DEF 14A of American Airlines Group Inc., Apr 25, 2024

DEF 14A of American Airlines Group Inc.

Filed Apr 25, 2024 · FY20230001193125-24-114008

Open on EDGAR

  1. 2024 Director Nominees (Proposal 1)

    2024 Director Nominees (Proposal 1) Our director nominees have demonstrated their commitment to diligently execute their fiduciary duties on behalf of our stockholders, and we recommend that our stockholders elect each of the nominees shown in the chart below at the Annual Meeting.

  2. 2024 Director Nominees (Proposal 1)

    | Name | Age | Director Since | Principal Occupation | Independent | AC | CC | CGPRC | FC | SC | | Adriane M. Brown | 65 | 2021 | Managing Partner at Flying Fish Partners; former President and Chief Operating Officer at Intellectual Ventures Management; former President and Chief Executive Officer of Honeywell Transportation Systems | ✓ | M | | | | C | | John T. Cahill | 66 | 2013 | Vice Chairman of The Kraft Heinz Company; former Chairman and Chief Executive Officer of Kraft Foods Group and of The Pepsi Bottling Group | ✓ | M | | | M | | | Michael J. Embler | 60 | 2013 | Private investor; former Chief Investment Officer of Franklin Mutual Advisers | ✓ | | | | M | M | | Matthew J. Hart | 72 | 2013 | Former President and Chief Operating Officer of Hilton Hotels; former Chief Financial Officer of Hilton Hotels | ✓ | C | | | | M | | Robert D. Isom CEO | 60 | 2022 | Chief Executive Officer and President of American Airlines Group Inc. and American Airlines, Inc. | ✖ | | | | | | | Susan D. Kronick | 72 | 2015 | Former Operating Partner at Marvin Traub Associates; former Vice Chairman of Macy’s | ✓ | | | M | | M | | Martin H. Nesbitt | 61 | 2015 | Co-Chief Executive Officer of The Vistria Group; former President and Chief Executive Officer of PRG Parking Management | ✓ | M | | C | | | | Denise M. O’Leary | 66 | 2013 | Private venture capital investor; former General Partner at Menlo Ventures | ✓ | | C | | M | | | Vicente Reynal | 49 | 2022 | Chairman, Chief Executive Officer and President of Ingersoll Rand | ✓ | | M | M | | | | Gregory D. Smith Independent Chairman | 57 | 2022 | Former Executive Vice President and Chief Financial Officer of The Boeing Company | ✓ | | | | | | | Douglas M. Steenland | 72 | 2020 | Senior Advisor to The Blackstone Group; Former President and Chief Executive Officer of Northwest Airlines Corporation | ✓ | | M | | C | |

  3. 2024 Director Nominees (Proposal 1)

    | AC = Audit Committee | FC = Finance Committee | | CC = Compensation Committee | M = Member | | CGPRC = Corporate Governance and Public Responsibility Committee SC = Safety Committee | C = Committee Chair |

  4. 2024 Director Nominees (Proposal 1)

    | The Board unanimously recommends that the stockholders vote “FOR” each of the nominees shown in the chart above. |

  5. 2024 Director Nominees (Proposal 1)

    | iv | |

  6. Approval of Executive Compensation (Proposal 3)

    Approval of Executive Compensation (Proposal 3) Our executive compensation program is heavily performance-based and directly linked with our established goals of delivering record operational results, continuing to close our margin gap with our largest competitors, and reducing total debt by $15 billion by the end of 2025. Our 2023 long-term incentive program (“LTIP”) incorporated both performance- and time-vesting components, with half of the target value consisting of the performance-vesting component. The performance-vesting component is tied to attainment of total debt reduction (50% weighting) and relative pre-tax income margin improvement versus our industry peers (50% weighting). The performance-vesting component of the 2023 LTIP will be earned, if at all, following the completion of a three-year performance period. The 2023 performance-based short-term incentive program (“STIP”) was designed to align management with our goals to run a reliable operation and to return to profitability as we emerged from the COVID-19 pandemic while building on our momentum on diversity, equity and inclusion. As more fully described under the “Compensation Discussion and Analysis” section, in making 2023 compensation decisions, the Compensation Committee continued to consider concerns related to the need to retain and create appropriate incentives for our management team against the backdrop of significant reductions in compensation during the pandemic.

  7. Approval of Executive Compensation (Proposal 3)

    | What We Do | What We Do NOT Do | | ✓ 91% of CEO’s Annual Target Compensation is At-Risk and 74% is in the form of Long-term Equity Incentives that foster alignment with stockholders. ✓ Link Pay to Performance with performance goals tied to improving the reliability, profitability and accountability of our operations to create long-term stockholder value. ✓ Performance-Based Long-term Equity Incentives with a Three-year Performance Period to promote long-term focus. ✓ Independent Compensation Consultant that is directly engaged by the Compensation Committee to advise on executive and director compensation matters. ✓ Robust Stock Ownership Guidelines that align our executive officers’ long-term interests with those of our stockholders. ✓ Annual Compensation Risk Assessment to identify any elements of our compensation program design or oversight processes that carry elevated levels of adverse risk. ✓ Minimum Vesting Requirements. Subject to limited exceptions, no awards granted under our equity plan may vest until the first anniversary of the date of grant. ✓ Clawback Policy that mandates recoupment of erroneously awarded incentive compensation to executive officers on accounting restatement consistent with SEC and Nasdaq requirements and goes beyond by providing the Compensation Committee with discretion to recover additional compensation paid under the Company’s STIP, LTIP and other equity incentive awards based on circumstances. ✓ Extensive Stockholder Engagement to solicit investor feedback on our compensation program. | ✖ No Guaranteed Bonuses. Our executive officers’ bonuses are 100% performance-based. ✖ No Active Executive Retirement Plans. We do not maintain any active executive-only or supplemental retirement plans. ✖ No Hedging or Pledging of our Stock. We prohibit our executive officers from engaging in hedging transactions or using our stock as collateral for loans. ✖ No Excise Tax Gross-Ups. We do not provide gross ups on excise taxes in connection with a change in control. ✖ No Excessive Perquisites. Perquisites and other personal benefits are in line with industry standards. ✖ No Payouts of Dividends on Unvested Awards. Unless and until an award’s vesting conditions are satisfied, no dividends or dividend equivalents accrued on the award are paid. ✖ No Repricing of Awards Without Stockholder Approval. Under our equity plan, awards may not be repriced without stockholder approval if the effect would be to reduce the exercise price for the shares underlying the award. |

  8. Election of Directors

    Election of Directors Upon the recommendation of the CGPR Committee, the Board has nominated the 11 director candidates listed below under the section “Director Nominees.” Each nominee is currently a director of the Company. The authorized number of directors is currently set at 12 and the Board currently consists of 12 members. Mr. Benjamin will not stand for re-election at the Annual Meeting. The Board has approved reducing the authorized number of directors to 11 effective as of the Annual Meeting. If elected as a director at the Annual Meeting, each of the nominees will serve a one-year term expiring at the 2025 annual meeting of stockholders and until his or her successor has been duly elected and qualified. Each of the nominees has consented to serve as a director, if elected.

  9. Election of Directors

    | The Board unanimously recommends that the stockholders vote “FOR” the proposal to elect each director of the Company listed below under the section “Director Nominees” for a one-year term expiring at the 2025 annual meeting of stockholders and until his or her successor has been duly elected and qualified. |

  10. Election of Directors

    | 6 | |

  11. Director Nominees

    Director Nominees Information regarding our director nominees, including their qualifications and principal occupations, as well as the key experience and qualifications that led the Board to conclude each nominee should serve as a director, is provided below. The categories of key skills are: There are no family relationships among the directors and our executive officers.

