DEF 14A of Alaska Air Group, Inc., Mar 28, 2024

DEF 14A of Alaska Air Group, Inc.

Filed Mar 28, 2024 · FY20230000950170-24-038178

Open on EDGAR

  1. Our Board

    Our Board The Board has nominated 10 director nominees for election at the Annual Meeting. Each of the director nominees currently serve on the Board and were previously elected by the Company’s shareholders at the 2023 Annual Meeting. On February 12, 2024, Dhiren Fonseca notified the Board of his intention to not stand for re-election in order to pursue other professional and personal opportunities. He will complete serving his current term, which ends at the Annual Meeting on May 9, 2024. Mr. Fonseca’s departure was not due to any disagreement with the Company. Mr. Fonseca has served on the Alaska Air Group board for over nine years and currently sits on the Audit Committee and the Innovation Committee. In connection with this notice, the Board acted on February 14, 2024, to reduce the number of Board seats from 11 to 10 effective at the Annual Meeting. All nominees meet the New York Stock Exchange (NYSE) governance standards for director independence, except for Mr. Minicucci, who is not independent due to his position as an executive officer of the Company.

  2. Our Board

    | Nominee and Principal Occupation | Age | Director Since | Committee Membership | | Patricia M. Bedient Former Executive Vice President and CFO The Weyerhaeuser Company | 70 | 2004 | Non-Executive Board Chair | | James A. Beer Former Chief Financial Officer Atlassian Corporation | 63 | 2017 | Innovation (Chair) Audit | | Raymond L. Conner Former Vice Chairman The Boeing Company | 68 | 2018 | Compensation and Leadership Development (Chair) Safety | | Daniel K. Elwell President Elwell & Associates, LLC and Former Deputy and Acting Administrator, Federal Aviation Administration | 64 | 2021 | Safety Innovation | | Kathleen T. Hogan Chief People Officer and Executive Vice President of Human Resources Microsoft | 58 | 2019 | Governance, Nominating and Corporate Responsibility (Chair) Compensation and Leadership Development | | Adrienne R. Lofton Vice President, Global Brand Marketing Google | 48 | 2021 | Innovation Compensation and Leadership Development | | Ben Minicucci President and CEO Alaska Air Group, Inc. and Alaska Airlines, Inc. | 58 | 2020 | | | Helvi K. Sandvik President, Kidways LLC and Former President NANA Development Corporation | 66 | 2013 | Safety (Chair) Compensation and Leadership Development | | J. Kenneth Thompson President and CEO Pacific Star Energy LLC | 72 | 1999 | Audit Governance, Nominating and Corporate Responsibility |

  3. Our Board

    | Nominee and Principal Occupation | Age | Director Since | Committee Membership | | Eric K. Yeaman Founder and Managing Partner, Hoku Capital LLC | 56 | 2012 | Audit (Chair) Governance, Nominating and Corporate Responsibility |

  4. Proposal 1: Election of Directors to One-Year Terms

    Proposal 1: Election of Directors to One-Year Terms The Company’s Bylaws provide that directors shall serve a one-year term. Directors are elected to hold office until their successors are elected and qualified, or until resignation or removal in the manner provided in the Company’s Bylaws. Ten directors have been nominated for election this year and each has consented to serve a one-year term ending in May 2025. There are no family relationships among the directors and our executive officers.

  5. Proposal 1: Election of Directors to One-Year Terms

    | Patricia M. Bedient, 70 | Qualifications: | | Former Executive Vice President and CFO, The Weyerhaeuser Company Director of Alaska Air Group since 2004 Non-executive Board Chair | • Financial/Accounting and Investor Relations Expertise • Public Company Governance Experience • Business Development and Mergers and Acquisitions Experience Professional Highlights: Ms. Bedient was executive vice president for Weyerhaeuser Company, a publicly traded company and one of the world's largest integrated forest products companies, from 2007 until her retirement in July 2016. She was the company's CFO from 2007 until February 2016. Ms. Bedient served as senior vice president, finance and strategic planning from 2006 until 2007 and as vice president, strategic planning from 2003, when she joined Weyerhaeuser. A certified public accountant (CPA) since 1978, she served as managing partner of the Seattle office of Arthur Andersen LLP prior to joining Weyerhaeuser. Ms. Bedient also worked at Andersen’s Portland and Boise offices as a partner and as a CPA during her 27-year career with the firm. She is a member of the American Institute of CPAs and the Washington Society of CPAs. Ms. Bedient currently serves on the Board of Suncor Energy where she chairs the audit committee and is a member of the governance nominating committee as well as serving on the Park Hotels and Resorts Board as a member of both the audit and governance nominating committees. Current Public Company Board Service: • Suncor Energy, Inc. • Park Hotels and Resorts Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • Oregon State University Board of Trustees • University of Washington Foster School of Business Advisory Board Education: • BS, Oregon State University |

  6. Proposal 1: Election of Directors to One-Year Terms

    | James A. Beer, 63 | Qualifications: | | Former CFO, Atlassian Corporation Director of Alaska Air Group since 2017 Innovation Committee (Chair) Audit Committee | • Airline/Transportation/Safety Expertise • Business Development and Mergers and Acquisitions Experience • Cybersecurity and Technology Expertise • Financial/Accounting and Investor Relations Expertise • Public Company Governance Experience Professional Highlights: Mr. Beer served as CFO at Atlassian Corporation PLC, a publicly traded company from 2018 until his retirement in June 2022. He was executive vice president and CFO for McKesson Corporation from 2013 to 2017, and CFO at Symantec Corp. from 2006 to 2013. From 1991 to 2006, he held several management positions including CFO at AMR Corporation and American Airlines. Mr. Beer served on the ForeScount Technologies Inc. board of directors from October 2016 to August 2020. In August 2020, he was appointed to the board of DocuSign, Inc. and serves on its audit and M&A committees. Current Public Company Board Service: • DocuSign Inc. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) Education: • BS, Aeronautical Engineering, Imperial College, London University • MBA, Harvard Business School |

  7. Proposal 1: Election of Directors to One-Year Terms

    | Raymond L. Conner, 68 | Qualifications: | | Former Vice Chairman, The Boeing Company Director of Alaska Air Group since 2018 Compensation and Leadership Development Committee (Chair) Safety Committee | • Airline/Transportation/Safety Expertise • Business Development and Mergers and Acquisitions Experience • Government/Public Affairs/Regulatory Expertise • HR/Org. Strategy/DE&I Experience • Investor Relations Expertise • Public Company Governance Experience • Public Company CEO Experience Professional Highlights: Mr. Conner is the former vice chairman of The Boeing Company. Prior to his appointment to vice chairman in 2013, Mr. Conner served in a number of positions with Boeing Commercial Airplanes since 1977, including a variety of roles within the sales, finance and material divisions. Most recently, he served as vice president and general manager of the 777 program (2001-2003), vice president of sales for the Americas (2003 to 2007), vice president and general manager of supply chain management and operations (2008 – 2011), vice president sales, marketing and commercial aviation services (2012), and president and CEO (2013-2017). Mr. Conner is operating advisor to Clayton, Dubilier & Rice (a private investment firm) since September 2018. He serves as Chairman of Pursuit Aerospace, a global manufacturer of complex aircraft engine components since February 2023. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • Board of Trustees Central Washington University • Pursuit Aerospace Education: • BS, Central Washington University • MBA, University of Puget Sound |

  8. Proposal 1: Election of Directors to One-Year Terms

    | Daniel K. Elwell, 64 | Qualifications: | | President, Elwell & Associates, LLC Former Deputy and Acting Administrator, Federal Aviation Administration Director of Alaska Air Group since 2021 Safety Committee Innovation Committee | • Airline/Transportation/Safety Expertise • Climate/Carbon Expertise • Government/Public Affairs/Regulatory Expertise • Technology Expertise Professional Highlights: Mr. Elwell is President of Elwell & Associates, LLC. He served as Deputy and Acting Administrator of the Federal Aviation Administration (FAA) from June 2017 to November 2020, where he was responsible for the safety and efficiency of the largest aerospace system in the world. He also had oversight of the FAA’s multibillion-dollar Next Gen air traffic control modernization program to accelerate the shift from ground-based radar to state-of-the-art satellite technology. Mr. Elwell also served as Senior Vice President for Safety, Security and Operations at Airlines for America (A4A) from 2013-2015 and was Vice President of the Aerospace Industries Association (AIA) from 2008 to 2013. He is also a former military and commercial pilot. In March 2021, Mr. Elwell was appointed to the Dedrone (airspace security) and to the Asylon (drone security) advisory boards. In addition, he serves on the board of PARSEC Acquisition (a space, transportation, and advanced space special 3 purposes acquisition company). Current Public Company Board Service: • PARSEC Acquisition Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • Joby Aviation Advisory Board, since March 2021 • Dedrone Advisory Board • Asylon Advisory Board • AFCO/AVPorts • Aireon Advisory Board • SAAB, USA SSA Board Education: • BS, U.S. Air Force Academy |

  9. Proposal 1: Election of Directors to One-Year Terms

    | Kathleen T. Hogan, 58 | Qualifications: | | Chief People Officer and Executive Vice President of Human Resources, Microsoft Director of Alaska Air Group since August 2019 Governance, Nominating and Corporate Responsibility Committee (Chair) Compensation and Leadership Development Committee | • HR/Org. Strategy/DE&I Experience • Public Company Governance Experience • Technology Experience Professional Highlights: Ms. Hogan has been the chief people officer executive vice president of human resources for Microsoft Corporation (technology), a publicly traded company since 2014. She previously served as corporate vice president of Microsoft Services from 2003-2015. Prior to joining Microsoft in 2003, Ms. Hogan was a partner at McKinsey & Co. and a development manager at Oracle Corp. She previously led the finance committee for the Puget Sound affiliate of Susan G. Komen for the Cure. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • National Center for Women & Information Technology Education: • BS, Harvard University • MBA, Stanford University Graduate School of Business |

  10. Proposal 1: Election of Directors to One-Year Terms

    | Adrienne R. Lofton, 48 | Qualifications: | | Vice President, Global Brand Marketing Google Director of Alaska Air Group since 2021 Compensation and Leadership Development Committee Innovation Committee | • Brand/Marketing Expertise • HR/Org. Strategy/DE&I Experience Professional Highlights: Ms. Lofton has been the vice president of global brand marketing at Google since 2021, where she oversees the integrated consumer experience for Google's platforms & ecosystems portfolio. She previously served as vice president and head of North America marketing at Nike Inc. from 2018 to 2021, and as Under Armour’s senior vice president, of global marketing, operations and philanthropy from 2015 to 2018. Ms. Lofton has deep cross-industry experience that includes leadership roles at Levi Strauss & Co., where she was chief marketing officer for the global Dockers brand and Target Corporation, where she helped spearhead the company’s multicultural marketing focus and provided cross-categorical leadership across its iconic master brand. She began her career at Gap Inc. and also worked at Starcom, focused on the General Motors portfolio. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) Education: • BA, Howard University |

  11. Proposal 1: Election of Directors to One-Year Terms

    | Ben Minicucci, 58 | Qualifications: | | President and CEO Alaska Air Group, Inc. and Alaska Airlines, Inc. Director of Alaska Air Group since 2020 | • Airline/Transportation/Safety Expertise • Business Development and Mergers and Acquisitions Experience • Climate/Carbon Expertise • Government/Public Affairs/Regulatory Expertise • HR/Org. Strategy/DE&I Experience • Investor Relations Expertise • Public Company Governance Experience • Public Company CEO Experience Professional Highlights: Mr. Minicucci is chief executive officer of Alaska Air Group (Air Group) and Alaska Airlines (Alaska) since March 31, 2021. He has been president of Alaska since May 2016 and became president of Air Group in March 2021. He served as chief operating officer from December 2008 until November 2019. Mr. Minicucci also served as chief executive officer of Virgin America Inc. from December 2016 to July 2018. Prior to this, he held various executive positions at Alaska, including executive vice president of operations, vice president of Seattle operations, and staff vice president of maintenance and engineering. Before joining Alaska, Mr. Minicucci had a variety of roles at Air Canada and served in the Canadian Armed Forces for 14 years prior to joining the private aviation sector. Mr. Minicucci served on the board of PG&E Corporation (an energy-based holding company) from July 2018 to April 2019. Current Non-Public Company Board Service: • University of Washington Michael G. Foster School of Business, Center for Leadership and Strategic Thinking • UNCF Education: • BS and MS, Royal Military College of Canada • Advanced Management Program, Harvard Business School |

