0|
Budget Airline Pay
In a somewhat surprising turn of events, Spirit Airlines CEO Ted Christie taking home $3.87 million was the fifth best-paid airline leader in the U.S. last year. That was higher than the leaders of larger carriers Alaska Airlines and JetBlue Airways, but more on them later. Christie’s compensation was more than half stock-based, though an undisclosed amount of stock awards were “rescinded” due to CARES Act rules.
Frontier Airlines CEO Barry Biffle took home $3.6 million last year. And, with the majority of his pay in stock, Frontier’s proposed merger with Spirit may have factored into his pay as the calculation was made based on the airline’s February 23 stock price — a little over two weeks after the merger was announced.
The CEOs of the two remaining U.S. discounters, Allegiant Air and Sun Country Airlines, took home notably less for the year — 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 having waived his compensation in both 2020 and 2021 for “cash preservation” during the pandemic.
Gallagher retired on June 1 with John Redmond taking over as CEO of Allegiant.
JetBlue CEO Robin Hayes led the mid-tier group of U.S. airlines with $3.45 million in compensation last year. Roughly two-thirds was in the form of stock awards. Hayes’ base salary of $625,000 was reduced by 20 percent as part of the New York-based carrier’s effort to “retain cash and lower 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 pay was reduced by 37 percent from an original value of $5.1 million under CARES Act compensation rules.
And Hawaiian Airlines CEO Peter Ingram received $3.09 million last year. His pay was reduced by nearly 22 percent, or $665,000, under CARES Act rules.
It may come as no surprise that highest-paid Delta CEO Bastian also had the largest pay ratio gap, at 176 times, to the median for all other staff. The median employee compensation at the airline was $70,240 in 2021.
The pay ratios of Kirby at United and Parker at American were both in the triple digits at 126 times and 115 times the median for other employees. The median was $78,245 at United and $62,765 at American.
The ratios at Alaska, JetBlue, Southwest, and Spirit ranged from around 69 times at the first three to 72 times at the latter. Frontier and Sun Country, both of which went public in 2021, did not disclose pay ratios.
Hawaiian had to smallest CEO pay gap to staff at just 44.6 times the median compensation of $69,381 for all other employees.
|CEO||Airline||Staff Median||Ratio to CEO Pay|
|Maurice Gallagher, Jr.||Allegiant||$46,257||0x|
|Jude Bricker||Sun Country||n/a||n/a|
Tags: alaska airlines, allegiant air, american airlines, ceo pay, delta air lines, frontier airlines, hawaiian airlines, jetblue airways, southwest airlines, spirit airlines, sun country airlines, united airlines
Photo credit: Delta CEO Ed Bastian in April 2022.