  12. Director Nominees

    | Independent Director Since: 2021 Committees: Audit, Safety (Chair) Key Skills and Experience: | Adriane Brown Select Business Experience: • Managing Partner of Flying Fish Partners, a technology-based venture capital firm (2018-Present) • President and Chief Operating Officer of Intellectual Ventures Management, LLC, a private equity firm (2010-2017) • Various roles, including President and Chief Executive Officer of Honeywell Transportation Systems, at Honeywell International Inc., a manufacturing company (1999-2010) • Various roles, most recently Vice President and General Manager of Environmental Products, at Corning Incorporated, a materials manufacturing company (1980-1999) Current Public Company Directorships: • KKR & Co. Inc., a global investment company (2021-Present) • Axon Enterprise, Inc., a law-enforcement technology company (2020-Present) • eBay Inc., an e-commerce marketplace company (2017-Present) Past Public Company Directorships: • Allergan plc (2017-2020) • Raytheon Company (2018-2020) • Harman International (2013-2017) Other Leadership Experience and Service: Member of the board of directors of the International Women’s Forum; former member of the board of directors of the Washington Research Foundation/WRF Capital. Key Experience/Director Qualifications: Financial expertise, risk management experience, extensive experience as a senior operating executive for segments of large global public companies, including industrial and manufacturing companies, investment experience in technologies and service as a public company director. |

  13. Director Nominees

    | | 7 |

  14. Director Nominees

    | Independent Director Since: 2013 Committees: Audit; Finance Key Skills and Experience: | John Cahill Select Business Experience: • Vice Chairman of The Kraft Heinz Company (“Kraft Heinz”), a food and beverage company (2015-Present) • Chairman and Chief Executive Officer of Kraft Foods Group, Inc. (“Kraft Foods Group”), until its merger with H.J. Heinz Company (2014-2015) • Non-Executive Chairman of Kraft Foods Group (March 2014-December 2014) • Executive Chairman of Kraft Foods Group (2012-2014) • Executive Chairman, North American Grocery of Kraft Foods, Inc., the former parent of Kraft Foods Group (January 2012-December 2012) Current Public Company Directorships: • Kraft Heinz, a food and beverage company (2015-Present) • Colgate-Palmolive Company, a consumer products company (2005-Present) Past Public Company Directorships: • Kraft Foods Group (2012-2015) • Legg Mason, Inc. (2009-2014) • The Pepsi Bottling Group, Inc. (1999-2007) • Frontier Holdings, Inc. (1984-1985) Other Leadership Experience and Service: Former Industrial Partner at Ripplewood Holdings LLC; spent nine years with The Pepsi Bottling Group, Inc., culminating in the position of Chairman and Chief Executive Officer; and worked at PepsiCo, Inc. for nine years in a variety of leadership positions. Key Experience/Director Qualifications: Leadership and operations experience in executive leadership roles at global public companies, as well as airline experience, investment, accounting and financial expertise, experience in consumer products industries and public company board and corporate governance experience. |

  15. Director Nominees

    | 8 | |

  16. Director Nominees

    | Independent Director Since: 2013 Committees: Finance; Safety Key Skills and Experience: | Mike Embler Select Business Experience: • Chief Investment Officer of Franklin Mutual Advisers, LLC (“Franklin Mutual Advisers”), an asset management company (2005-2009) • Head of Franklin Mutual Advisers’ Distressed Investment Group (2001-2005) Current Public Company Directorships: • NMI Holdings, Inc., a mortgage insurance provider (2012-Present) • Ventas, Inc., a healthcare REIT (2022- Present) Past Public Company Directorships: • Taubman Centers, Inc., a shopping mall REIT (2018-2020) • CIT Group Inc. (2009-2016) • Dynegy Inc. (2011-2012) • AboveNet Inc. (2003-2012) • Kindred Healthcare Inc. (2001-2008) Other Leadership Experience and Service: Worked at Nomura Holding America Inc. for almost a decade in positions of increasing responsibility culminating in the position of Managing Director; former member of the board of trustees of The Mohonk Preserve; and holds certificates in Cyber Risk Oversight (National Association of Corporate Directors) and Environmental Conservation and Sustainability (Earth Institute Center for Environmental Sustainability). Key Experience/Director Qualifications: Experience in finance, asset management and restructurings, capital markets and capital management, experience as a senior executive, perspective as an institutional investor, success as an investor and service as a director of global public and private companies. |

  17. Director Nominees

    | | 9 |

  18. Director Nominees

    | Independent Director Since: 2013 Committees: Audit (Chair); Safety Key Skills and Experience: | Matt Hart Select Business Experience: • President and Chief Operating Officer of Hilton Hotels Corporation (“Hilton”), a hotel developer and operator, until its acquisition by a private equity firm (2004-2007) • Executive Vice President and Chief Financial Officer of Hilton (1996-2004) Current Public Company Directorships: • AMH (formerly American Homes 4 Rent), a REIT (2012-Present) • Air Lease Corporation, an aircraft leasing company (2010-Present) Past Public Company Directorships: • B. Riley Financial, Inc. (2009-2015) • US Airways Group, Inc. (2006-2013) • Kilroy Realty Corporation (1997-2008) • America West Holdings Corporation (2004-2005) Other Leadership Experience and Service: Former Senior Vice President and Treasurer of The Walt Disney Company; former Executive Vice President and Chief Financial Officer of Host Marriott Corp.; member of the Advisory Board of INTELITY, Inc.; and member of the board of directors of Heal the Bay and Conrad N. Hilton Foundation. Key Experience/Director Qualifications: Financial expertise, risk management experience, extensive experience as a senior operating and finance executive for large global public companies, including companies in the consumer travel industry, investment and mergers and acquisitions experience, service as a public company director and airline experience. |

  19. Director Nominees

    | 10 | |

  20. Director Nominees

    | Chief Executive Officer Director Since: 2022 Key Skills and Experience: | Robert Isom Select Business Experience: • Chief Executive Officer of AAG and American (2022-Present) • President of AAG and American (2016-Present) • Executive Vice President and Chief Operating Officer of AAG and American (2013-2016) • Executive Vice President and Chief Operating Officer of US Airways Group, Inc. and US Airways, Inc. (2007-2013) Current Public Company Directorships: • AAG (2022-Present) Past Public Company Directorships: • Pinnacle Airlines Corporation (2003-2005) Other Leadership Experience and Service: Prior to joining US Airways, Mr. Isom held senior executive finance, commercial, operations, strategy and international roles at GMAC, LLC, Northwest Airlines and America West Airlines. He started his career at The Procter & Gamble Company. Mr. Isom serves as a board member of Airlines for America and as a member of the oneworld Governing Board, as well as a member of the Fort Worth Economic Development Partnership Board and the Civic Committee of the Commercial Club of Chicago. Key Experience/Director Qualifications: Financial, airline, marketing, human resources and labor relations experience, as well as nearly 30 years of experience in the airline industry; over 20 years of experience as an airline senior executive; and safety, sustainability and risk management experience. |

  21. Director Nominees

    | Independent Director Since: 2015 Committees: CGPR; Safety Key Skills and Experience: | Sue Kronick Select Business Experience: • Operating Partner at Marvin Traub Associates, a New York based retail consulting firm (2012-2022) • Vice Chairman of Macy’s, Inc. (“Macy’s”), owner of Macy’s and Bloomingdales retail department stores (2003-2010) • Group President, Regional Department Stores of Macy’s (2001-2003) • Chairman and Chief Executive Officer of Burdines/Macy’s Florida (1997-2001) Current Public Company Directorships: • Hyatt Hotels Corporation, a hospitality company (2009-Present) Past Public Company Directorships: • The Pepsi Bottling Group, Inc. (1999-2010) Other Leadership Experience and Service: Member of the board of directors of the John S. and James L. Knight Foundation and the Miami City Ballet. Key Experience/Director Qualifications: Financial, marketing and operational expertise, as well as experience serving as a global public company director and building industry leading brands as a result of the various executive management positions held with Macy’s. |

  22. Director Nominees

    | | 11 |

  23. Director Nominees

    | Independent Director Since: 2015 Committees: Audit; CGPR (Chair) Key Skills and Experience: | Marty Nesbitt Select Business Experience: • Co-Chief Executive Officer of The Vistria Group, LLC, a private-equity investment firm (2013-Present) • President and Chief Executive Officer of PRG Parking Management (PRG), an owner and operator of off-airport parking facilities (1996-2012) Current Public Company Directorships: • Chewy, Inc., an online retailer for pet needs (2020-Present) • Center Point Energy, Inc., a public utility company (2018-Present) Past Public Company Directorships: • Jones Lang LaSalle Incorporated, a public commercial real estate company (2011-2021) • Pebblebrook Hotel Trust (2009-2010) • Norfolk Southern Corporation (2013-2018) Other Leadership Experience and Service: Former member of the board of directors of PRG; former officer of the Pritzker Realty Group, L.P.; former Vice President and Investment Manager at LaSalle Partners, one of the predecessor corporations of Jones Lang LaSalle Incorporated; Trustee of Chicago’s Museum of Contemporary Art; and Chairman of the Barack Obama Foundation. Key Experience/Director Qualifications: Executive leadership, operational, financial and investment experience, as well as global public company board experience. |

  24. Director Nominees

    | Independent Director Since: 2013 Committees: Compensation (Chair); Finance Key Skills and Experience: | Denise O’Leary Select Business Experience: • Private venture capital investor (1997-Present) • Partner (1987-1996) and associate (1983-1987) at Menlo Ventures, a venture capital firm Current Public Company Directorships: • Medtronic plc, a medical technology company (2000-Present) Past Public Company Directorships: • Calpine Corporation (2009-2018) • US Airways Group, Inc. (2005-2013) • Chiron Corporation (2002-2006) • America West Holdings Corporation (1998-2005) Other Leadership Experience and Service: Chair Emerita of the board of trustees of the University of Denver; member of the Board of Regents of the Smithsonian Institution; and former member of the boards of directors of the following private entities: International Environmental Standards, Galvanize, Inc., the Bonfils-Stanton Foundation, Lucile Packard Children’s Hospital, Stanford Hospital & Clinics, Smithsonian National Board, the Denver Foundation, the Corporation for Supportive Housing, Connect for Health Colorado and the University of Colorado Hospital Authority. Key Experience/Director Qualifications: Executive leadership experience in the investment industry, financial expertise, experience in the oversight of risk management, human resources expertise, extensive service as a global public company director, success as an investor and airline industry expertise. |