  12. Proposal 1: Election of Directors to One-Year Terms

    | Helvi K. Sandvik, 66 | Qualifications: | | President, Kidways LLC Director of Alaska Air Group since 2013 Safety Committee (Chair) Compensation and Leadership Development Committee | • Business Development and Mergers and Acquisitions Experience • Government/Public Affairs/Regulatory Expertise • HR/Org. Strategy/DE&I Experience • Public Company Governance Experience • CEO Experience | | | Professional Highlights: | | | Ms. Sandvik is president of Kidways LLC (business management consulting). From 1999 to 2016, Ms. Sandvik was president of NANA Development Corporation (NDC), a diversified business engaged in government contracting, oilfield and mining support, professional management services, and engineering and construction. During this time, she oversaw the growth of the NDC from an oil field support services company with revenues of $50 million into a diverse, multi-sector, global enterprise with revenues of $1.5 billion. Prior to that, Ms. Sandvik served in a variety of leadership roles within the Alaska Department of Transportation and Public Facilities, including director of statewide aviation and deputy commissioner, as well as a variety of public and non-profit leadership roles. | | | Current Non-Public Company Board Service: | | | • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • HDR, Inc. • National Center for American Indian Enterprise Development | | | Education: • BA, Kalamazoo College • MBA, University of Alaska Fairbanks |

  13. Proposal 1: Election of Directors to One-Year Terms

    | J. Kenneth Thompson, 72 | Qualifications: | | President and CEO, Pacific Star Energy LLC Director of Alaska Air Group since 1999 Audit Committee Governance, Nominating and Corporate Responsibility | • Business Development and Mergers and Acquisitions Experience • Climate/Carbon Expertise • Financial/Accounting and Investor Relations Expertise • HR/Org. Strategy/DE&I Experience • Public Company Governance Experience • Technology Expertise • CEO Experience Professional Highlights: Since 2000, Mr. Thompson has been a co-owner and president and CEO of Pacific Star Energy LLC, a firm that is a passive owner of oil lease royalties in Alaska. He served from 2004 to 2012 as Managing Director of Alaska Venture Capital Group LLC, a private oil and gas exploration firm in which Pacific Star Energy LLC owns an interest. He had a 26 year career (1974-2000) with ARCO with his last position being EVP of ARCO's Asia Pacific region companies. In a prior position at ARCO, he served as executive head of research and technology which included oversight of engineering, operations, geoscience, environmental and IT technologies. Mr. Thompson serves on the environmental, health, safety and social responsibility committee, serves on the executive committee and chairs the finance and technical committee of Coeur Mining Inc.. He also serves on the compensation committee, the governance and nominating committee, and chairs the sustainability and climate oversight committee, as well as serving as non-executive chairman of the board, of Pioneer Natural Resources Company. He is also a member and chair of CDF Capital, a non-profit organization. In 2019, Mr. Thompson was selected as one of the 100 most influential corporate directors by the National Association of Corporate Directors (NACD). Current Public Company Board Service: • Pioneer Natural Resources Company (Non-Executive Chairman) • Coeur Mining, Inc. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) Education: • BS, Petroleum Engineering, Missouri University of Science and Technology |

  14. Proposal 1: Election of Directors to One-Year Terms

    | Eric K. Yeaman, 56 | Qualifications: | | Founder and Managing Partner, Hoku Capital LLC Director of Alaska Air Group since 2012 Audit Committee (Chair) Governance, Nominating and Corporate Responsibility | • Business Development and Mergers and Acquisitions Experience • Financial/Accounting and Investor Relations Expertise • Public Company Governance Experience • CEO Experience Professional Highlights: Mr. Yeaman is currently the founder and managing partner of Hoku Capital LLC, a strategic advisory services firm located in Honolulu, HI. He was president and COO of First Hawaiian Bank, a wholly owned subsidiary of First Hawaiian Inc., from June 2015 to August 2019. From 2008 to 2015, he was president and CEO of Hawaiian Telcom, a telecommunications and technology company serving the state of Hawaii. Prior to that, he was senior executive vice president and COO of Hawaiian Electric Company, Inc. (HECO). Mr. Yeaman joined Hawaiian Electric Industries, Inc. (HEI), HECO’s parent company, in 2003 as financial vice president, treasurer and CFO. Prior to joining HEI, Mr. Yeaman held the positions of chief operating and financial officer for Kamehameha Schools from 2000 to 2003. He began his career at Arthur Andersen LLP in 1989. Current Public Company Board Service: • Alexander & Baldwin, Inc. Current Non-Public Company Board Service: • Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group) • DR Fortress • Lanihau Properties, LLC • Palani Ranch Company, Inc. • Friends of Hawaii Charities, Inc. • The Harold K.L. Castle Foundation • Hawaii Asia Pacific Association Education: • BA, University of Hawaii at Manoa |

  15. Board Committee and Risk Oversight Functions

    | Compensation and Leadership Development Committee | With regard to executive and director compensation and executive ownership under the Senior Vice President of People and guidance from an independent consultant: o set, review and approve compensation of the CEO and other elected officers of the Company and its subsidiaries, taking into account CARES Act requirements and other legal considerations; and o establish the process for reviewing and approving corporate goals relevant to CEO compensation and for evaluating CEO performance in light of those goals. • Set annual goals under the broad-based Performance-Based Pay Plan and Operational Performance Rewards Plan and administer the plans. • Grant stock awards and stock options to elected officers. • Administer and review the supplementary retirement plans for elected officers and the equity-based incentive plans. • Make recommendations to the Board regarding other executive compensation issues, including modification or adoption of plans. • Fulfill ERISA fiduciary and non-fiduciary functions for tax-qualified retirement plans by monitoring management benefit committees and approving the membership of those committees, and the extension of plan participation to employees of subsidiaries. • Approve the terms of employment and severance agreements with elected officers and the form of change-in-control agreements. • Ensure a framework, process and policies are in place for CEO and executive succession, including standards for assessment, and the periodic review of CEO and other management development and succession plans. • Administer and make recommendations to the Board of Directors with respect to the Company’s equity and other long-term incentive equity plans. • Administer, review and modify the Company’s policy regarding recoupment of certain compensation payments. • Produce the report on executive compensation required for the annual proxy statement. • Oversees of human capital matters, including advancing diversity, equity and inclusion initiatives. • Annually review and reassess the adequacy of the Committee’s charter and its performance. |

  16. 2023 Director Compensation

    2023 Director Compensation The following table presents information regarding the compensation paid for 2023 to members of the Board of Directors who were not also the Company’s employees. The compensation paid to Mr. Minicucci for 2023 is presented in the Summary Compensation Table and the related explanatory tables. Mr. Minicucci did not receive additional compensation for his service on the Board. Our compensation policy for non-employee directors provides for the director to receive annual cash and stock retainers for their service on the Board. The Board's philosophy on director compensation is to be near the median of airline peer group directors. The board compensation structure for 2023 remained consistent with the 2022 structure and is as follows: • Annual cash retainer of $85,000; • Annual stock retainer of $120,000; • Additional annual cash retainer for the non-executive Board Chair of $125,000; and • Annual retainer of $25,000 for the chairs of the Audit Committee and the Compensation and Leadership Development Committee, and $20,000 for the chairs of the Governance Nominating and Corporate Responsibility Committee, Safety Committee and Innovation Committee. Under the terms of the Company’s Stock Deferral Plan for Non-Employee Directors, each eligible director may elect in the prior year to receive his or her annual stock retainer in the form of shares that are fully vested at the time of grant or to defer payment of all or a portion of the award until his or her termination of service on the Board. If no election is made in the year prior to payment, the director is issued fully vested shares.

  17. 2023 Director Compensation Table

    2023 Director Compensation Table

  18. 2023 Director Compensation Table

    | Name | Fees Earned or Paid in Cash ($) | Stock Awards (1) ($) | All Other Compensation (2) ($) | Total ($) | | Patricia M. Bedient | 210,001 | 119,999 | 14,269 | 344,269 | | James A. Beer | 105,001 | 119,999 | 13,874 | 238,874 | | Raymond L. Conner | 110,001 | 119,999 | 12,685 | 242,685 | | Daniel K. Elwell | 85,001 | 119,999 | 12,587 | 217,587 | | Dhiren R. Fonseca | 85,001 | 119,999 | 16,942 | 221,942 | | Kathleen T. Hogan | 105,001 | 119,999 | 19,713 | 244,713 | | Adrienne R. Lofton | 85,001 | 119,999 | 12,488 | 217,488 | | Helvi K. Sandvik | 105,001 | 119,999 | 10,947 | 235,947 | | J. Kenneth Thompson | 85,001 | 119,999 | 12,290 | 217,290 | | Eric K. Yeaman | 110,001 | 119,999 | 14,665 | 244,665 |

  19. 2023 Director Compensation Table

    (1) In May 2023, Mr. Beer, Mr. Elwell, Ms. Hogan, and Mr. Yeaman were each granted 2,851 vested and deferred stock units (DSUs), based on their 2022 elections to defer their 2023 stock retainers. Ms. Bedient, Mr. Conner, Mr. Fonseca, Ms. Lofton, Ms. Sandvik, and Mr. Thompson were each issued 2,851 vested shares. See discussion of these awards in Note 13 (Stock-Based Compensation Plans) to the Company’s Consolidated Financial Statements included as part of the Company’s 2023 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. The non-employee directors do not hold any outstanding stock options. They also do not participate in any non-equity incentive compensation plans, nor do they participate in a nonqualified deferred compensation plan. Non-employee directors do not receive pension benefits for their service. As part of each director’s compensation, the non-employee director and the non-employee director’s spouse or domestic partner and eligible dependents are provided complimentary, positive-space transportation on Alaska Airlines and Horizon Air. Included in the “All Other Compensation” column for each non-employee director is the incremental cost to the Company for providing this travel to the director and any eligible family members. Positive-space travel is a benefit unique to the airline industry. By providing this travel to non-employee directors, the Company is able to deliver a highly valued benefit at a low cost, and believes this benefit encourages non-employee directors to experience and engage with Alaska Airlines and Horizon Air products and services. In 2023, the Board also approved an award of $10,000 worth of Mileage Plan Miles to each director that can be, among other things, used to purchase tickets on oneworld partners so that directors can experience partner airlines. The “All Other Compensation” column also includes the value of reimbursements for taxes on the transportation benefits provided to each director.

  20. Impact of Equity Clawbacks

    Impact of Equity Clawbacks By strictly capping executive compensation at 2019 levels for three years, the CARES Act prevented the Committee from rewarding the heightened responsibilities of the NEOs who were promoted during (or just before) the pandemic and prevented the Committee from making regular market-based compensation adjustments. Since 2020, all but one of the NEOs have been entrusted with larger, more complex roles, but at compensation levels associated with their prior roles. For example: • Mr. Minicucci was promoted to CEO of Alaska Air Group and Alaska Airlines on March 31, 2021. His total compensation in each of the three years: 2020, 2021 and 2022 was less than the compensation he received in 2019 as Alaska’s President (after the impact of the clawbacks, which is not reflected in the Summary Compensation Table below). The Company had recouped a total of $5.3 million in unvested equity awards (based on grant date value) from Mr. Minicucci during the three years that we were under the restrictions. • Mr. Tackett was promoted to CFO on March 3, 2020, before the pandemic hit. His total compensation in each of the three years: 2020, 2021 and 2022 was less than the compensation he received as Alaska’s Executive Vice President of Planning & Strategy (after the impact of the clawbacks, which is not reflected in the Summary Compensation Table below). The Company had recouped a total of $2.8 million in unvested equity awards (based on grant date value) from Mr. Tackett during the three years that we were under the restrictions. • Mr. Levine was promoted to Senior Vice President of Legal on January 13, 2020, before the pandemic hit. His total compensation in each of the three years: 2020, 2021 and 2022 was less than the compensation he received before his promotion (after the impact of the clawbacks, which is not reflected in the Summary Compensation Table below). The Company had recouped a total of $1.6 million in unvested equity awards (based on grant date value) from Mr. Levine during the three years that we were under the restrictions. Ms. von Muehlen was promoted to COO on April 3, 2021. Her total compensation, in each of the three years: 2020, 2021 and 2022 was less than the compensation she received as Alaska’s Senior Vice President of Maintenance & Engineering (after the impact of the clawbacks, which is not reflected in the Summary Compensation Table below). The Company had recouped a total of $2.8 million in unvested equity awards (based on grant date value) from Ms. von Muehlen during the three years that we were under the restrictions. The CARES Act limitations on compensation had also prevented the Company from meeting gender pay parity considerations in relation to Ms. von Muehlen’s male predecessor. For illustrative purposes, a reconciliation of the Total Compensation for the NEOs from 2020- 2022 from the Summary Compensation Table to the value received after the clawback of equity granted is presented below.