  25. Director Nominees

    | 12 | |

  26. Director Nominees

    | Independent Director Since: 2022 Committees: Compensation; CGPR Key Skills and Experience: | Vicente Reynal Select Business Experience: • Chairman of the board of directors of Ingersoll Rand Inc. (“Ingersoll”) (2021-Present) • Chief Executive Officer and President of Ingersoll (2020-Present) • Chief Executive Officer and President of Gardner Denver Inc. (“Gardner Denver”) (2017-2020) • President, Chief Executive Officer—Industrials Segment of Gardner Denver (2015-2016) • Various roles, including Group President at Danaher Corporation, a design and manufacturing company (2004-2015) • Vice President Global Operations and Supply Chain at Thermo Fisher Scientific Inc., a scientific instrumentation company (2002-2004) • Business Unit Manager, Aerospace Aftermarket at Honeywell Transportation Systems, a manufacturing company (1998-2002) Current Public Company Directorships: • Ingersoll Rand Inc., an industrial manufacturing company (2020-Present) Past Public Company Directorships: • Gardner Denver Inc. (2017-2020) Other Leadership Experience and Service: Member of the board of directors of Ownership Works. Key Experience/Director Qualifications: Executive leadership experience in the industrial, energy and medical industries, extensive strategic, operational and general management experience, as well as experience serving as a public company director. |

  27. Director Nominees

    | Independent Chairman of the Board Director Since: 2022 Key Skills and Experience: | Greg Smith Select Business Experience: • Chief Financial Officer and Executive Vice President of Enterprise Operations of The Boeing Company (“Boeing”) (2020-2021; 2012-2021); Interim Chief Executive Officer of Boeing (2019-2020); Vice President of Finance and Corporate Controller of Boeing (2010-2012); and Vice President of Financial Planning and Analysis of Boeing (2008-2010) • Vice President of Investor Relations of Raytheon Company (2004-2008) Current Public Company Directorships: • Intel Corporation, a technology company (2017-Present) Other Leadership Experience and Service: Member of the boards of directors of the Lurie Children’s Hospital Foundation, Northwestern Memorial Healthcare and Sierra Nevada Space. Key Experience/Director Qualifications: Financial expertise and extensive experience as a senior executive for a large global public company, risk management experience, extensive industry experience as executive officer of airplane manufacturer, extensive experience as a global business leader, with experience in regulatory affairs, as well as experience serving as a public company director. |

  28. Director Nominees

    | | 13 |

  29. Director Nominees

    | Independent Director Since: 2020 Committees: Compensation; Finance (Chair) Key Skills and Experience: | Doug Steenland Select Business Experience: • Senior Advisor to The Blackstone Group L.P. (2009-Present) • Chief Executive Officer of Northwest Airlines Corporation (2004-2008) • President of Northwest Airlines Corporation (2001-2004) • Senior Partner of law firm that is now DLA Piper LLP (1984-1991) Current Public Company Directorships: • Hilton Worldwide Holdings, Inc., a hotel management company (2010-Present) Past Public Company Directorships: • American International Group, Inc., an insurance company (2009-2023) • London Stock Exchange Group (2021-2023) • Performance Food Group (2012-2019) • Travelport LLC (2012-2019) Other Leadership Experience and Service: Member of the board of trustees of the Brookings Institute, board of directors of the Middle East Investment Initiative and board of visitors of the Duke University Fuqua Business School; former Chairman of the Air Transport Association. Key Experience/Director Qualifications: Former airline president and CEO, extensive experience as a global business leader, with experience in finance, safety, restructuring and regulatory affairs, as well as experience serving as a public company director. |

  30. Director Nominees

    | 14 | |

  31. Director Nominees

    BOARD COMPOSITION

  32. Policy on Audit Committee Pre-Approval

    | (1) Beneficial ownership as reported in the table has been determined in accordance with SEC rules and regulations and includes restricted stock units (“RSUs”) that vest within 60 days of April 9, 2024. Pursuant to SEC rules and regulations, all shares not currently outstanding that are subject to RSUs that vest within 60 days of April 9, 2024, are deemed to be outstanding for the purpose of computing “Percent of Class” held by the holder of the class but are not deemed to be outstanding for the purpose of computing the “Percent of Class” held by any other stockholder. |

  33. Policy on Audit Committee Pre-Approval

    | (2) Includes 912,782 shares held directly. Excludes 2,324,740 unvested RSUs that will not vest within 60 days of April 9, 2024. |

  34. Policy on Audit Committee Pre-Approval

    | (3) Includes 754,777 shares held directly. Excludes 813,910 unvested RSUs that will not vest within 60 days of April 9, 2024. |

  35. Policy on Audit Committee Pre-Approval

    | (4) Includes 207,482 shares held directly and 56,557 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. Excludes 421,737 unvested RSUs that will not vest within 60 days of April 9, 2024. |

  36. Policy on Audit Committee Pre-Approval

    | (5) Includes 94,596 shares held directly and 56,557 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. Excludes 396,215 unvested RSUs that will not vest within 60 days of April 9, 2024. |

  37. Policy on Audit Committee Pre-Approval

    | (6) Includes 14,971 shares held directly and 68,539 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. Excludes 439,798 unvested RSUs that will not vest within 60 days of April 9, 2024. |

  38. Policy on Audit Committee Pre-Approval

    | (8) Includes 17,951 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  39. Policy on Audit Committee Pre-Approval

    | (10) Includes 59,358 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  40. Policy on Audit Committee Pre-Approval

    | (11) Includes 65,964 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  41. Policy on Audit Committee Pre-Approval

    | (12) Includes 42,123 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  42. Policy on Audit Committee Pre-Approval

    | (13) Includes 42,123 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  43. Policy on Audit Committee Pre-Approval

    | (14) Includes 117,412 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  44. Policy on Audit Committee Pre-Approval

    | (15) Includes 8,548 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  45. Policy on Audit Committee Pre-Approval

    | (16) Includes 12,547 shares held directly, 140 shares held indirectly for the benefit of Mr. Smith’s Family Trusts and 24,407 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  46. Policy on Audit Committee Pre-Approval

    | (17) Includes 19,276 shares held directly and 10,460 shares underlying unvested RSUs that vest within 60 days of April 9, 2024. |

  47. Board Diversity and Tenure

    Board Diversity and Tenure Our Board believes that diversity is an important aspect of an effective board. The CGPR Committee seeks to recommend individuals to the Board with, among other things, a diversity of skills, experience, expertise and perspective appropriate for the business and operation of the Company. We recognize the benefits of racial and gender diversity in the

  48. Board Diversity and Tenure

    | | 29 |

  49. Board Diversity and Tenure

    boardroom, including better reflecting our diverse customer and employee base and the healthy debate that stems from different viewpoints that may result from diverse backgrounds. Accordingly, our Board is diverse in many ways, with differing geographic, business and racial backgrounds. Over 45% of our Board nominees are diverse based on gender or ethnicity. We believe that fresh perspectives and new ideas are critical to a forward-looking and strategic Board. At the same time, given the extremely complex nature of our business, it is equally important to benefit from the valuable experience and institutional knowledge that longer-serving directors bring to the boardroom. In September 2022, Mr. Reynal joined our Board. Mr. Reynal was identified to the Company by a third-party search firm. Previously, in January and March 2022, respectively, Mr. Smith and Mr. Isom joined our Board, and prior to that in October 2020 and February 2021, respectively, Mr. Steenland and Ms. Brown joined our Board and in November 2015, Ms. Kronick and Mr. Nesbitt joined our Board. Our remaining directors joined our Board in December 2013 at the effective date of the merger with US Airways. The Board strongly believes that the current mix of directors provides the Company with an appropriate balance of knowledge, experience and capability, allowing us to leverage deep company experience and knowledge in addition to new viewpoints and innovative ideas among newer directors. Out of our 11 Board nominees, six have served on our Board for ten or fewer years and another five have been on our Board for less than five years.

  50. Risk Assessment with Respect to Compensation Practices

    | • | Formulaic annual and long-term incentive plan awards with maximum pay-out caps or guidelines instead of discretionary pay-out decisions. |

  51. Risk Assessment with Respect to Compensation Practices

    | • | Equity incentive awards are subject to performance- or time-based vesting periods that are intended to incentivize long-term rather than short-term results. |

  52. 2023 Engagement Feedback

    | Name | Fees Earned or Paid in Cash ($)(a) | Stock Awards ($)(b) | All Other Compensation ($)(c) | Total ($) | | Jim Albaugh(d) | 65,000 | - | 217,293 | 282,293 | | Jeff Benjamin | 130,000 | 150,000 | 40,748 | 320,748 | | Adriane Brown | 140,000 | 150,000 | 11,184 | 301,184 | | John Cahill | 139,890 | 150,000 | 32,568 | 322,458 | | Mike Embler | 140,000 | 150,000 | 26,482 | 316,482 | | Matt Hart | 147,500 | 150,000 | 23,180 | 320,680 | | Sue Kronick | 140,000 | 150,000 | 20,414 | 310,414 | | Marty Nesbitt | 140,000 | 150,000 | 46,592 | 336,592 | | Denise O’Leary | 150,000 | 150,000 | 13,350 | 313,350 | | Doug Parker(d) | 500,000 | - | 291,021 | 791,021 | | Vicente Reynal | 115,000 | 150,000 | 31,652 | 296,652 | | Ray Robinson(d) | 65,000 | - | 433,103 | 498,103 | | Greg Smith | 109,890 | 350,000 | 46,808 | 506,698 | | Doug Steenland | 140,000 | 150,000 | 17,630 | 307,630 |

  53. 2023 Engagement Feedback

    | (b) The amounts represent the aggregate grant date fair value, as calculated in accordance with Accounting Standards Codification (“ASC”) Topic 718, of (i) 10,460 RSUs granted to each non-employee director, other than Messrs. Albaugh, Parker and Robinson, on May 10, 2023, with a grant date fair value of $150,000, which will vest on May 10, 2024, subject to the continued service of the director through the vesting date and (ii) 13,947 additional RSUs granted to Mr. Smith on May 10, 2023, with a grant date fair value of $200,000, for his service as Independent Chairman, which will vest on May 10, 2024, subject to the continued service of the director through the vesting date. The grant date fair value, as calculated in accordance with ASC Topic 718, of time-based RSUs is equal to the number of shares underlying the RSUs, multiplied by the closing price of our Common Stock on the date of grant. As of December 31, 2023, each of our non-employee directors, other than Messrs. Smith and Parker, held 10,460 RSUs. As of December 31, 2023, Mr. Smith held 24,407 RSUs (which includes the additional RSUs granted to him on May 10, 2023) and Mr. Parker held 88,443 performance-vesting RSUs (based on target attainment level), which were granted in his role as Chief Executive Officer and continue to be subject to performance-vesting conditions. No non-employee directors held any other outstanding equity awards. |

  54. Director Compensation

    Director Compensation The Compensation Committee will periodically review the overall compensation of our directors in consultation with the Board and, from time to time, the assistance of the Compensation Committee’s compensation consultant. The Compensation Committee has authority to retain and terminate any outside advisors, such as compensation consultants and legal counsel, and to determine their compensation. Annual Retainers and Grants of RSUs. For 2023, the compensation for our non-employee directors included the following cash-based annual retainers:

  55. Director Compensation

    | • | an annual retainer of $100,000 for service on the Board; |

  56. Director Compensation

    | • | an annual retainer of $15,000 for service on each of the Audit, Compensation, CGPR, Finance or Safety Committees; and |

  57. Director Compensation

    | • | an annual retainer of $25,000 for service as the Chair of the Audit Committee and an annual retainer of $20,000 for service as the Chair of each of the Compensation, CGPR, Finance or Safety Committees. |

  58. Director Compensation

    On the date of the 2023 annual meeting of stockholders, each continuing non-employee director received a number of RSUs equal to $150,000 divided by the closing price of our Common Stock on the date of the annual meeting. Each of the RSU awards granted to our non-employee directors will vest fully on the earlier of the first anniversary of the date of grant or the date of the next annual meeting of stockholders, subject to the continued service of the non-employee director through the vesting date. In connection with the Board’s CEO succession planning, on June 8, 2022, the Board approved the retainer payable to Mr. Parker for his service as non-employee Chairman of the Board, consisting of a quarterly cash retainer of $250,000, payable in arrears, and a grant of 185,758 RSUs vesting in full upon the earlier of (i) the first anniversary of the date of grant or (ii) the Company’s annual meeting of stockholders in 2023, subject to Mr. Parker’s continued service to the

  59. Director Compensation

    | 40 | |

  60. Director Compensation

    Company through the vesting date or acceleration by the Board in accordance with the terms of the 2013 Plan. The Board determined that this grant was necessary to retain Mr. Parker in the role of Chairman of the Board in order to ensure a successful transition in leadership following the most challenging time in our industry’s history. In February 2023, we announced the retirement of Mr. Parker from the Board on April 30, 2023 and election of Greg Smith as the Company’s Independent Chairman effective April 30, 2023. The Board has approved for Mr. Smith’s service as Independent Chairman an additional annual RSU grant with a grant date fair value of $200,000. Mr. Cahill also received an additional annual retainer of $30,000 for his service as Lead Independent Director through April 30, 2023. Other Compensation. As is customary in the airline industry, we provide our directors with flight benefits. During the period of time they serve on the Board, non-employee directors are entitled to complimentary personal air travel for the non-employee director and his or her immediate family members on American and American Eagle, 12 round-trip or 24 one-way passes for complimentary air travel for the non-employee director’s family and friends each year, as well as American Airlines Admirals Club® membership, and AAdvantage® ConciergeKey(SM) program status. Non-employee directors receive a tax gross-up for imputed taxable income related to these flight benefits. In addition, these travel benefits (except for the tax gross-up) will be provided (i) for a non-employee director’s lifetime if he or she has served as a director for seven or more years or (ii) for five years if he or she has served for less than seven but more than two years. Non-employee directors will also be reimbursed for all reasonable out-of-pocket expenses incurred in connection with attendance at meetings upon submission of receipts. In addition, the company purchases tickets to certain sporting and other events in advance for business purposes. On occasion, unused tickets purchased are made available for personal use by our directors or other employees. These tickets typically result in no incremental cost to the company.

  61. Legacy Director Compensation Programs

    Legacy Director Compensation Programs Following the closing of the merger with US Airways, the America West Directors’ Charitable Contribution Program (the “Charitable Contribution Program”), a legacy director compensation program, continues to be in effect. America West established the Charitable Contribution Program under which all directors of America West were invited to participate. This program was discontinued for new directors following the merger between America West and US Airways in 2005. During 2023, the directors who were participants in the Charitable Contribution Program were Messrs. Hart and Parker and Ms. O’Leary. The charitable contributions will be substantially funded by life insurance proceeds from policies maintained by us on the lives of the participants. Under the terms of the Charitable Contribution Program, America West was allowed to place joint life insurance on two directors. The life insurance policies currently in place under the Charitable Contribution Program are structured as joint policies on the lives of two directors and the insurance benefits are payable at the death of the last survivor. Individual directors derive no direct financial benefit from the Charitable Contribution Program because all insurance proceeds are to be paid by us, and all tax deductions for the charitable contributions accrue solely to us.

  62. Overview

    Overview This section discusses our performance and the principles underlying our compensation policies for our “named executive officers,” who for 2023 were:

  63. Overview

    | – | Robert Isom, our Chief Executive Officer and Director; |

  64. Overview

    | – | Steve Johnson, our Vice Chair and Chief Strategy Officer; |

  65. Overview

    | – | Priya Aiyar, our Executive Vice President and Chief Legal Officer; |

  66. Overview

    | – | Devon May, our Executive Vice President and Chief Financial Officer; and |

  67. Overview

    | – | Vasu Raja, our Executive Vice President and Chief Commercial Officer. |

  68. Overview

    American has executed significant Board and senior leadership team succession since 2021:

  69. Overview

    | – | In December 2021, American announced that Mr. Isom would succeed Doug Parker as CEO, effective March 2022 |

  70. Overview

    | – | Mr. Parker remained Chairman to ensure a successful transition before retiring from the Board in April 2023 |

  71. Overview

    | – | Effective April 2023, Greg Smith was elected as American’s Independent Chairman, succeeding Mr. Parker |

  72. Overview

    | – | In tandem with the CEO transition, American made additional updates to rebuild and retain our broader senior leadership team to lead our next chapter and drive stockholder value: |

  73. Overview

    | • | Mr. Raja was promoted to Senior Vice President and Chief Revenue Officer in June 2020 and to Executive Vice President and Chief Commercial Officer in April 2022 |

  74. Overview

    | • | Mr. May was promoted to Senior Vice President of Finance and Investor Relations in February 2022 and to Executive Vice President and Chief Financial Officer in January 2023 |

  75. Overview

    | • | Ms. Aiyar was promoted to Executive Vice President and Chief Legal Officer in April 2022 |

  76. Overview

    | • | Mr. Johnson was promoted to Vice Chair and Chief Strategy Officer in May 2023 |

  77. Overview

    To successfully lead American through the critical post-pandemic chapter, our leadership team established a targeted list of primary goals to improve the reliability, profitability and accountability of our operations to create long-term stockholder value. We produced exceptionally strong performance in 2023, including:

  78. Reliability

    | – | Reached new, long-term collective bargaining agreements with three of our workgroups, providing those team members with significantly improved wages and other benefits |