  21. Impact of Equity Clawbacks

    | Named Executive Officer | Grant Award Year | Total Compensation from Summary Compensation Table ($) | Value of Equity Awards Clawed Back ($) | Total Compensation After Reduction for Equity Clawback ($) | No. of Shares Subject to Equity Awards Clawed Back (1) (#) | | Ben Minicucci | 2022 | 6,487,981 | (3,349,450) | 3,138,531 | 48,665 | | | 2021 | 5,130,162 | (1,918,360) | 3,211,802 | 25,930 | | | 2020 | 5,285,135 | — | 5,285,135 | — | | | Total | | (5,267,810) | | 74,595 | | Shane Tackett | 2022 | 3,610,895 | (1,715,020) | 1,895,875 | 26,075 | | | 2021 | 3,043,701 | (1,054,579) | 1,989,122 | 14,205 | | | 2020 | 2,941,393 | — | 2,941,393 | — | | | Total | | (2,769,599) | | 40,280 | | Andrew Harrison | 2022 | 3,572,916 | (1,105,807) | 2,467,109 | 16,720 | | | 2021 | 3,004,088 | (469,197) | 2,534,891 | 6,320 | | | 2020 | 2,830,772 | — | 2,830,772 | — | | | Total | | (1,575,004) | | 23,040 | | Kyle Levine (2) | 2022 | N/A | (1,015,833) | N/A | 19,205 | | | 2021 | N/A | (557,494) | N/A | 8,080 | | | 2020 | N/A | N/A | N/A | — | | | Total | - | (1,573,327) | - | 27,285 | | Constance von Muehlen (2) | 2022 | 2,794,212 | (1,775,005) | 1,019,207 | 42,361 | | | 2021 | 2,016,913 | (1,050,958) | 965,955 | 14,622 | | | 2020 | N/A | N/A | N/A | — | | | Total | | (2,825,963) | | 56,983 |

  22. Philosophy and Objectives of the Company’s Executive Compensation Program

    Philosophy and Objectives of the Company’s Executive Compensation Program The philosophy of the Company’s executive compensation program in 2023 was consistent with that of prior years: being conservative stewards of shareholder resources while compensating executives appropriately and competitively (within the bounds of CARES Act limits through April 1, 2023) and driving superior performance relative to other airlines in North America. Because the NEOs are primarily responsible for the overall execution of the Company’s strategy, a high percentage of their total target direct compensation, approximately 88% for the CEO and 77% for the other NEOs, is variable and tied to Company performance or stock price, thereby providing incentives to achieve goals to help create value for shareholders. The fundamental objectives of the executive compensation program are: • to attract and retain highly qualified executives who share the Company’s values and are committed to its strategic plan by designing the total compensation package to be competitive with an appropriate peer group as there is substantial competition for talent in our key geographies and despite the challenge of on-going CARES Act compensation caps; • to motivate executives to provide excellent leadership and achieve Company goals by linking incentive pay to the achievement of specific targets set in the PBP Plan and the Company’s strategic plan; • to align the interests of executives and shareholders by tying a large portion of executives’ total direct compensation (meaning base salary, actual short-term incentive pay and the grant date fair value of equity awards) to the achievement of objective goals related to the Company’s financial performance, safety record, cost structure, ESG related initiatives and guest satisfaction; and • to provide executives with reasonable security to motivate them to continue employment with the Company and achieve goals that will help the Company emerge from unprecedented challenges, remain competitive and thrive for the long term. 2023 Executive Transitions and Compensation Actions: To implement the executive compensation program for 2023, the Committee took the following steps in 2023: • Approved target total direct compensation for Mr. Minicucci that is approximately 88% performance-based, meaning that it is contingent on operational, financial and/or stock price performance. For the other NEOs, the Committee approved target total direct compensation that is, on average, approximately 77% performance-based. (See the Target Total Direct Compensation section below.) Both our short-term and long-term incentive programs contain performance-based goals that we believe contribute to the long-term success of the Company. • Established 2023 performance goals and participation rates for the PBP Plan. The goals under this plan include metrics around profitability, safety, cost management, carbon emissions reduction, and relative industry financial performance. All employees of Alaska Airlines and Horizon Air participate in the PBP plan and work towards the same goals. The NEOs have target participation rates ranging from 75% to 150% of their base salary. • Approved long-term incentive equity awards to NEOs. Each NEO's grant consisted of 50% of service-based RSU awards, and 50% of PSU awards that vest only if specified performance levels of relative total shareholder return (TSR) and diversity and inclusion metrics are achieved. The performance metrics for the PSUs granted in 2023 are weighted 80% based on the Company’s TSR relative to an airline industry peer group (identified below under Long-Term Equity-Based Incentive Compensation) and 20% based on achievement of leadership diversity goals. We believe these awards align executives’ incentives with the creation of long-term value for shareholders. As described in the CARES Act section above, approved equity grants consisting of a combination of PSUs and RSUs that the Committee believes appropriately compensated NEOs for work performed during the CARES Act executive compensation restriction period. As described above, these grants were awarded with the same number of units and under the same performance requirements and vesting schedules as the original grants that were clawed back during the restricted period.

  23. The Use of Peer Group Compensation Data

    The Use of Peer Group Compensation Data The Committee reviews and analyzes target total direct compensation for the NEOs annually against the compensation provided by a peer group of airline companies to executives in similar positions. In analyzing the information for 2023, the Committee reviewed the target total direct compensation for executives of a peer group of the airlines identified below. The following companies represent the airline peer group selected by the Committee as a comparator for determining appropriate compensation levels for 2023 (the same peer group as used to evaluate 2022 compensation): • Air Canada • American Airlines Group • Delta Air Lines • Hawaiian Holdings • JetBlue Airways • SkyWest • Southwest Airlines • Spirit Airlines United Airlines Holdings The Committee chose to include the companies named above in its peer group for the following reasons: they represent a group of sufficient size to present a reasonable indicator of executive compensation levels; • they are in the airline industry and their businesses are similar to the Company’s business and the environment in which they compete; • the median annual revenue of this group approximates the Company’s historical annual revenue with ranges for airlines and pandemic recovery; and • the Company competes with these peer companies for talent to fill certain key, industry-related executive positions. In the aggregate, 2023 target total cash compensation and target total direct compensation for the executive vice president NEOs was at approximately the 50th percentile for comparable positions at companies in the airline peer group. For Mr. Minicucci, target total cash compensation was set below the 25th percentile and target total direct compensation was set at approximately the 40th percentile for chief executive officers within the airline peer group. The target total cash compensation and target total direct compensation for Mr. Levine, a senior vice president, were at approximately the 30th percentile compared to comparable positions within a general peer set. In setting 2023 executive compensation, the Committee also reviewed data for 18 companies in the broader transportation industry having median annual revenue similar to the Company’s annual revenues as an additional reference point to assess the Company’s executive compensation program. The companies in this transportation industry peer group include: Air Canada, Atlas Air, Avis Budget Group, Expedia Group, Inc., Expeditors International of Washington, Inc., Hub Group, Inc., Hilton Worldwide Holdings, Inc., JB Hunt Transport Services, Inc., JetBlue Airways Corporation, Landstar System, Inc., Marriott International, Inc., Norfolk Southern Corporation, Norwegian Cruise Line Holdings Ltd., Royal Caribbean Cruises Ltd., Ryder System, Inc., Knight-Swift Transportation Holdings, Inc., Wyndham Destinations, Inc., and XPO Logistics, Inc. The peer group listed above is consistent with the 2022 transportation peer group used for this purpose, with the exception of removing AMERCO as the Committee believed its long-term incentive practices differed from those of the Company and the other peer companies. In the aggregate, target total cash compensation for the NEOs fell below the median for comparable positions at companies in the transportation industry peer group, and target total direct compensation was between approximately the 25th and 50th percentiles. For our CEO, target total cash compensation and target total direct compensation fell below the 25th percentile for chief executive officers within the transportation industry peer group. In general, the Committee uses this peer group and transportation industry data as background information for its compensation decisions and does not “benchmark” compensation at any particular level relative to the peer companies. Except as otherwise noted in this CD&A, decisions by the Committee are qualitative and the result of the Committee’s business judgment, which is informed by the analysis of the members of the Committee as well as input from, and market data provided by, its independent compensation consultant. The Committee believes that the compensation opportunities provided to the NEOs are appropriate in light of competitive considerations.

  24. The Application of Internal Equity Considerations

    The Application of Internal Equity Considerations In addition to reviewing compensation data for airline and transportation industry peer groups, the Committee believes it is appropriate to consider other principles of compensation, and not rely on market data as the sole basis for setting compensation. Thus, while the Committee has considered peer group data as described above, it has also applied other compensation principles, including internal equity, when determining executive compensation. By also considering internal equity, the Committee can structure executive compensation in a way that helps ensure appropriate compensation in light of atypical internal or external pressures or compensation considerations.

  25. PBP Short-Term Incentive Pay Plan

    PBP Short-Term Incentive Pay Plan The Company’s NEOs are eligible to earn annual incentive pay under the PBP Plan, in which all eligible company employees participated in 2023. The PBP Plan is intended to motivate executives and other employees to achieve specific company goals. The Committee aligns the PBP Plan with the Company’s strategic plan by choosing a target performance level for each operational, safety, financial, or sustainability goal (outlined in the 2023 Performance-Based Pay Metrics table below) that is consistent with the Company’s strategic plan goals. Target payout opportunities are established for each NEO as a percentage of base salary. These percentages are approved by the Committee after considering market data, performance, tenure, and internal pay parity, among other factors as it deems appropriate. For the NEOs, the 2023 target participation levels were the same as their 2022 target participation levels were as follows:

  26. 2023 Performance-Based Pay Plan Participation Rates

    Incentive award payments under the PBP Plan range from 0% to 200% of the NEO’s target based on the achievement of performance goals set by the Committee at the beginning of each year plus a margin modifier that can increase the PBP payout based on pre-tax margin industry placement as described below. However, the PBP payout percentage (including the modifier) is capped at 200% of target for executive employees. For each performance metric, performance at the target level will generally result in a 100% payout of the target amount for that metric, while the payout percentage would be 200% for performance at or above the maximum level and 25% for performance at the threshold level. The payout percentages are interpolated for performance between the levels identified below, but if performance for a particular metric is below the threshold level, no payment will be made as to that metric. The Committee retains discretion to adjust bonus amounts that would otherwise be paid, though no such discretion was applied for 2023. The long-term success of the Company is highly dependent on running a profitable, safe, sustainable and reliable operation and outperforming the industry. Each of these key strategic objectives is reflected in the goals of the PBP Plan. For 2023, the PBP Plan metrics for employees were set as follows:

  27. 2023 Performance-Based Pay Metrics

    “Adjusted Pretax Profit” means the net income of Alaska Air Group as computed under GAAP, adjusted for Excluded Items and Alternative Accounting Treatments. “Excluded Items” means (a) income taxes, (b) pretax expense under any Alaska Air Group (or subsidiary) performance-based pay, operational performance rewards, or similar such programs as determined in the discretion of the Committee, and (c) special income or expense items that, in the discretion of the Committee, and (c) special income or expense items that, in the discretion of the Committee, should be excluded because recognizing them would not appropriately serve the goals of the PBP Plan. These may include, without limitation, gain or loss on disposition of capital assets, impairments or other fleet exit costs, expenses from voluntary or involuntary severance programs, significant curtailment gains or losses from retirement plans, the impact of changes in accounting principle, government refunds or assistance and cumulative effect of accounting changes. “Alternative Account Treatments” means expense or income items that, for purposes of calculating Adjusted Pretax Profit, the Company (or any subsidiary) will account for based on non-GAAP methods because, in the discretion of the Committee, using GAAP accounting methods would not appropriately serve the goals of the PBP Plan. These may include, without limitation, fuel hedge accounting on an “as settled” basis. In addition to the metrics identified above, the PBP plan contained a relative margin modifier based on Adjusted Pre-Tax Profit compared to results for corresponding metrics reported by six competitors (Delta, United, American, Southwest, JetBlue, and Hawaiian) that can increase the payout by up to 60 percentage points. We believe profitable growth creates value for all our stakeholders. Implementing a profit modifier builds on our baseline profitability threshold, allowing us to create further alignment with our long-term financial goals of industry outperformance and to recognize our employees for contributing to that success. Ultimately, stronger outperformance allows greater reinvestment in our business to fuel more growth, fosters our culture, and provides the foundation for attractive shareholder returns, further solidifying our strong position in the marketplace. As noted above, the PBP plan's target financial, safety, operational and sustainability goals are generally consistent with the strategic plan that is approved by the Board. Maximum goals correlate to superior performance, while threshold goals generally correlate to what the Committee believes is an acceptable, but minimal, level of performance as compared to the prior year. The Committee believes the use of safety and guest experiences metrics in the PBP plan reflects the Company’s unwavering commitment to safety and guest care and reinforces its message that every employee ‘owns safety’. The Committee also included a emissions reduction as a PBP plan metric for 2023 to drive operational enhancements focused on reducing carbon emissions to assist in achieving the Company’s short and long term sustainability goals. The Committee believes that using adjusted non-GAAP measures, as defined in the footnotes to the 2023 Performance-Based Pay Metrics table above, such as Adjusted Pre-Tax Profit, rather than GAAP measures, more closely ties results to elements of performance that can be controlled by the decisions and actions of employees, thereby providing a more direct link between performance and reward. In addition, by removing the short-term impact of certain business decisions (such as the gain or loss on disposition of capital assets), we believe the use of adjusted measures encourages executives to make decisions that are in the best interest of the Company over the long term. The table below presents the actual performance results and payout percentages for the 2023 PBP Plan.