  79. Accountability

    | (3) Total available liquidity includes unrestricted cash and short-term investments, and undrawn capacity under our credit facilities. |

  80. Our 2023 executive compensation program is designed to implement our strategy

    Our 2023 executive compensation program is designed to implement our strategy Our executive compensation program is heavily performance-based and directly linked with our established goals of delivering record operational results, continuing to close our margin gap with our largest competitors and reducing total debt by $15 billion by the end of 2025. Our 2023 LTIP for our named executive officers incorporated both performance- and time-vesting components, with half of the target value consisting of the performance-vesting component. The performance-vesting component is tied to attainment of total debt reduction (50% weighting) and relative pre-tax income margin improvement versus our industry peers (50% weighting). The performance-vesting component of the 2023 LTIP will be earned, if at all, following the completion of a three-year performance period. The 2023 performance-based STIP was designed to align management with our goals to run a reliable operation and to return to profitability as we emerged from the COVID-19 pandemic while building on our momentum on diversity, equity and inclusion. Set forth below is each component of the Company’s annual target direct compensation:

  81. Pay-for-Performance Philosophy

    | Named Executive Officer | Base Salary ($) | STIP Target (%) | STIP Target ($) | LTIP Target ($) | Total Target Direct Compensation ($) | | Robert Isom | 1,300,000 | 200% | 2,600,000 | 11,250,000 | 15,150,000 | | Steve Johnson | 850,000 | 150% | 1,275,000 | 3,875,000 | 6,000,000 | | Priya Aiyar | 730,000 | 125% | 912,500 | 2,360,000 | 4,002,500 | | Devon May | 775,000 | 125% | 968,750 | 2,360,000 | 4,103,750 | | Vasu Raja | 775,000 | 125% | 968,750 | 2,860,000 | 4,603,750 |

  82. Commitment to Effective Compensation Governance

    | What We Do | What We Do NOT Do | | ✓ 91% of CEO’s Annual Target Compensation is At-Risk and 74% is in the form of Long-term Equity Incentives that foster alignment with stockholders. ✓ Link Pay to Performance with performance goals tied to improving the reliability, profitability and accountability of our operations to create long-term stockholder value. ✓ Performance-Based Long-term Equity Incentives with a Three-year Performance Period to promote long-term focus. ✓ Independent Compensation Consultant that is directly engaged by the Compensation Committee to advise on executive and director compensation matters. ✓ Robust Stock Ownership Guidelines that align our executive officers’ long-term interests with those of our stockholders. ✓ Annual Compensation Risk Assessment to identify any elements of our compensation program design or oversight processes that carry elevated levels of adverse risk. ✓ Minimum Vesting Requirements. Subject to limited exceptions, no awards granted under our equity plan may vest until the first anniversary of the date of grant. ✓ Clawback Policy that mandates recoupment of erroneously awarded incentive compensation to executive officers on accounting restatement consistent with SEC and Nasdaq requirements and goes beyond by providing the Compensation Committee with discretion to recover additional compensation paid under the Company’s STIP, LTIP and other equity incentive awards based on circumstances. ✓ Extensive Stockholder Engagement to solicit investor feedback on our compensation program. | ✖ No Guaranteed Bonuses. Our executive officers’ bonuses are 100% performance-based. ✖ No Active Executive Retirement Plans. We do not maintain any active executive-only or supplemental retirement plans. ✖ No Hedging or Pledging of our Stock. We prohibit our executive officers from engaging in hedging transactions or using our stock as collateral for loans. ✖ No Excise Tax Gross-Ups. We do not provide gross ups on excise taxes in connection with a change in control. ✖ No Excessive Perquisites. Perquisites and other personal benefits are in line with industry standards. ✖ No Payouts of Dividends on Unvested Awards. Unless and until an award’s vesting conditions are satisfied, no dividends or dividend equivalents accrued on the award are paid. ✖ No Repricing of Awards Without Stockholder Approval. Under our equity plan, awards may not be repriced without stockholder approval if the effect would be to reduce the exercise price for the shares underlying the award. |

  83. Use of Compensation Consultant

    Use of Compensation Consultant For 2023, the Compensation Committee retained Korn Ferry as its independent compensation consultant. The Compensation Committee has sole authority with regard to the decision to retain and the terms of engagement of the compensation consultant. The compensation consultant reports directly to the Compensation Committee with respect to its executive compensation consulting advice. The Compensation Committee has assessed whether the services provided by Korn Ferry or any other relationships created any conflicts of interest pursuant to SEC and Nasdaq rules, and has concluded that no such conflicts of interest exist. During 2023, Korn Ferry provided the following services for or at the request of the Compensation Committee:

  84. Use of Compensation Consultant

    | • | reviewed management’s materials prepared for the Compensation Committee; |

  85. Use of Compensation Consultant

    | • | assisted the Compensation Committee in the design of the executive compensation program, including structure, metric selection, payout opportunities, and establishment of performance targets; |

  86. Use of Compensation Consultant

    | • | benchmarked compensation levels for senior executives and non-executive directors; |

  87. Use of Compensation Consultant

    | • | conducted an annual review of the compensation peer group; |

  88. Use of Compensation Consultant

    | • | attended Compensation Committee meetings; and |

  89. Use of Compensation Consultant

    | • | responded to various other requests from the Compensation Committee. |

  90. Use of Compensation Consultant

    In 2023, in addition to the executive compensation services Korn Ferry performed for or at the request of the Compensation Committee, Korn Ferry provided limited executive search services and broad-based compensation products to the Company.

  91. Use of Market Data

    Use of Market Data In order to ensure a competitive design for our executive compensation program, in 2023, our Compensation Committee, with advice and analysis from its compensation consultant, reviewed our program against those of our largest competitors,

  92. Use of Market Data

    | 48 | |

  93. Use of Market Data

    Delta, United, and Southwest Airlines, with an emphasis on Delta and United, our closest peers. The Compensation Committee also reviewed a broader spectrum of compensation pay data, including survey data consisting of Korn Ferry and Equilar Top 25 including 79 organizations with revenue greater than $15 billion with data for 1,972 incumbents.

  94. Executive Compensation with an Emphasis on Performance-Based Pay

    | • | an annual incentive program paid in cash based on achievement of profitability, operational and diversity, equity and inclusion (“DEI”) targets; and |

  95. Executive Compensation with an Emphasis on Performance-Based Pay

    | • | a long-term equity incentive program in the form of RSUs that incorporate both performance- and time-vesting components. |

  96. Annual Cash Incentive Program

    Annual Cash Incentive Program The second core component of our overall compensation program has been a short-term cash incentive program. The STIP is designed to align management with our goals to run a reliable operation, to return to profitability and to continue to build on our momentum on DEI goals, as summarized further below. The target cash incentive opportunities for each named executive officer are set forth below. Mr. Johnson’s target payout level was increased from 125% to 150% of base salary in connection with his promotion to the Company’s Vice Chair and Chief Strategy Officer. Our other named executive officers’ target cash incentive opportunities remained unchanged from the prior year.

  97. Annual Cash Incentive Program

    | Named Executive Officer | Target Payout Level as a Percentage of Base Salary | | Robert Isom | 200% | | Steve Johnson | 150% | | Priya Aiyar | 125% | | Devon May | 125% | | Vasu Raja | 125% |

  98. Annual Cash Incentive Program

    | | 49 |

  99. 2023 STIP

    2023 STIP Under the 2023 STIP, adjusted pre-tax income (which, under the terms of the STIP, is calculated by excluding net special items, expenses associated with profit sharing and STIP and related payroll taxes and 401(k) company contributions) accounted for 60% of the plan’s weighting, while operational reliability accounted for 30% of the plan’s weighting and DEI accounted for 10% of the plan’s weighting, as set forth below. The Company remains intently focused on profitability and reliability, and the footprint of these two areas continue to comprise 90% of the STIP. To further the Company’s commitment to increasing stockholder value, the Compensation Committee increased focus on profitability, by adjusting the weighting upward from 50% to 60%. The operational component, making up 30% of the STIP, focused on controllable completion factor and on-time departures, the foundational operational metrics that determine reliability. Diversity, equity and inclusion (DEI) engagement and education was implemented as part of the STIP in order to ensure our workplace culture is a competitive advantage that provides team members access to continuous learning, awareness and knowledge.

  100. 2023 STIP

    | Performance Metric | Metric Weighting | | | PROFITABILITY | | Adjusted Pre-tax Income | 60% | | | RELIABILITY | | Mainline Controllable Completion Factor (“CCF”) | 15% | | Mainline On-time Departure (“D-0”) | 5% | | Regional CCF | 7.5% | | Regional D-0 | 2.5% | | | DEI | | Diversity, Equity and Inclusion | 10% |

  101. 2023 STIP

    Threshold, target and maximum goals for adjusted pre-tax income are shown below, along with the associated payouts as a percentage of target. The adjusted pre-tax income goal of $2.5 billion was set in January 2023 following a pre-tax loss excluding net special items of nearly $7 billion in 2021 and our 2022 pre-tax income excluding net special items of $458 million (See Appendix B for a reconciliation of pre-tax income (loss) excluding net special items, a non-GAAP measure).