  28. 2023 PBP Pay Calculation

    | PBP Metrics | Actual | % of Target Achieved | Weight | | Payout % | | Profit | 7.5 | 84.5% | 70 | | 59.1% | | Safety | 11.0 | 200% | 10 | | 20.0% | | Guest Experience | 10 out of 12 | 200 | 10 | | 20.0% | | Emissions Reduction | 2.62 | 87.8% | 10 | | 8.8% | | Initial PBP Payout % | | | | | 107.9% | | Margin Modifier Placement | 3rd | | | + | 20.0% | | Total PBP Payout as a % of Target Participation rate | | | | = | 129.7% |

  29. 2023 PBP Pay Calculation

    (1) PBP payout percentage plus the modifier is capped at 200% for executive employees. In addition, all the Company’s employees, including the NEOs, participate in a separate annual incentive plan called the Operational Performance Reward (OPR) Plan, which pays a monthly incentive of up to $150 to all employees when certain operational performance targets are met. 50% of the award is based on the achievement of division specific safety metrics. These safety metrics are designed to identity and mitigate risk in top safety areas across the companies. The divisions have authority to update the safety metrics throughout the year if they identify rising risk in another area and/or if the goals have been met on existing metrics. The remaining 50% is based on on-time performance. The maximum annual payout for each employee is $1,800. In 2023, each of the NEOs earned $975 under the OPR Plan.

  30. Long-Term Equity-Based Incentive Compensation

    Long-Term Equity-Based Incentive Compensation Long-term equity incentive awards that link executive pay to shareholder value are an important element of the Company’s executive compensation program. Long-term equity incentives that vest over three year periods are awarded annually, resulting in overlapping vesting periods. As the value of the awards is dependent on our stock price, the awards are designed to further align NEOs’ interests with those of shareholders. In addition, equity awards help attract and retain top-performing executives who fit a team-oriented and performance-driven culture. The Company’s 2023 equity grant structure is described below. The Committee determined to remove stock options as an element of the NEOs’ 2023 equity grant program, although the Committee may award options from time to time as it deems appropriate. Restricted Stock Units. The Committee grants 50% of each NEO’s annual long-term incentive award value in the form of time-based restricted stock units (“RSUs”). Subject to the executive’s continued employment with the Company, the RSUs generally vest on the third anniversary of the date they are granted and, upon vesting, are paid in shares of Alaska Air Group common stock. The RSUs provide a long-term retention incentive through the vesting period that requires continued service to the Company. The RSUs are also designed to further link executives’ interests with those of Alaska Air Group’s shareholders, as the value of the RSUs is based on the value of Alaska Air Group common stock. The Company does not issue dividend equivalents on unvested RSUs. Performance Stock Units. The Committee also grants 50% of each NEO’s annual long-term incentive award value in the form of performance-based stock units (“PSUs”). The PSUs vest only if the Company achieves performance goals established by the Committee for the three-year performance period covered by the award. PSUs also provide a retention incentive as vesting is generally contingent on continued employment through the performance period (although all or a portion of the award may remain eligible to vest if the executive’s employment terminates in certain circumstances). Like RSUs, the PSUs help align the executives’ interests with those of shareholders as their value depends on the value of Alaska Air Group common stock. The Company does not issue dividend equivalents on unvested PSUs. PSUs Granted in 2023. For the PSU awards granted to the NEOs in May 2023 with a January 1, 2023 through December 31, 2025 performance period, the vesting of 80% of the target number of stock units subject to the award will be determined in accordance with the chart below based on the Company’s TSR rank versus the following peer group of airlines: Air Canada, American Airlines, Delta Air Lines, Hawaiian Airlines, JetBlue Airways, SkyWest, Inc., Southwest Airlines, Spirit Airlines, Inc., and United Airlines. The vesting of 20% of the target number of stock units subject to the award will be determined based on achieving racial equity goals at the leadership level. The Committee believes measuring TSR on a relative basis rather than on an absolute basis provides a more relevant reflection of the Company’s performance by mitigating the impact of various macro-economic factors and rising fuel costs, that tend to affect the entire industry. The Committee believes that advancing diversity and inclusion are critical to the long-term success of the Company and therefore introduced the achievement of diversity and inclusion goals at the senior leadership level (i.e., among executives and lower level employees who supervise others) into the long-term executive compensation plan (which we refer to as “D&I Metric” in the table below) in 2021. The percentage of the PSUs that vest ranges from 0% to 200% of the target number of units subject to the award, depending on the results of the Company’s goals for the performance period. The Committee retains discretion to reduce vesting percentages.

  31. 2023 Performance Stock Unit Award Metrics (2023-2025 Performance Period)

    2023 Performance Stock Unit Award Metrics (2023-2025 Performance Period)

  32. 2023 Performance Stock Unit Award Metrics (2023-2025 Performance Period)

    | Airline Peer Group | | Representation Metric (1) | | | TSR Rank Among the Airline Peer Group | Percentage of Peer Group Stock Units that Vest | BIPOC Representation Metrics on 12/23/2024 | Percentage of D&I Stock Units that Vest | | 1st or 2nd | 200% | 30% and above | 200% | | 3rd | 170% | 23% | 100% | | 4th | 140% | 21% | 50% | | 5th | 120% | Below 21% | 0% | | 6th | 90% | | | | 7th | 65% | | | | 8th | 45% | | | | 9th | 20% | | | | 10th | 0% | | |

  33. 2023 Performance Stock Unit Award Metrics (2023-2025 Performance Period)

    Payout percentages will be linearly interpolated for performance between the levels identified above. PSUs Granted Before 2023. In February 2020, the Committee approved grants of PSUs to the NEOs for the January 1, 2020 through December 31, 2022 performance period. In February 2023, the Committee approved a payout of these PSUs at a rate of 50%. Such performance stock awards were based 25% on the Company’s TSR performance relative to the following airline peer group: Air Canada, American Airlines Group, Delta Air Lines, Hawaiian Holdings, JetBlue Airways, SkyWest, Southwest Airlines, Spirit Airlines, and United Continental Holdings. The Company’s TSR performance ranked 2nd among these 9 peers, resulting in a 200% payout for that metric. The PSU awards granted in 2020 were also based 75% on achievement of the Company’s ROIC goals set by the Committee (maximum payout if ROIC was 15% or above, target payout for ROIC of 11%, and threshold payout for ROIC of 8%). The Company’s average ROIC during the 2019-2021 performance period was severely impacted by the results of the COVID-19 pandemic which resulted in a 0% payout for that metric. Accordingly, these awards vested as to 50% of the target number of PSUs subject to the award The Committee also granted PSUs in 2021 and 2022 with three-year performance periods beginning in January of each respective year. The PSU awards granted in 2021 are scheduled to vest at the end of the January 1, 2021 through December 31, 2023 performance period and are based 80% on the Company’s TSR performance relative to the same airline peer group that was used for the 2020 awards and 20% on the Company’s progress towards advancing BIPOC representation at the senior leadership level. The PSU awards granted in 2022 are scheduled to vest at the end of the January 1, 2022 through December 31, 2024 performance period and are based 80% on the Company’s TSR performance relative to the same airline peer group that was used for the 2020 awards and 20% on the Company’s progress towards advancing BIPOC representation at the senior leadership level. Equity Award Guidelines. The Committee considers and generally follows equity grant guidelines that are based on the target total direct compensation levels and pay mix for each NEO described above. Target equity grant date values, when combined with the base salary and annual target incentive opportunity described above, are designed to achieve target total direct compensation for the NEOs at or about the 50th percentile of the peer group data for executives in comparable positions. The Committee may adjust target equity grant date values to the NEOs based on the Committee’s general assessment of: • the individual’s contribution to the success of the Company’s financial performance; internal pay equity; the individual’s performance of job responsibilities; and the accounting impact to the Company and potential dilution effects of the grant. The Committee believes that RSUs and PSUs each provide incentives that are important to the Company’s executive compensation program as a whole. Therefore, the Committee generally awards a mix of these instruments to the NEOs when approving annual equity awards. 2023 Annual Equity Awards. For 2023, the target equity grant date value and mix of the long-term incentive awards granted to the NEOs are shown in the table below.

  34. Annual Equity Award Value and Mix

    Annual Equity Award Value and Mix

  35. Annual Equity Award Value and Mix

    | Name | Total Target Equity Value | Restricted Stock Units | Performance Stock Units | | Ben Minicucci | $3,795,488 | 50% | 50% | | Shane Tackett | $1,750,000 | 50% | 50% | | Andrew Harrison | $1,650,000 | 50% | 50% | | Kyle Levine | $750,000 | 50% | 50% | | Constance von Muehlen | $1,275,000 | 50% | 50% |

  36. Annual Equity Award Value and Mix

    2023 Annual Equity Award Target Values. The v4alues in the table below represents the target dollar value of annual PSU and RSU awards granted in 2023 identified in the table above. The Company converts the target value allocated to each type of award into a number of shares to be subject to the award by dividing the dollar value by an average 30-day trailing closing stock price. The actual grant date fair value of each award as determined for accounting purposes (which are disclosed in the executive compensation tables below) will vary from our target award values due to required accounting methodologies. For more information on these awards, see the 2023 Grants of Plan-Based Awards table below.

  37. Annual Equity Target Values

    | Name | RSUs (50% of Total Grant) | PSUs (50% of Total Grant) | Total Target Equity Value | | Ben Minicucci | $1,897,744 | $1,897,744 | $3,795,488 | | Shane Tackett | $875,000 | $875,000 | $1,750,000 | | Andrew Harrison | $825,000 | $825,000 | $1,650,000 | | Kyle Levine | $375,000 | $375,000 | $750,000 | | Constance von Muehlen | $637,500 | $637,500 | $1,275,000 |

  38. Annual Equity Target Values

    Promotion and Market Adjustment Grants. In addition to the annual equity grant program described above, the Committee occasionally makes equity awards at such times and on such terms as it considers appropriate to help achieve the goals of the Company’s executive compensation program. As described above, the compensation of the NEOs and other executives was capped by the CARES Act at their 2019 total compensation levels during the period from March 2020 to April 2023, even as to executives who were promoted to more responsible roles during (or shortly before) that period. To comply with these restrictions, the Committee adopted a give-and-take approach whereby it approved compensation (including equity awards) the executive would have received had the CARES Act restrictions not been in place, and then clawed back any compensation (generally unvested equity awards) that exceeded the executive’s 2019 cap. On May 2, 2023, following the expiration of the CARES Act restriction period, the Committee approved awards of RSUs, PSUs and, in certain cases stock options (the "Promotion and Market Adjustment" Grants) to the Company's NEOs and other executives. These Promotion and Market Adjustment Grants are essentially re-grants of the equity awards that were approved and then clawed back during the restricted period. In deciding to make these grants, the Committee consulted with its independent compensation advisor and sought input from many of our top institutional shareholders and determined it would be appropriate to make these grants as the NEOs’ pay had been frozen at 2019 levels for three years without being adjusted to market pay levels or to reflect promotions to more responsible positions after 2019. The Committee also deemed it appropriate to grant the Promotion and Market Adjustment Grants under the same terms as would have applied to the corresponding equity grants made in 2020-2022 that were clawed back or, in the case of promotions, the terms that would have applied had the grant been made at the time of the promotion. Accordingly, the performance metrics applicable to the 2021-2023 performance period PSUs were the same as for the PSUs first awarded in 2021 and discussed in the 2022 proxy statement, and the performance metrics applicable to the 2022-2024 performance period PSUs were the same as for the PSUs first awarded in 2022 and discussed in the 2023 proxy statement. The total number of units granted is detailed in the Grants of Plan-Based Awards and reconciles to the table on pg. 43 that outlines the equity awards that were clawed back during the CARES Act restriction period. Upon review of market data presented by the independent compensation advisor and in keeping with the Committee’s philosophy of compensating NEOs at or around 50% of the median for total target compensation, on November 2, 2023, the Committee approved a grant of RSUs to Mr. Levine with a grant value of $500,000, vesting ratably on the first three anniversaries of the grant date.