  102. 2023 STIP

    | | Below- Threshold Performance | Threshold Performance | Target Performance | Maximum Performance | | Adjusted Pre-tax Income | <$1.0 billion | $1.0 billion | $2.5 billion | $4.0 billion | | Payout as a Percentage of Target | 0% | 50% | 100% | 200% |

  103. 2023 STIP

    Any performance falling between threshold, target and maximum levels would result in an adjustment of funding level based on straight-line interpolation. In addition, for any payout under the STIP, the threshold adjusted pre-tax income goal of $1.0 billion would need to be attained. Payouts for the named executive officers were tied solely to our corporate performance. For fiscal year 2023, we attained adjusted pre-tax income of $2.9 billion, an achievement level of 125.1% of target. Adjusted pre-tax income represents pre-tax income for the year ended December 31, 2023, excluding net special items (See Appendix B for a reconciliation of pre-tax income excluding net special items, a non-GAAP measure), expenses associated with profit sharing and the STIP and related payroll taxes and 401(k) company contributions. The Company excludes expenses associated with profit sharing and the STIP from the calculation of adjusted pre-tax income as these items are themselves calculated based on the measure. The STIP goals are established at the beginning of the performance period and account for these adjustments.

  104. 2023 STIP

    | 50 | |

  105. 2023 STIP

    The following table shows actual performance in respect of our operational goals (as a percentage of target levels).

  106. 2023 STIP

    | Operational Performance Goal | Threshold Performance | Target Performance | Maximum Performance | Actual Performance | Achievement Level (as a % of Target) | | Mainline CCF | 99.3% | 99.5% | 99.7% | 99.9% | 200.0% | | Mainline D-0 | 61.0% | 63.0% | 65.0% | 63.3% | 115.8% | | Regional CCF | 99.3% | 99.5% | 99.7% | 99.9% | 200.0% | | Regional D-0 | 69.0% | 71.0% | 73.0% | 75.9% | 200.0% |

  107. 2023 STIP

    We also achieved our DEI goals (weighted 10%) at an achievement level of 200%. Based on these weightings and the actual attainment levels, which were reviewed by a third party internal audit consulting firm, each named executive officer received an STIP award equal to 150.86% of target under the 2023 STIP, resulting in the dollar amounts set forth in the table below.

  108. 2023 STIP

    | Named Executive Officer | 2023 STIP Payout ($) | | Robert Isom | 3,922,360 | | Steve Johnson | 1,787,085 | | Priya Aiyar | 1,376,634 | | Devon May | 1,461,495 | | Vasu Raja | 1,461,495 |

  109. Reporting of STIP Program Payouts

    Reporting of STIP Program Payouts As we disclosed in our proxy statement last year, for 2022 the Compensation Committee re-established the performance-based STIP. In light of the unprecedented business challenges resulting from the COVID-19 pandemic, the 2020 STIP had been terminated and our named executive officers did not participate in the 2021 STIP. Accordingly, no payouts were made under the STIP to our named executive officers for 2020 or 2021. While the Compensation Committee re-established the STIP program for 2022, it reset both the STIP program and the Company’s 2022 profit sharing programs for front-line employees to a 12-month cycle commencing at the end of the first quarter of 2022 and running through the first quarter of 2023. This change was made to incentivize performance beginning at the point in time when the most significant impacts of the pandemic had finally concluded. For 2023, the Compensation Committee resumed our standard calendar year performance-based STIP, reflecting the stabilization of our business following our emergence from the pandemic. In compliance with SEC reporting requirements, payments under both programs, one of which was almost entirely attributable to performance in 2022, are included in the Summary Compensation Table total compensation for 2023. No portion of the payout under either program was included in the Summary Compensation Table total compensation for 2022. As a result, the 2023 Summary Compensation Table includes two STIP payments due to how they fell on the adjusted calendar applied to the programs.

  110. Reporting of STIP Program Payouts

    | | 51 |

  111. 2022 STIP

    2022 STIP For the period from April 1, 2022 through April 1, 2023, the target adjusted pre-tax income goal (weighted 50%) was set at $400 million, at a time when we were just emerging from the pandemic. The goal for this period was set on the heels of very challenging financial results in 2021 and the first quarter of 2022 – a pre-tax loss excluding net special items of nearly $7 billion for fiscal year 2021, and a pre-tax loss excluding net special items of nearly $2 billion for the first fiscal quarter of 2022 (See Appendix B for a reconciliation of pre-tax income (loss) excluding net special items, a non-GAAP measure). For the period from April 1, 2022 through April 1, 2023, we attained adjusted pre-tax income of $2.8 billion, an achievement level of 200% of target. Adjusted pre-tax income represents pre-tax income, excluding net special items, expenses associated with profit sharing and the STIP and related payroll taxes and 401(k) company contributions. The following table shows actual performance in respect of our operational goals (as a percentage of target levels).

  112. 2022 STIP

    | Operational Performance Goal (weighting %) | Threshold Performance | Target Performance | Maximum Performance | Actual Performance | Achievement Level (as a % of Target) | | Mainline CCF (15%) | 99.1% | 99.4% | 99.7% | 99.3% | 92.2% | | Mainline D-0 (15%) | 63.0% | 64.5% | 66.0% | 61.3% | 0.0% | | Regional CCF (5%) | 99.1% | 99.4% | 99.7% | 99.9% | 200.0% | | Regional D-0 (5%) | 69.0% | 70.0% | 71.0% | 74.2% | 200.0% |

  113. 2022 STIP

    We also achieved our DEI goals (weighted 10%) at an achievement level of 144% of target. Based on these weightings and the actual attainment levels, which were reviewed by a third party internal audit consulting firm, each named executive officer received an STIP award equal to 148.3% of target under the 2022 STIP, resulting in the dollar amounts set forth in the table below.

  114. 2022 STIP

    | Named Executive Officer | 2022 STIP Payout ($) | | Robert Isom | 3,855,800 | | Steve Johnson | 1,483,040 | | Priya Aiyar | 1,353,274 | | Devon May | 879,417 | | Vasu Raja | 1,436,695 |

  115. Long-Term Incentive Programs

    Long-Term Incentive Programs The third core component of our overall compensation program is a long-term equity incentive program that focuses our executives on our performance over time and further links their interests with stockholders. Stock-based awards, coupled with performance- and time-vesting requirements, provide an appropriate incentive to our executives to remain with the Company and meet the long-term goal of significantly increasing stockholder value. Consistent with our emphasis on pay-for-performance and our commitment to long-term value creation for our stockholders, our named executive officers’ total target direct compensation is weighted heavily toward long-term equity awards. The Compensation Committee determines the value of long-term equity awards to be granted to an executive officer based upon the executive’s level of responsibility and job classification level and the results of compensation market analyses. Historically, including for 2023, our LTIP included both performance- and time-vesting RSUs, each weighted 50% by target value. Our 2023 LTIP for our named executive officers continued to include both performance-and time-vesting components, with the performance-vesting component weighted 50% by target value tied to attainment of total debt reduction (50% weighting) and relative pre-tax income margin improvement versus our industry peers (50% weighting), as summarized

  116. Long-Term Incentive Programs

    | 52 | |

  117. Long-Term Incentive Programs

    below. The performance goals align to our long-term strategy to improve profitability and reduce total debt by $15 billion by the end of 2025.

  118. 2023 Performance Metrics

    2023 Performance Metrics The total debt reduction metric under our 2023 LTIP reflects the Company’s commitment to stockholders to improve our balance sheet and reduce leverage levels. In 2021, we announced a five-year plan to pay down $15 billion of total debt. The 2023 total debt reduction metric concludes the remaining years (three, four and five) of the five-year plan and requires a reduction of $7 billion. The relative pre-tax income margin improvement metric measures American’s competitive financial performance relative to its peers and requires the Company to continue to narrow the margin gap. Mr. Isom’s 2023 annual target grant value is significantly below the last reported values for the CEOs at Delta (2022) and United (2023), our two closest peers. The values for the other named executive officers were set in connection with their promotions to be competitive with their peers at our competitor airlines.