  39. Agreements Regarding Change in Control and Termination

    Agreements Regarding Change in Control and Termination The Company has change-in-control agreements with the NEOs that provide for severance benefits if the executive’s employment terminates under certain circumstances in connection with a change in control. The Company has entered into change-in-control agreements with these executives because it believes that the occurrence, or potential occurrence, of a change-in-control transaction would create uncertainty and disruption during a critical time for the Company. The payment of cash severance benefits under the agreements is triggered if two conditions are met: (1) actual or constructive termination of employment and (2) the consummation of a change-in-control transaction. The Committee believes that the NEOs should be entitled to receive cash severance benefits only if both conditions are met. Once the change-in-control event occurs, the NEO’s severance and other benefits payable under the contract begin to diminish with time so long as the executive’s employment continues, until ultimate expiration of the agreement 36 months later for Mr. Minicucci and the executive vice presidents and 24 months later for Mr. Levine. None of the Company’s change-in-control agreements provide for reimbursement of excise taxes.

  40. 2023 Summary Compensation Table

    2023 Summary Compensation Table The following table presents information regarding compensation for services rendered during 2023 for the CEO, the CFO, and the three other most highly compensated executive officers. These individuals are referred to as the NEOs in this Proxy Statement. As described in the CD&A above, in order to comply with CARES Act restrictions on executive compensation, the Company clawed back equity awards in 2020, 2021 and 2022 that had been granted to the NEOs and other impacted executives. The total compensation reflected in the table includes the grant date fair value of equity awards that were made during the CARES Act restricted period and subsequently clawed back to comply with the CARES Act. In addition, the table includes the equity grants issued in 2023 to replace the clawed-back grants as described in more detail above. Thus, these grants have been reported twice in the Company’s Summary Compensation Table, with the clawed back grants made in 2021 and 2022 included in the table below (and the clawed back grants made in 2020 shown in the proxy statement filed in prior years) and the make-up grants issued in 2023 also being included below). The grants to the NEOs shown in the table below that were clawed back were as follows: • Mr. Minicucci had roughly $3.354 million and $1.9 million in equity awards clawed back in 2022 and 2021 respectively; • Mr. Tackett had roughly $1.7 million and $1.05 million in equity awards clawed back in 2022 and 2021 respectively; • Mr. Harrison had roughly $1.1 million and $470k in equity awards clawed back in 2022 and 2021 respectively; • Mr. Levine had roughly $1 million and $557k in equity awards clawed back in 2022 and 2021 respectively; and • Ms. von Muehlen had roughly $1.8 million and $1.05 million in equity awards clawed back in 2022 and 2021 respectively. In each case, the values of the clawed-back equity awards above are as of the grant date. For a table showing the impact these clawbacks had on the NEOs’ compensation, see page 41-42.

  41. 2023 Summary Compensation Table

    | Name and Principal Position | Year | Salary ($) | Stock Awards (1)(2) ($) | Option Awards (1) ($) | Non- Equity Incentive Plan Compen- sation (3) ($) | Change in Pension Value and Nonqualified Deferred Compensation Earnings (4) ($) | All Other Compen- sation (5) ($) | Total ($) | | Ben Minicucci | 2023 | 637,692 | 7,969,932 | — | 1,224,388 | 94,596 | 386,446 | 10,313,054 | | CEO | 2022 | 600,769 | 3,044,242 | 842,151 | 1,803,021 | — | 197,798 | 6,487,981 | | Alaska Air Group | 2021 | 572,269 | 2,685,881 | 832,659 | 892,090 | — | 147,263 | 5,130,162 | | Shane Tackett | 2023 | 552,462 | 4,011,210 | — | 672,243 | 91,725 | 297,066 | 5,624,706 | | EVP Finance & CFO | 2022 | 527,654 | 1,498,951 | 414,608 | 1,003,255 | — | 166,427 | 3,610,895 | | Alaska Air Group | 2021 | 503,846 | 1,475,412 | 406,195 | 534,358 | — | 123,890 | 3,043,701 | | Andrew Harrison | 2023 | 530,923 | 2,915,973 | — | 646,073 | 100,332 | 379,649 | 4,572,950 | | EVP & CCO | 2022 | 507,308 | 1,498,951 | 414,608 | 964,598 | — | 187,451 | 3,572,916 | | Alaska Airlines | 2021 | 485,385 | 1,475,412 | 406,195 | 514,821 | — | 122,275 | 3,004,088 | | Kyle Levine (6) | 2023 | 494,292 | 2,350,784 | 102,803 | 475,125 | 19,687 | 211,946 | 3,654,637 | | SVP General Counsel & CCEO | | | | | | | | | | Alaska Air Group | | | | | | | | | | Constance von Muehlen | 2023 | 438,908 | 2,993,735 | 404,923 | 534,270 | 32,823 | 173,348 | 4,578,007 | | EVP & COO | 2022 | 417,446 | 1,170,553 | 323,832 | 793,861 | — | 88,520 | 2,794,212 | | Alaska Airlines | 2021 | 373,077 | 892,914 | 288,146 | 375,860 | 34,943 | 51,973 | 2,016,913 |

  42. 2023 Summary Compensation Table

    The amounts reported in the Stock Awards and Option Awards columns of the Summary Compensation Table above reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of the Company’s financial statements (disregarding any estimate of forfeitures related to service-based vesting conditions). Options granted in 2023 to Mr. Levine and Ms. von Muehlen are part of the stock awards granted to NEOs in 2023 described in more detail beginning on page 56 above and the 2023 Grant of Plan Based Awards section beginning on page 64. For a discussion of the assumptions and methodologies used to value the awards reported in these columns, please see the discussion of stock awards and option awards contained in Note 13 (Stock-Based Compensation Plans) to the Company’s Consolidated Financial Statements, included as part of the Company’s 2023 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. For more information about the stock awards and option awards granted in 2023 to the NEOs, please see the discussion under 2023 Grants of Plan-Based Awards below. The amounts reported in Stock Awards column of the table above also include the grant date fair value of performance-based stock unit awards granted in 2021, 2022 and 2023 to the NEOs based on the probable outcome (determined as of the grant date) of the TSR performance-based conditions applicable to the awards. A Monte Carlo simulation is used to determine the probable outcome of the performance-based conditions applicable to the performance stock awards. The 2021, 2022 and 2023 awards also included a diversity and inclusion metric which was recorded and reported at target fair value on the day of grant. The following table presents the aggregate grant date fair value of these performance-based awards included in the Stock Awards column for 2021, 2022 and 2023 and the aggregate grant date value of these awards assuming that the highest level of performance conditions will be achieved.

  43. 2023 Summary Compensation Table

    | | 2021 Performance Awards | | 2022 Performance Awards | | 2023 Performance Awards | | | | Aggregate Grant Date Fair Value (Based on Probable Outcome) | Aggregate Grant Date Fair Value (Based on Maximum Performance) | Aggregate Grant Date Fair Value (Based on Probable Outcome) | Aggregate Grant Date Fair Value (Based on Maximum Performance) | Aggregate Grant Date Fair Value (Based on Probable Outcome) | Aggregate Grant Date Fair Value (Based on Maximum Performance) | | Name | ($) | ($) | ($) | ($) | ($) | ($) | | Ben Minicucci | 1,861,136 | 2,795,779 | 2,207,752 | 3,345,958 | 1,975,935 | 3,296,489 | | Shane Tackett | 1,071,854 | 1,615,345 | 1,087,073 | 1,647,514 | 911,271 | 1,520,291 | | Andrew Harrison | 1,071,854 | 1,615,345 | 1,087,073 | 1,647,514 | 858,795 | 1,432,744 | | Kyle Levine (7) | — | — | — | — | 390,545 | 651,553 | | Constance von Muehlen | 607,310 | 1,141,026 | 848,911 | 1,286,566 | 664,027 | 1,107,809 |

  44. 2023 Summary Compensation Table

    (3) The Non-Equity Incentive Plan Compensation column of the Summary Compensation Table above includes compensation awarded under the Performance-Based Pay Plan and Operational Performance Rewards Plan, each as further described in the Compensation Discussion and Analysis. (4) The amount reported in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column of the Summary Compensation Table above reflects the year-over-year change in present value of accumulated benefits determined as of December 31 of each year for the Salaried Retirement Plan and the Supplementary Retirement Plan, both defined benefit plans. The number included in this column is an estimate of the current value of future payments under these plans and does not represent value received in the year presented. For the NEOs, company contributions to the DC Supplementary Retirement Plan in lieu of the defined-benefit plan are reported in the All Other Compensation column and detailed in the table in Footnote (5) below. Mr. Tackett’s pension benefits in the Salaried Retirement Plan were “hard frozen” effective January 1, 2014. This means that the benefit payments due upon his retirement were fixed based on his years of service and earnings as of that date. This amount also includes any above-market earnings NEOs received on their accounts under the non-qualified deferred compensation plans. (5) The following table presents detailed information on the types and amounts of compensation reported for the NEOs in the “All Other Compensation” column of the Summary Compensation Table.

  45. 2023 Summary Compensation Table

    | | | | Life Insurance | | | Travel | | | | | | | Name | Company Contribution to 401(k) Account ($) | Company Contribution to DC-OSRP Account ($) | Additional 'Life Insurance Premium ($) | Taxes Paid on Additional Life Insurance Premium ($) | Life Insurance Premium Over $50K ($) | Travel Benefits(a) ($) | Reimbursement of Taxes Paid on Travel Benefits ($) | Reimbursement of Tax Paid on Business Travel Income(b) ($) | Financial Planning ($) | Other(c) ($) | Total “All Other Compensation” ($) | | Ben Minicucci | 24,750 | 255,850 | 155 | 101 | 6,192 | 40,654 | 26,376 | 28,013 | — | 4,355 | 386,446 | | Shane Tackett | 40,950 | 153,425 | 231 | 150 | 2,160 | 49,737 | 32,269 | 15,789 | — | 2,355 | 297,066 | | Andrew Harrison | 24,750 | 147,153 | 250 | 162 | 3,312 | 109,998 | 71,663 | 17,916 | 1,090 | 3,355 | 379,649 | | Kyle Levine | 24,750 | 59,181 | 261 | 169 | 3,312 | 68,787 | 44,629 | - | 9,502 | 1,355 | 211,946 | | Constance von Muehlen | 24,750 | 67,654 | 329 | 213 | 6,192 | 32,400 | 21,021 | 11,920 | 4,252 | 4,355 | 173,348 |

  46. 2023 Summary Compensation Table

    (a) Includes personal travel amounts which are based on actual ticket fares at time of purchase with a slight discount for the refundable convenience and the value of Mileage Plan Miles that are annually granted to executives. (b) Amount of income tax paid to the State of California for time spent working in California including any grossed up values. (c) Includes the Company’s cost of providing a Company lounge membership and the above-market amount paid for accidental death and dismemberment insurance premiums, and any company match on charitable contributions, and an annual physical, if applicable. Mr. Levine was not an NEO prior to 2023; therefore, only his 2023 compensation is included in the table.

  47. 2023 Grants of Plan-Based Awards

    2023 Grants of Plan-Based Awards The following table presents information regarding the incentive awards granted to the NEOs in 2023. Please see the PBP Short-Term Incentive Pay Plan section in the CD&A for a description of the material terms of the non-equity incentive plan awards reported and the Long-Term Equity-Based Incentive Compensation section in the CD&A for a description of the material terms of the equity-based awards reported. Each of the equity-based awards reported below was granted under the Company’s 2016 Performance Incentive Plan (2016 Plan).