  119. 2023 Performance Metrics

    | Named Executive Officer | 2023 Annual Target Grant Value ($) | | Robert Isom | 11,250,000 | | Steve Johnson | 3,875,000 | | Priya Aiyar | 2,360,000 | | Devon May | 2,360,000 | | Vasu Raja | 2,860,000 |

  120. 2023 Performance Metrics

    | | 53 |

  121. 2023 Performance Metrics

    In September 2023, the Compensation Committee also granted to Mr. Johnson a one-time promotion grant of 181,554 RSUs valued at $2.4 million in connection with his appointment as the Company’s Vice Chair and Chief Strategy Officer in May 2023. This grant, which vests ratably over three years, was awarded to reflect Mr. Johnson’s leadership during and the Company’s success in enduring and emerging from the pandemic and the significant increase in responsibility associated with his new position. It was intended to create incentives for Mr. Johnson to remain with the Company and to assist with the successful design, implementation and execution of its post-pandemic strategies and the implementation of the management succession plan. In connection with that award, Mr. Johnson entered into an agreement to not compete for 18 months following termination of employment for any reason and irrespective of whether Mr. Johnson would be entitled to severance. In July 2023, the Compensation Committee approved a grant of 39,905 RSUs and 65,323 RSUs to Ms. Aiyar and Mr. Raja, respectively, in connection with the expansion of their roles to Executive Vice President and Chief Legal Officer and Executive Vice President and Chief Commercial Officer, respectively. These grants include both performance-and time-vesting components, with the performance-vesting component weighted 50% by target value tied to attainment of total debt reduction (50% weighting) and relative pre-tax income margin improvement versus our industry peers (50% weighting). See below for a full discussion of Mr. Isom’s 2023 target annual compensation and non-recurring awards and the Compensation Committee’s process.

  122. Equity Grant Policy

    Equity Grant Policy The Compensation Committee has adopted an equity grant policy to standardize the timing, practices and procedures in granting equity awards. The policy provides that equity awards, other than new hire and promotion grants, will be granted once per year at a regularly scheduled meeting of the Compensation Committee. We have made exceptions to our equity grant policy in unique circumstances, such as during the restriction period imposed by the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) and the payroll support agreement under Subtitle A of Title IV of Division N of the Consolidated Appropriations Act, 2021 (“PSP2”) and the payroll support agreement under section 7301 of the American Rescue Plan Act of 2021 (“PSP3,” and collectively, the “CARES Act and related legislation”).

  123. Compensation Reported for Mr. Isom in the 2023 Summary Compensation Table

    | • | Aligning Mr. Isom’s compensation and incentives with Company performance and the interests of our stockholders, recognizing that his long-term incentive compensation had not increased since 2020, notwithstanding his subsequent promotion from President to CEO. |

  124. Compensation Reported for Mr. Isom in the 2023 Summary Compensation Table

    | • | Established Mr. Isom’s 2023 total target annual compensation at $15.2 million to reflect his promotion to CEO, including an annual target LTIP grant of $11.3 million. Approximately 91% of Mr. Isom’s annual target compensation is at risk and half of his 2023 LTIP grant is subject to performance-vesting conditions tied to attaining the Company’s total debt reduction goal and relative pre-tax income margin improvement versus the Company’s industry peers over a three-year performance period. The Compensation Committee determined that these compensation arrangements were appropriate given the significant increase in responsibility associated with his new position, to increase incentives for Mr. Isom to remain with the Company and successfully design, implement and execute our post-pandemic strategies. Mr. Isom’s annual compensation was set at a level $1.7 million below the last-reported annual target compensation of the CEO of Delta (2022). |

  125. Compensation Reported for Mr. Isom in the 2023 Summary Compensation Table

    | • | Granted to Mr. Isom $11.0 million in awards which reflects the difference between Mr. Isom’s new CEO target compensation and the amount of compensation he actually received following his promotion to CEO on March 31, 2022. This amount includes a one-time cash payment of $2.75 million and a one-time grant of 631,699 RSUs valued at $8.25 million, subject to the same terms and conditions and vesting as the 2023 LTIP grant, except that two-thirds of the RSUs are subject to attaining the Company’s total debt reduction goal and relative pre-tax income margin improvement versus the Company’s industry peers. In practical effect, Mr. Isom was paid for service as the Company’s CEO for both 2022 and 2023 during 2023 but in a form that has a significant |

  126. Compensation Reported for Mr. Isom in the 2023 Summary Compensation Table

    | performance-based equity component and will incentivize Mr. Isom to continue to build on the Company’s momentum and strong operating and financial performance for the next three years. Further, the equity-based component provides Mr. Isom an opportunity to increase his ownership of Company stock and further his alignment with stockholders. |

  127. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    Compensation Reported for Ms. Aiyar and Messrs. May and Raja During the CARES restriction period:

  128. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    | • | Mr. Raja was promoted to Senior Vice President and Chief Revenue Officer in June 2020 and to Executive Vice President and Chief Commercial Officer in April 2022. |

  129. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    | • | Mr. May was promoted to Senior Vice President of Finance and Investor Relations in February 2022 and to Executive Vice President and Chief Financial Officer in January 2023. |

  130. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    | • | Ms. Aiyar was promoted to Executive Vice President and Chief Legal Officer in April 2022. |

  131. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    These executives had been identified as key members of our next generation leadership team and each of these promotions was an important element of the Company’s comprehensive senior leadership succession plan. However, we were unable to provide immediate compensation increases or equity awards in connection with their promotions, despite each executive’s total compensation being significantly below their predecessors at American and their peers at Delta and United.

  132. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    | 56 | |

  133. Compensation Reported for Ms. Aiyar and Messrs. May and Raja

    At the time of those promotions, in recognition of the acute retention challenge and the need for each executive to be compensated fairly and appropriately for their new responsibilities, we granted retention awards to Ms. Aiyar and Messrs. May and Raja. Those awards reflected amounts customarily established by the Company for similar promotions and were payable in April 2023 subject to each executive’s continued employment through that date. The amounts paid under those retention awards were consistent with the CARES Act and related legislation limitations and our compensation philosophy. The payments to Ms. Aiyar and Messrs. May and Raja were $1.2 million, $2.4 million and $4.5 million, respectively.

  134. Severance Benefits and Post Termination Restrictive Covenants

    Severance Benefits and Post Termination Restrictive Covenants Change in control and severance benefits are a customary component of executive compensation, which are generally used to reinforce and encourage executives’ continued attention and dedication to their assigned duties without the distraction arising from the possibility of a change in control. Beginning in 2023, following consultation with its independent compensation consultant and in line with market practices, the Compensation Committee approved entering into severance agreements with our executive officers that are triggered on certain involuntary terminations of their employment. These agreements were only entered into with those executives who also agreed to post-termination restrictive covenants to protect the Company and its investors. Messrs. Isom, Johnson and May and Ms. Aiyar have agreed to these post-employment restrictive covenants, including non-competition for a period of 24 months in the case of Mr. Isom and 18 months in the case of the other executives, and non-solicitation for a period of 24 months following the date the executive terminates employment with the Company. These restrictive covenants are in place irrespective of whether these executives receive severance in connection with their termination of employment. Mr. Isom’s severance agreement provides that in the event his employment is terminated by the Company without “cause” or he resigns for “good reason” (each as defined in the severance agreements, and collectively, an “Involuntary

  135. Severance Benefits and Post Termination Restrictive Covenants

    | | 57 |

  136. Severance Benefits and Post Termination Restrictive Covenants

    Termination”), he will be entitled to: (i) a cash severance payment equal to 24 months of his base salary plus two times his annual target cash incentive (payable in substantially equal installments over 24 months), (ii) a payment equal to 24 months’ COBRA premiums and (iii) continued vesting of outstanding equity awards for 24 months following the termination date, except as set forth in Mr. Isom’s grant agreements described below. In addition, Messrs. Johnson and May and Ms. Aiyar have entered into severance agreements that provide that in the event of an Involuntary Termination, the executive will be entitled to: (i) a cash severance payment equal to 18 months of the executive’s base salary plus 1.5 times the executive’s annual target cash incentive (payable in substantially equal installments over 18 months), (ii) a payment equal to 18 months’ COBRA premiums and (iii) continued vesting of outstanding equity awards for 18 months following the termination date, except, in the case of Mr. Johnson, which is subject to acceleration as set forth in his grant agreements described below. The agreements also provide for travel privileges for the executive and eligible family members, pursuant to the terms of the Company’s travel policy for officers during the 18-month period following the termination date. If the executive has become eligible for retiree travel, the executive will continue to be eligible to receive retiree travel privileges in accordance with the terms of our retiree travel policy. Messrs. Isom, Johnson, and May previously vested into lifetime travel benefits. Each severance agreement also provides for acceleration of equity awards in the event of an Involuntary Termination within the 24 month period following a change in control, with equity awards subject to performance-vesting conditions vesting at the greater of target or the expected attainment level based on performance as of the termination date. The severance agreements require entering into an effective release of claims. Pursuant to the grant agreements under our equity incentive plans, our employees, including our named executive officers, are entitled to full acceleration of their RSUs in the event of (i) a termination due to death or “disability” or (ii) a “change in control” (each, as defined in the applicable plan and award agreements). In addition, subject to compliance with the post-employment restrictive covenants and delivery of an effective release of claims, because Mr. Johnson is retirement eligible (age of 55 and has ten or more years of service), under his grant agreements the vesting of each time-vesting RSU award granted to Mr. Johnson will accelerate in full in the event of his separation from service from the Company (other than a termination by the Company for “cause”), with performance-vesting RSUs remaining outstanding and eligible to vest based on actual performance through the end of the performance period. Subject to compliance with the post-employment restrictive covenants and delivery of an effective release of claims, Mr. Isom’s grant agreements provide that RSUs granted to Mr. Isom will remain outstanding and will continue to vest upon termination (not including termination by the Company for “cause”), provided that equity awards granted within 12 months prior to the termination will only remain eligible to vest on a pro-rated basis and performance-vesting RSUs remain subject to the performance conditions. Under the STIP, if an employee separates from service with us and our affiliates while actively employed due to death or disability prior to the payment of the award, but is otherwise eligible for the award, the employee will be treated as having been actively employed on the date of payment of the award. Information on the estimated payments and benefits that our named executive officers would have been eligible to receive in the event of a termination or change in control as of December 31, 2023 pursuant to their equity awards, the STIP and other arrangements are set forth in “Potential Payments Upon Termination or Change in Control” on page 69.