  48. 2023 Grants of Plan-Based Awards

    | | | Estimated Further Payouts Under Non-Equity Incentive Plan Awards (1) | | | Estimated Future Payouts Under Equity Incentive Plan Awards (2) | | | All Other Stock Awards: (2) | All Other Option Awards: | | | | Name | Grant Date | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | Number of Shares of Stock or Units (#) | Number of Securities Under- lying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards (1) ($) | | Ben Minicucci | | | | | | | | | | | | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 12,580 | | | 545,595 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 6,635 | | | 287,760 | | RSUs Annual Award | 5/4/2023 | | | | | | | 39,160 | | | 1,648,244 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 6,667 | 25,160 | 50,320 | | | | 1,642,143 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 8,008 | 30,220 | 60,440 | | | | 1,870,255 | | PSUs Annual Award | 5/4/2023 | | | | 10,377 | 39,160 | 78,320 | | | | 1,975,935 | | PBP Plan | | 487,500 | 975,000 | 1,950,000 | | | | | | | | | Shane Tackett | | | | | | | | | | | | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 7,240 | | | 313,999 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 3,670 | | | 159,168 | | RSUs Annual Award | 5/4/2023 | | | | | | | 18,060 | | | 760,145 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 3,840 | 14,490 | 28,980 | | | | 945,733 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 3,943 | 14,880 | 29,760 | | | | 920,893 | | PSUs Annual Award | 5/4/2023 | | | | 4,786 | 18,060 | 36,120 | | | | 911,271 | | PBP Plan | | 266,000 | 532,000 | 1,064,000 | | | | | | | | | Andrew Harrison | | | | | | | | | | | | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 7,240 | | | 313,999 | | RSUs Annual Award | 5/4/2023 | | | | | | | 17,020 | | | 716,372 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 3,840 | 14,490 | 28,980 | | | | 945,733 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 347 | 1,310 | 2,620 | | | | 81,073 | | PSUs Annual Award | 5/4/2023 | | | | 4,510 | 17,020 | 34,040 | | | | 858,795 | | PBP Plan | | 255,550 | 511,100 | 1,022,200 | | | | | | | | | Kyle Levine | | | | | | | | | | | | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 1,794 | 55.74 | 31,088 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 3,651 | 55.74 | 63,268 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 485 | 55.36 | 8,447 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 2,060 | | | 89,342 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 2,900 | | | 125,773 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 3,250 | | | 140,953 | | RSUs Annual Award | 5/4/2023 | | | | | | | 7,740 | | | 325,777 | | RSUs Promotion and Market Adjustment Award | 11/2/2023 | | | | | | | 14,570 | | | 467,988 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 224 | 845 | 1,690 | | | | 29,613 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 1,534 | 5,790 | 11,580 | | | | 377,902 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 1,725 | 6,510 | 13,020 | | | | 402,891 | | PSUs Annual Award | 5/4/2023 | | | | 2,051 | 7,740 | 15,480 | | | | 390,545 | | PBP Plan | | 196,875 | 393,750 | 787,500 | | | | | | | | | Constance von Muehlen | | | | | | | | | | | |

  49. 2023 Grants of Plan-Based Awards

    | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 1,351 | 64.55 | 20,926 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 1,234 | 64.55 | 19,114 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 1,676 | 69.49 | 24,442 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 6,900 | 69.49 | 100,627 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 1,807 | 55.36 | 31,470 | | Stock Options Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | | 11,963 | 55.36 | 208,344 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 1,190 | | | 51,610 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 4,110 | | | 178,251 | | RSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | | | | 5,810 | | | 251,980 | | RSUs Annual Award | 5/4/2023 | | | | | | | 13,160 | | | 553,904 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 295 | 1,112 | 2,224 | | | | 38,974 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 2,176 | 8,210 | 16,420 | | | | 535,850 | | PSUs Promotion and Market Adjustment Award | 5/2/2023 | | | | 3,079 | 11,620 | 23,240 | | | | 719,139 | | PSUs Annual Award | 5/4/2023 | | | | 3,487 | 13,160 | 26,320 | | | | 664,027 | | PBP Plan | | 211,375 | 422,750 | 845,500 | | | | | | | |

  50. 2023 Grants of Plan-Based Awards

    Key: RSUs – Restricted Stock Units; PSUs – Performance Stock Units; PBP – Performance-Based Pay Plan The amounts reported in this column reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of the Company’s financial statements and may not be representative of the value eventually realized by the executive. For a discussion of the assumptions and methodologies used to value the awards reported in this column, please see the discussion of stock awards and option awards contained in Note 13 (Stock-Based Compensation Plans) to the Company’s Consolidated Financial Statements, included as part of the Company’s 2023 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. PSUs and RSUs granted in 2021 and 2022 to NEOs were subject to clawback in connection with CARES Act restrictions. Grants of PSUs, RSUs and Options were granted. See the CARES Act section above for additional information.

  51. Outstanding Equity Awards at 2023 Fiscal Year End

    Outstanding Equity Awards at 2023 Fiscal Year End The following table presents information regarding the outstanding equity awards held by each of the NEOs as of December 31, 2023, including the vesting dates for the portions of these awards that had not vested as of that date.

  52. Outstanding Equity Awards at 2023 Fiscal Year End

    | | Stock Options | | | | | Stock Awards | | | | | Name | Award Date | Number of Securities Underlying Unexer- cised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expir- ation Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (1) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested (1) ($) | | Ben Minicucci | | | | | | | | | | | | 5/12/2014 | 2,230 | 0 | 48.945 | 5/12/2024 | | | | | | | 2/10/2015 | 9,861 | 0 | 65.370 | 2/10/2025 | | | | | | | 2/9/2016 | 12,000 | 0 | 65.630 | 2/9/2026 | | | | | | | 2/14/2017 | 10,130 | 0 | 96.300 | 2/14/2027 | | | | | | | 2/13/2018 | 24,230 | 0 | 66.890 | 2/13/2028 | | | | | | | 10/2/2018 | 680 | 0 | 66.260 | 10/2/2028 | | | | | | | 2/14/2019 | 28,690 | 0 | 66.570 | 2/14/2029 | | | | | | | 2/11/2020 | 24,382 | 8,128(2) | 64.550 | 2/11/2030 | | | | | | | 11/5/2020 | 12,700 | 0 | 39.180 | 11/5/2030 | | | | | | | 11/5/2020 | 30,486 | 20,324(3) | 39.180 | 11/5/2030 | 7,884(3) | 308,028 | | | | | 2/25/2021 | 15,570 | 15,570(4) | 65.560 | 2/25/2031 | | | | | | | 2/7/2022 | 8,952 | 26,858(5) | 55.360 | 2/7/2032 | 8,475(5) | 331,118 | | | | | 5/2/2023 | | | | | 19,215(6) | 750,730 | 30,220(10) | 1,180,695 | | | 5/4/2023 | | | | | 39,160(7) | 1,529,981 | 39,160(10) | 1,529,981 | | Shane Tackett | | | | | | | | | | | | 2/10/2015 | 925 | 0 | 65.370 | 2/10/2025 | | | | | | | 2/9/2016 | 1,750 | 0 | 65.630 | 2/9/2026 | | | | | | | 2/14/2017 | 1,860 | 0 | 96.300 | 2/14/2027 | | | | | | | 8/3/2017 | 780 | 0 | 84.990 | 8/3/2027 | | | | | | | 2/13/2018 | 7,740 | 0 | 66.890 | 2/13/2028 | | | | | | | 9/10/2018 | 3,770 | 0 | 68.150 | 9/10/2028 | | | | | | | 2/14/2019 | 15,180 | 0 | 66.570 | 2/14/2029 | | | | | | | 2/11/2020 | 17,062 | 5,688(2) | 64.550 | 2/11/2030 | | | | | | | 11/5/2020 | 8,470 | 0 | 39.180 | 11/5/2030 | | | | | | | 2/9/2021 | 9,075 | 9,075(8) | 55.740 | 2/9/2031 | | | | | | | 2/7/2022 | 4,407 | 13,223(5) | 55.360 | 2/7/2032 | 3,770(5) | 147,294 | | | | | 5/2/2023 | | | | | | | | | | | 5/2/2023 | | | | | 10,910(6) | 426,254 | 14,880(10) | 581,362 | | | 5/4/2023 | | | | | 18,060(7) | 705,604 | 18,060(10) | 705,604 |

  53. Outstanding Equity Awards at 2023 Fiscal Year End

    | | Stock Options | | | | | Stock Awards | | | | | Name | Award Date | Number of Securities Underlying Unexer- cised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Option Exercise Price ($) | Option Expir- ation Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested (1) ($) | Equity Incentive Plan Awards: Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested (1) ($) | | Andrew Harrison | | | | | | | | | | | | 2/11/2014 | 840 | 0 | 38.755 | 2/11/2024 | | | | | | | 5/12/2014 | 1,500 | 0 | 48.945 | 5/12/2024 | | | | | | | 2/10/2015 | 3,145 | 0 | 65.370 | 2/10/2025 | | | | | | | 2/9/2016 | 5,483 | 0 | 65.630 | 2/9/2026 | | | | | | | 2/14/2017 | 7,410 | 0 | 96.300 | 2/14/2027 | | | | | | | 2/13/2018 | 17,660 | 0 | 66.890 | 2/13/2028 | | | | | | | 2/14/2019 | 20,280 | 0 | 66.570 | 2/14/2029 | | | | | | | 2/11/2020 | 17,062 | 5,688(2) | 64.550 | 2/11/2030 | | | | | | | 11/5/2020 | 8,470 | 0 | 39.180 | 11/5/2030 | | | | | | | 2/9/2021 | 9,075 | 9,075(8) | 55.740 | 2/9/2031 | | | | | | | 2/7/2022 | 4,407 | 13,223(5) | 55.360 | 2/7/2032 | 7,440(5) | 290,681 | 13,570(10) | 530,180 | | | 5/2/2023 | | | | | 7,240(6) | 282,867 | 1,310(10) | 51,182 | | | 5/4/2023 | | | | | 17,020(7) | 664,971 | 17,020(10) | 664,971 | | Kyle Levine | | | | | | | | | | | | 2/10/2015 | 1,570 | 0 | 65.370 | 2/10/2025 | | | | | | | 2/9/2016 | 1,640 | 0 | 65.630 | 2/9/2026 | | | | | | | 2/14/2017 | 1,750 | 0 | 96.300 | 2/14/2027 | | | | | | | 2/13/2018 | 4,130 | 0 | 66.890 | 2/13/2028 | | | | | | | 2/14/2019 | 4,700 | 0 | 66.570 | 2/14/2029 | | | | | | | 2/11/2020 | 5,550 | 1,850(2) | 64.550 | 2/11/2030 | | | | | | | 11/5/2020 | 2,540 | 0 | 39.180 | 11/5/2030 | | | | | | | 2/9/2021 | 1,815 | 0 | 55.740 | 2/9/2031 | | | | | | | 2/7/2022 | 1,927 | 5,298(5) | 55.360 | 2/7/2032 | | | | | | | 5/2/2023 | 1,815 | 3,630(6) | 55.740 | 5/2/2033 | 6,150(6) | 240,281 | 6,510(10) | 254,346 | | | 5/2/2023 | | 485(6) | 55.360 | 5/2/2033 | | | | | | | 5/4/2023 | | | | | 7,740(7) | 302,402 | 7,740(10) | 302,402 | | | 11/2/2023 | | | | | 14,570(9) | 569,250 | | | | Constance von Muehlen | | | | | | | | | | | | 2/13/2018 | 3,930 | 0 | 66.890 | 2/13/2028 | | | | | | | 1/21/2019 | 90 | 0 | 64.860 | 1/21/2029 | | | | | | | 2/14/2019 | 5,690 | 0 | 66.570 | 2/14/2029 | | | | | | | 2/11/2020 | 2,585 | 0 | 64.550 | 2/11/2030 | | | | | | | 11/5/2020 | 2,540 | 0 | 39.180 | 11/5/2030 | | | | | | | 4/3/2021 | 1,484 | 0 | 69.490 | 4/3/2031 | | | | | | | 5/2/2023 | 1,292 | 1,293(6) | 64.550 | 5/2/2033 | 9,920(6) | 387,574 | 11,620(10) | 453,993 | | | 5/2/2023 | 3,546 | 5,030(6) | 69.490 | 5/2/2033 | | | | | | | 5/2/2023 | 3,442 | 10,328(6) | 55.360 | 5/2/2033 | | | | | | | 5/4/2023 | | | | | 13,160(7) | 514,161 | 13,160(10) | 514,161 |

  54. Outstanding Equity Awards at 2023 Fiscal Year End

    The dollar amounts shown in these columns are determined by multiplying the number of restricted stock or performance stock units, respectively, by $39.07 (the closing price of Alaska Air Group stock on 12/29/23, the last trading day of the year). (2) The unvested options under the 2/11/20 grant are scheduled to fully vest on 2/11/24. (3) The unvested options which were awarded to Mr. Minicucci on 11/5/20 are scheduled to vest as follows: 10,162 on 11/5/24 and 10,162 on 11/5/25. The RSUs which were awarded to Mr. Minicucci on 11/5/20 are scheduled to become fully vested as follows: 3,942 on 11/5/24 and 3,942 on 11/5/25. (4) The unvested options awarded to Mr. Minicucci on 2/25/21 are scheduled to vest as follows: 7,785 on 2/25/24 and 7,785 on 2/25/25. (5) The RSUs awarded on 2/7/22 are scheduled to fully vest on 2/7/25. The unvested options under the 2/7/22 grant are scheduled to vest as follows: Mr. Minicucci – 8,953 on 2/7/24 on 8,952 on 2/7/25 and 8,953 on 2/7/26; Mr. Tackett – 4,408 on 2/7/24; 4,407 on 2/7/25; and 4,408 on 2/7/26; Mr. Harrison – 4,408 on 2/7/24; 4,407 on 2/7/25; and 4,408 on 2/7/26; and Mr. Levine – 1,928 on 2/7/24 and 1,564 on 2/7/25 and 1,806 on 2/7/26. The unvested options under the 5/2/2023 grants are scheduled to vest as follows: Mr. Levine - 1,815 at $55.74 per share on 2/9/24, 1,794 at $55.74 per share on 2/9/2025, 21 at $55.74 per share on 2/9/2025, 363 at $55.36 per share on 2/7/2025 and 122 at $55.36 per share on 2/7/2026; Ms. von Muehlen - 1,293 at $64.55 per share on 2/11/24, 2,515 at $69.49 per share on 4/3/24 and 2,515 at $69.49 per share on 4/3/25, 3,443 at $55.36 per share on 2/7/24, 3,442 at $55.36 per share on 2/7/25, 3,443 at $55.36 per share on 2/7/26,. The RSUs awarded on 5/2/23 are scheduled to fully vest as follows: Mr. Minicucci - 12,580 on 2/25/24 and 6,635 on 2/7/2025; Mr. Tackett - 7,240 on 2/9/2024 and 3,670 on 2/7/25; Mr. Harrison - 7,240 on 2/9/24; Mr. Levine - 2,900 on 2/9/24 and 3,250 on 2/7/25; and Ms. von Muehlen - 4,110 on 4/3/24 and 5,810 on 2/7/25. The RSUs awarded on 5/4/23 are scheduled to fully vest on 5/4/26. The unvested options awarded to Mr. Tackett and Mr. Harrison on 2/9/2021 are scheduled to vest as follows: 4,537 on 2/9/2024 and 4,538 on 2/9/2025. (9) The RSUs awarded on 11/2/23 to Mr. Levine are scheduled to fully vest as follows 4,856 on 11/2/24; 4,857 on 11/2/25; and 4,857 on 11/2/26. (10) The PSUs reported in this column are eligible to vest based on the Company’s performance over three-year periods as described in the Compensation Discussion and Analysis above. In each case ,the PSUs are reported in the table assuming performance at the target level. The PSUs granted on 2/7/22 are eligible to vest based on the goals set for a three-year performance period ending 12/31/24; The PSUs granted on 5/2/23 are eligible to vest based on the goals set for a three-year performance period ending on 12/31/2024. The PSUs granted on 5/4/2023 are eligible to vest based on the goals set for a three-year performance period ending 12/31/25.

  55. 2023 Option Exercises and Stock Vested

    2023 Option Exercises and Stock Vested The following table presents information regarding the exercise of stock options by the NEOs during 2023 and the vesting during 2023 of other stock awards previously granted to the NEOs.

  56. 2023 Option Exercises and Stock Vested

    | | Option Awards | | Stock Awards | | | | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise (1) ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting (1) ($) | | Ben Minicucci | — | — | 42,008 | 1,709,294 | | Shane Tackett | — | — | 24,235 | 1,016,228 | | Andrew Harrison | — | — | 24,235 | 1,016,228 | | Kyle Levine | — | — | 8,907 | 356,875 | | Constance von Muehlen | — | — | 9,284 | 357,102 |

  57. 2023 Option Exercises and Stock Vested

    The amounts shown in Value Realized on Exercise column above for option awards are determined by multiplying the number of exercised shares by the difference between the per-share closing price of the Company’s common stock on the date of exercise and the exercise price of the options. The amounts shown in Value Realized Upon Vesting column above for stock awards are determined by multiplying the number of vested units by the per-share closing price of the Company’s common stock on the vesting date.

  58. 2023 Nonqualified Deferred Compensation

    2023 Nonqualified Deferred Compensation The following table presents information regarding the contributions to and earnings on the NEOs’ balances under the Company’s nonqualified deferred compensation plans during 2023, and also shows the total deferred amounts for the NEOs as of December 31, 2023. The Alaska Air Group, Inc. Nonqualified Deferred Compensation Plan (NDCP) provides the NEOs and other key employees with an opportunity to elect to defer a portion of or all of their annual Performance-Based Pay payments. Participants under the nonqualified deferred compensation plan have the opportunity to elect to have earnings credited on their NDCP accounts based on the performance of several investment funds, which generally mirror the funds offered under the relevant Company 401(k) plan (“401(k) Plan”). Subject to applicable tax laws, amounts deferred under the nonqualified plan are generally distributed on termination of the participant’s employment, although participants may elect an earlier distribution date and may elect payment in a lump sum or installments. Deferrals under the plan are also reflected on the table below. The NEOs also participate in the Defined Contribution OSRP Plan (DC OSRP), which is supplemental retirement plan portion of the NDCP. Under the DC OSRP, the Company contributes a percentage of the eligible compensation of Mr. Minicucci, Mr. Tackett, Mr. Harrison, Mr. Levine and Ms. von Muehlen, as defined in DC OSRP documents, minus the maximum legal Company contribution that the Company made, or could have made, under the 401(k) Plan.

  59. 2023 Nonqualified Deferred Compensation

    | Name | Plan Name | Executive Contributions in Last FY ($) | Registrant Contributions in Last FY (1) ($) | Aggregate Earnings in Last FY ($) | Aggregate Withdrawals/ Distributions ($) | Aggregate Balance at Last FYE ($) | | Ben Minicucci | Nonqualified Deferred Compensation Plan | — | 130,870 | 94,596 | — | 1,233,162 | | Shane Tackett | Nonqualified Deferred Compensation Plan | — | 90,702 | 64,285 | — | 757,834 | | Andrew Harrison | Nonqualified Deferred Compensation Plan | — | 83,797 | 100,332 | — | 1,156,308 | | Kyle Levine | Nonqualified Deferred Compensation Plan | — | 25,788 | 19,687 | — | 190,549 | | Constance von Muehlen | Nonqualified Deferred Compensation Plan | — | 29,229 | 32,823 | — | 326,282 |

  60. 2023 Nonqualified Deferred Compensation

    The amounts in this column represent contributions by the Company to the executive’s account made during 2023. These amounts were determined with reference to the executive’s annual incentives awarded for 2022 and have previously been reported in the Summary Compensation Table as 2022 compensation for the executive, except for Mr. Levine who was not an NEO prior to 2023.

  61. Potential Payments Upon Change in Control and Termination

    Potential Payments Upon Change in Control and Termination The Company has entered into change-in-control agreements with Messrs. Minicucci, Tackett, Harrison Levine, and Ms. von Muehlen. Under these agreements, if a change of control occurs, a guaranteed employment period of three years would go into effect for the CEO and executive vice presidents and two years for Mr. Levine who is a senior vice president. During the employment period, these executives would be entitled to: the highest monthly salary the executive received at any time during the 12-month period preceding the change in control; • an annual incentive payment equal to the higher of the executive’s target Performance-Based Pay Plan incentive or the average of the executive’s annual incentive payments for the three years preceding the year in which the change in control occurs; and • age and service credit under our qualified and non-qualified defined benefit retirement plans; • fringe benefits that are at least as favorable as those in which the executive was participating prior to the change in control. If the executive’s employment is terminated by the Company or its successor without cause or by the executive for good reason during the employment period (or, in certain circumstances, if such a termination occurs prior to and in connection with a change in control), the executive would be entitled to receive: • compensation equal to the value of the payments and benefits identified above that the executive would have received had he or she continued to be employed for the entire employment period paid in a lump sum; and • certain fringe benefits, including lifetime travel benefits for the executive and eligible family members. The amount an executive would be entitled to receive upon a qualifying termination within the employment period after the change in control would be reduced on a pro-rata basis for any time the executive was employed by the successor during the employment period. If change in control benefits under the new agreements exceed the threshold amount that would trigger an excise tax under Section 280G of the Internal Revenue Code, the executive would receive the larger of the following amounts: (1) The “safe harbor amount,” which is equal to the highest level at which the excise tax would not be triggered; or (2) The full change in control benefits if, after receipt of the full change in control benefits and payment of the excise tax, the after-tax amount is greater than the safe harbor amount from #1. In addition, the executive’s outstanding and unvested stock options, restricted stock units and the target number of performance stock units would become vested under the terms of our equity plans. Under the 2016 Performance Incentive Plan, awards will not vest in connection with a change in control unless a termination of employment without cause or for good reason also occurs or an acquirer does not assume outstanding awards. Finally, the executive’s unvested benefits under the Supplementary Retirement Plan would vest on a change in control whether or not the executive’s employment was terminated. The outstanding equity awards held by the executives as of December 31, 2023, are described above under the Outstanding Equity Awards at Fiscal Year End section of this Proxy Statement and each executive’s accrued benefits under our retirement plans are described above under “Pension and Other Retirement Plans.” In the event of an involuntary termination without cause, severance benefits that may be offered to executives are outlined by the Alaska Air Group, Inc. Executive Severance Benefits Guidelines (Amended and Restated April 30, 2022) and detailed below. The benefits outlined here and reflected in the “Termination Without Cause” table below are guidelines; they do not create any rights in favor of any officer or employee, and they remain subject to the discretion of the Committee. If the value of the executive’s severance arrangements exceeds a certain level (2.99 times the sum of the executive officer’s base salary plus the average value of earned short-term incentive pay plan bonuses measured over the prior three years), the Company will seek shareholder ratification of such arrangements. Potential benefits include: In the event of an involuntary termination not-for-cause, severance benefits that may be offered to executives are outlined by the Alaska Air Group, Inc. Executive Severance Benefits Guidelines (Amended and Restated April 30, 2022) and detailed below. The benefits outlined here and reflected in the “Termination Without Cause” table below are guidelines; they do not create any rights in favor of any officer or employee, and they remain subject to the discretion of the Committee. If the value of the severance arrangements exceeds a certain level, the Company will seek shareholder ratification of such arrangements. Potential benefits include: one-time cash payment calculated as an applicable compensation multiple (2x for the CEO and 1.5x for other NEOs) times the base salary and the average value of the executive’s earned short-term incentive pay plan bonuses measured over the prior three years plus the applicable compensation multiple times employer-paid contributions in the preceding twelve months to the executive’s health insurance plans effective at time of termination; • travel benefits calculated as the applicable compensation multiple times the annual average of the executive’s on-line leisure travel over the prior three calendar years; • contracted outplacement services of a value not to exceed $25,000; and • any consideration offered in relation to outstanding equity awards will be based on the applicable award agreements, the circumstances of the separation, the age and tenure of the executive, and any other factors deemed relevant in the Committee’s discretion.

  62. CEO Pay Ratio

    CEO Pay Ratio We are providing the following information about the relationship of the median annual total compensation of the Company’s employees and the annual total compensation of Mr. Minicucci, the Company’s CEO, pursuant to Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K. For 2023, the Company’s last completed fiscal year: • the median of the annual total compensation of all employees of the Company (other than the CEO) was $68,690; and • the annual total compensation of the CEO was $10,326,531 (which includes the Promotion and Market Adjustment Grant described in more detail in the CD&A section). Based on this information, for 2023 the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all employees was 150.3 to 1. The Company believes this ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. As described in the CD&A above, the CEO received a Promotion and Market Adjustment Grant in 2023 to make up for equity awards that had been granted to the CEO in 2020, 2021 and 2022 and were forfeited back to the Company without vesting in order to comply with the limits on executive compensation imposed by the CARES Act. If the value of this equity grant is removed from the CEO’s 2023 compensation, the ratio of annual total compensation of the CEO to median of the annual total compensation of all employees would be 87.1 to 1. The Company believes this is a more accurate reflection of the CEO’s 2023 compensation as the value of these earlier awards that were clawed back were already reported as compensation for the CEO in each of 2020, 2021 and 2022 in our prior proxy statements (including for purposes of this CEO Pay Ratio section in each of those years). To identify the median of the annual total compensation of all company employees for 2023, we used the following methodology, assumptions and estimates: Selection of Determination Date. SEC rules require the Company to select a date within the last three months of the fiscal year. We selected December 31, 2023 as the date upon which the median employee would be identified. Determination of Adjusted Employee Population. We determined that, as of December 31, 2023, the employee population for purposes of this disclosure, after taking into consideration certain adjustments permitted by SEC rules (as described below), consisted of 25,652 individuals. This population includes all employees, whether employed on a full-time, part-time, temporary or seasonal basis. However, as permitted under SEC rules, we excluded non-U.S. employees as they make up less than 5% of the Company’s total employee population. As of December 31, 2023, the Company’s subsidiaries employed 47 employees in Canada, 1 employee in the Bahamas, 1 employee in Belize, 1 employee in Costa Rica, 1 employee in Guatemala, and 115 employees in Mexico, as compared to a total global employee population of 25,818 (i.e., 25,652 U.S., 166 non-U.S.). The Company did not employ any other non-U.S. employees as of December 31, 2023. Identification of Median Employee. To identify the median employee from the Company’s adjusted employee population outlined above, after excluding the CEO, we compared the amount of gross earnings of these employees as reflected in payroll records. We identified the median employee using this compensation measure, which was consistently applied to all employees included in the calculation. We then identified the employee whose wages fell at the midpoint of the distribution. Calculation of Annual Total Compensation. Once the median employee was identified, all of the elements of such employee’s compensation for 2023 were combined in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K (i.e., the same rules used to determine the CEO's total compensation for 2023 as reported in the Summary Compensation Table), resulting in annual total compensation of $68,690, including the estimated value of such employee’s non-discriminatory benefits (estimated for the employee and such employee’s eligible dependents at $8,924). The Company believes the methodology, assumptions and estimates described above to be reasonable given the specific employee population. Companies are permitted under SEC rules to exercise a degree of flexibility in determining the methodology used to comply with the requirements of this disclosure. As acknowledged by the SEC, this flexibility could reduce the comparability of disclosed pay ratios across companies. Therefore, the pay ratio may not necessarily be representative of or comparable to pay ratios disclosed by other companies in the airline industry or otherwise.

  63. Pay vs. Performance

    Pay vs. Performance

  64. Pay vs. Performance Table Discussion and Analysis

    Pay vs. Performance Table Discussion and Analysis In accordance with Item 402(v) of Regulation S-K, we are providing the following information regarding the relationship between the total compensation of our principal executive officer (PEO) and our other named executive officers (referred to as Non-PEO NEOs) and our financial performance for the fiscal years shown in the table. For further information on our pay-for-performance philosophy and how our executive compensation aligns with the Company’s performance, refer to the Compensation Discussion and Analysis section of this proxy statement.

  65. Pay vs. Performance Table

    Pay vs. Performance Table

  66. Pay vs. Performance Table

    | | | | | | | | Value of Initial Fixed $100 Investment Based On: | | | | | Year | Summary Compensation Table Total for PEO #1(1&2) | Summary Compensation Table Total for PEO #2(1&2) | Compensation Actually Paid to PEO #1(1,3&4) | Compensation Actually Paid to PEO #2(1,3&4) | Average Summary Compensation Table Total for Non-PEO NEOs(5) | Average Compensation Actually Paid to Non-PEO NEOs(6) | Total Shareholder Return(7) | Peer Group Total Shareholder Return(8) | Net Income (millions)(9) | Company Selected Measure (Adjusted Pre-Tax Margin)(10) | | 2023 | N/A | $10,313,054 | $0 | $7,007,555 | $4,607,575 | $3,478,775 | $57.99 | $61.60 | $235 | 7.50% | | 2022 | N/A | $6,487,981 | $0 | $3,004,559 | $3,000,762 | $1,834,114 | $63.74 | $48.04 | $58 | 7.60% | | 2021 | $873,333 | $5,130,162 | $1,027,753 | $2,381,082 | $2,442,646 | $1,254,528 | $77.34 | $74.23 | $478 | -5.60% | | 2020 | $6,077,957 | N/A | $1,571,752 | $0 | $2,768,356 | $1,278,102 | $77.19 | $75.55 | ($1,324) | -49.10% |

  67. Pay vs. Performance Table

    (1) PEOs and NEOs included in these columns reflect the following:

  68. Pay vs. Performance Table

    | Year | PEO #1 | PEO #2 | Non-PEO NEOs | | 2023 | | Mr. Minicucci | Mr. Tackett, Mr. Harrison, Mr. Levine, Ms. von Muehlen | | 2022 | | Mr. Minicucci | Mr. Tackett, Mr. Harrison, Ms. Schneider, Ms. Von Muehlen | | 2021 | Mr. Tilden | Mr. Minicucci | Mr. Tackett, Mr. Harrison, Ms. Schneider, Ms. von Muehlen | | 2020 | Mr. Tilden | | Mr. Minicucci, Mr. Tackett, Mr. Pedersen, Mr. Harrison, Mr. Beck |

  69. Pay vs. Performance Table

    (2) Amounts reflect the total compensation for our PEOs, as reported in the Summary Compensation Table for the applicable fiscal year. (3) The following table details the total equity award adjustments for each applicable year, including the amounts added (or subtracted, as applicable) for each PEO and non-PEO NEOs, as computed in accordance with Item 402(v). In general, the adjustments for equity awards provided in Item 402(v) are as follows: • Subtract the amounts reported in the “Stock Awards” and “Option Awards” columns of the Summary Compensation Table for the applicable fiscal year, • Add the fiscal year-end value of option and stock awards granted in the covered fiscal year which were outstanding and unvested at the end of the covered fiscal year, • Add the change in value (which may be a negative number) as of the end of the covered fiscal year as compared to the value at the end of the prior fiscal year for option and stock awards which were granted in prior fiscal years and were outstanding and unvested at the end of the covered fiscal year, • Add the vesting date value of option and stock awards which were granted and vested during the same covered fiscal year, • Add the change in value (which may be a negative number) as of the vesting date as compared to the value at the end of the prior fiscal year for option and stock awards which were granted in prior fiscal years and vested in the covered fiscal year, • Subtract as to any option and stock awards which were granted in prior fiscal years and were forfeited during the covered fiscal year, the value of such awards as of the end of the prior fiscal year, Plus the dollar value of any dividends or other earnings paid during the covered fiscal year on outstanding and unvested awards. Plus, as to any option or stock award that was materially modified during the covered fiscal year, the amount by which the value of the award as of the date of the modification exceeds the value of the original award on the modification date (none of the option or stock awards held by the named executive officers were materially modified during the fiscal years covered by the table). In making each of these adjustments, the “value” of an option or stock award is the fair value of the award on the applicable date determined in accordance with FASB ASC Topic 718 using the valuation assumptions we then used to calculate the fair value of our equity awards. For more information on the valuation of our equity awards, please see the notes to our financial statements that appear in our Annual Report on Form 10-K each fiscal year and the footnotes to the Summary Compensation Table that appears in our annual Proxy Statement.

  70. Pay vs. Performance Table

    | | PEO 2: Mr. Minicucci | NEO Average | | | 2023 | 2023 | | Summary Compensation Table Total | $10,313,054 | $4,607,575 | | Less: Reported Fair Value of Equity Awards (a) | $7,969,932 | $3,194,857 | | Add: Year-End Fair Value of Equity Awards Granted in the Year (b) | $4,611,257 | $1,860,697 | | Add: Fair Value as of Vesting Date of Equity Awards Granted and Vested in the Year(b) | $707,792 | $388,908 | | Add: Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the Year | $(131,207) | $1,425 | | Add: Change in Fair Value of Outstanding and Unvested Equity Awards | $(428,813) | $(123,831) | | Less: Fair Value at the End of the Prior Year of Equity Awards that Failed to Meet Vesting Conditions in the Year | $0 | $0 | | Less: Reported Change in the Actuarial Present Value of Pension Benefits (c) | $94,596 | $61,142 | | Add: Service Cost and Prior Service Cost for Pension Benefits (d) | $0 | $0 | | Compensation Actually Paid | $7,007,555 | $3,478,775 |

  71. Pay vs. Performance Table

    (a) Amounts include the grant date fair value of equity awards granted in the year. More details on clawbacks and equity awards are available in the CD&A Section. (b) Amounts include year-end fair value of equity awards granted in the year. More details on clawbacks and equity awards are available in the CD&A Section. (c) Amounts reflect the changes in the actuarial present value of pension benefits, as reported in the Summary Compensation Table. (d) As described in the Retirement Benefits/Deferred Compensation section above, the tax-qualified defined benefit plan was frozen on January 1, 2014 at its then-current benefit levels and no associated service costs have been incurred since that date. Amounts reflect $0 of the actuarial present value of each named executive officer’s benefit under all such plans attributable to services rendered during the covered fiscal year, and $0 of the entire cost of benefits granted (or credit for benefits reduced) in the plan amendment (or initiation) during the covered fiscal year that are attributed by the benefit formula to services rendered in periods prior to the amendment. (4) Amounts reflect the “compensation actually paid” (CAP) to our PEOs, as computed in accordance with Item 402(v) of SEC Regulation S-K. As provided in Item 402(v), the adjustments in the table below were made to each PEO’s total compensation reported in the Summary Compensation Table for each year to determine the compensation actually paid to each PEO for purposes of this disclosure. (5) Amounts reflect the average compensation for our non-PEO NEOs, as reported in the Summary Compensation Table for the applicable fiscal year. (6) Amounts reflect the average CAP to our Non-PEO NEOs, as computed in accordance with Item 402(v) of SEC Regulation S-K. As provided in Item 402(v), the adjustments in the table below were made to average the Non-PEO NEO's total compensation reported in the Summary Compensation Table for each year to determine the average compensation actually paid to Non-PEOs for purposes of this disclosure. The amounts in this column assume the investment of $100 in December 31, 2019 on Alaska Air Group’s common shares traded on the NYSE and the reinvestment of all dividends since that date. The amounts in this column assume the investment of $100 on December 31, 2019 in the NYSE ARCA Airline Index and the reinvestment of all dividends since that date. The peer group index used was updated from the Dow Jones U.S. Airlines Index to be consistent with our 10-K. In comparison, the value of $100 invested in the Dow Jones U.S. Airlines Index would be the following: 2023: $56.39; 2022: $53.09; 2021: $67.94; 2020: $69.23. Amounts reflect Alaska Air Group’s net income as reported in our audited financial statements for the applicable year. (10) Amounts reflect Alaska Air Group’s adjusted pre-tax margin for each fiscal year. While we use numerous financial and non-financial performance measures to evaluate performance under our compensation programs, adjusted pre-tax margin is the financial performance measure that, in Alaska Air Group’s assessment, represents the most important performance measure (that is not otherwise required to be disclosed in the table) used to link compensation actually paid to the NEOs to company performance for the most recently completed fiscal year. See Appendix A for the calculation of adjusted pre-tax margin. The assumptions used in calculating the fair value of the equity awards did not differ in any material respect from the assumptions used to calculate the grant date fair value of the awards as reported in the Summary Compensation Table, except that the fair value calculations of (i) the unvested options used an estimated term between 2.08 years and 8.78 years in 2023, as compared to an estimated term of 5.6 years used to calculate the grant date fair value of such awards, and (ii) the PSUs assumed payout multipliers at current expectations, which range from 0% to 112% across different grant years and metrics, in each case as compared to the grant date fair value calculations which assumed a payout at target. Most Important Company Performance Measures for Determining Executive Compensation. In accordance with Item 402(v) requirements, we are providing the following unranked list of the financial performance measures used by Alaska Air Group we consider most important to link the compensation actually paid to the NEOs to company performance during fiscal year 2023: • Adjusted Pre-Tax Margin • Relative TSR • ROIC Pay vs. Performance Table Discussion and Analysis. In accordance with Item 402(v) requirements, we are providing the following charts to describe the relationships between information presented in the Pay vs. Performance table. The following charts show the relationship between the compensation actually paid to our NEOs and the Company's financial performance, in each case presented in the tables below: 1) TSR of both Alaska Air Group and the NYSE ARCA Airline Index; 2) Alaska Air Group’s Net Income; and 3) Alaska Air Group’s Adjusted Pre-Tax Margin.

  72. Pay vs. Performance Table

    | AUDIT COMMITTEE MATTERS |