  137. Section 280G/Section 4999 Policy

    Section 280G/Section 4999 Policy We do not provide any tax gross-ups to cover excise taxes under Section 4999 in connection with a change in control.

  138. Section 280G/Section 4999 Policy

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  139. Section 280G/Section 4999 Policy

    REPORT OF THE COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis included in this Proxy Statement. Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and incorporated by reference in our Annual Report on Form 10-K for the year ended December 31, 2023. Respectfully submitted,

  140. Compensation Committee

    Compensation Committee Denise O’Leary (Chair) Jeff Benjamin Vicente Reynal Doug Steenland

  141. Compensation Committee

    | This report of the Compensation Committee is not deemed to be “soliciting material” or to be “filed” with the SEC or subject to the SEC’s proxy rules or the liabilities of Section 18 of the Exchange Act, and the report shall not be deemed to be incorporated by reference into any prior or subsequent filing by us under the Securities Act or the Exchange Act. |

  142. Compensation Committee

    | | 61 |

  143. Compensation Committee

    EXECUTIVE OFFICERS The following table lists AAG’s executive officers as of April 25, 2024, including their ages and principal occupations.

  144. Compensation Committee

    | Name | Age | Title | | Robert D. Isom, Jr | 60 | Chief Executive Officer and Director | | Stephen L. Johnson | 67 | Vice Chair and Chief Strategy Officer | | Priya R. Aiyar | 49 | Executive Vice President and Chief Legal Officer | | Devon E. May | 49 | Executive Vice President and Chief Financial Officer | | Vasu S. Raja | 47 | Executive Vice President and Chief Commercial Officer | | David G. Seymour | 59 | Executive Vice President and Chief Operating Officer |

  145. Compensation Committee

    Below is certain information as of April 25, 2024, regarding our executive officers (other than Robert Isom). For similar information regarding Mr. Isom as of April 25, 2024, see the section entitled “Proposal 1—Election of Directors” beginning on page 6.

  146. Compensation Committee

    | | Stephen L. Johnson | | | Stephen L. Johnson is Vice Chair and Chief Strategy Officer, a position he has held since May 2023. He was most recently Executive Vice President, a position he held since January 2022 and prior to that he served as Executive Vice President—Corporate Affairs, a position he held since December 2013. He also serves on the board of directors and as deputy chair of WIZZ Air Holdings PLC, a European airline company that trades on the London Stock Exchange. Previously, Mr. Johnson served as Executive Vice President—Corporate and Government Affairs for US Airways, a role he began in 2009. From 2003 to 2009, Mr. Johnson was a partner at Indigo Partners LLC, a private equity firm specializing in acquisitions and strategic investments in the airline, air finance and aerospace industries. Between 1995 and 2003, Mr. Johnson held a variety of positions with America West Airlines prior to its merger with US Airways, including Executive Vice President—Corporate. Prior to joining America West Airlines, Mr. Johnson served as Senior Vice President and General Counsel at GPA Group plc. He was also an attorney at Seattle-based law firm Bogle & Gates, where he specialized in corporate and aircraft finance and taxation. | | | Priya R. Aiyar | | | Priya R. Aiyar is Executive Vice President and Chief Legal Officer. She was most recently Senior Vice President and General Counsel, positions she held since September 2019, when she joined AAG. Previously, she was a partner at Willkie Farr & Gallagher LLP, a role she began in September 2017. From 2015 to 2017, Ms. Aiyar was Acting General Counsel at the U.S. Department of Treasury, after having served as the Deputy General Counsel from 2013 to 2015. From 2009 to 2013, Ms. Aiyar held a variety of positions with the U.S. Federal government, including as Deputy General Counsel at the U.S. Department of Energy and Legal Advisor to the Chairman of the Federal Communications Commission. Earlier she was a partner at Kellogg, Huber, Hansen, Todd, Evans & Figel PLLC. She began her legal career as a clerk to Judge Merrick Garland of the U.S. Court of Appeals for the D.C. Circuit and to Justice Stephen Breyer of the U.S. Supreme Court. |

  147. Compensation Committee

    | 62 | |

  148. Compensation Committee

    | | Devon E. May | | | Devon E. May is Executive Vice President and Chief Financial Officer, a position he has held since January 2023. He was most recently Senior Vice President of Finance and Investor Relations, a position he held since 2022. Mr. May has held various roles of increasing responsibility at AAG, including as Senior Vice President, Finance and American Eagle (2020 to 2022), Senior Vice President, American Eagle & Operations Planning (2019 to 2020), Senior Vice President, Network Strategy (2017 to 2019) and Senior Vice President, Finance (2016 to 2017). Mr. May joined AAG in 2013, upon its merger with US Airways, where he held a variety of positions in financial planning and analysis. Between 2002 and 2005, Mr. May held a variety of positions with America West Airlines prior to its merger with US Airways, including as Director, Alliances and Partnerships. Prior to joining America West Airlines, Mr. May served as a Senior Analyst, International Route Planning at Continental Airlines. | | | Vasu S. Raja | | | Vasu S. Raja is Executive Vice President and Chief Commercial Officer. He was most recently Chief Revenue Officer, a position he held since 2020. Mr. Raja has held various roles of increasing responsibility at AAG, including Senior Vice President, Strategy (2019 to 2020), Vice President, Planning (2016 to 2019) and Vice President, Pricing and Yield Management (2015 to 2016). Mr. Raja joined AAG’s predecessor airline in 2004 as an Analyst, Sales Planning and Analysis. Mr. Raja began his career with Teach for America in 1999 and taught for three years in Baltimore City Public Schools. | | | David G. Seymour | | | David G. Seymour is Executive Vice President and Chief Operating Officer. He was most recently Senior Vice President, Operations, a position he held since 2019. From 2016 to 2019, he served as Senior Vice President, Integrated Operations. Previously, he served as Senior Vice President, Technical Operations from 2013 to 2016. Mr. Seymour joined AAG upon its merger with US Airways, where, from 2002 to 2013, he held a variety of positions in operations and planning, including as Senior Vice President, Operations. Between 1999 and 2002, Mr. Seymour held a variety of positions with America West Airlines prior to its merger with US Airways, including as Vice President, Operations Planning and Performance. Mr. Seymour began his career serving as an airborne infantry officer in the U.S. Army. |

  149. Compensation Committee

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  150. Compensation Committee

    EXECUTIVE COMPENSATION

  151. Summary Compensation Table

    Summary Compensation Table The following table provides compensation earned by our named executive officers in the years ended December 31, 2023, 2022 and 2021. See the “Compensation Discussion and Analysis – Non-Recurring Compensation Elements Reported in 2023” section on page 54 for a discussion of the non-recurring compensation elements reported in the Summary Compensation Table for 2023.

  152. Summary Compensation Table

    | Name and Principal Position during Fiscal 2023 | Year | Salary ($) | Bonus ($) | Stock Awards ($)(a) | Non-Equity Incentive Plan Compensation ($)(b) | All Other Compensation ($)(c) | Total* ($) | | Robert Isom | 2023 | 1,300,000 | 2,750,000(d) | 19,500,000 | 7,778,160 | 110,002 | 31,438,162 | | Chief Executive Officer | 2022 | 1,162,083 | - | 3,653,000 | - | 71,566 | 4,886,649 | | and Director | 2021 | 766,146 | - | 4,180,000 | - | 55,214 | 5,001,360 | | Steve Johnson | 2023 | 826,346 | - | 6,046,000 | 3,270,125 | 64,613 | 10,207,084 | | Vice Chair and | 2022 | 735,616 | - | 2,695,000 | - | 63,492 | 3,494,108 | | Chief Strategy Officer | 2021 | 643,624 | - | 2,825,000 | - | 54,701 | 3,523,325 | | Priya Aiyar | 2023 | 693,250 | 1,185,069(e) | 3,101,000 | 2,729,908 | 47,838 | 7,757,065 | | Executive Vice President and Chief Legal Officer | | | | | | | | | Devon May | 2023 | 738,075 | 2,445,527(e) | 2,360,000 | 2,340,912 | 53,788 | 7,938,302 | | Executive Vice President and Chief Financial Officer | | | | | | | | | Vasu Raja | 2023 | 731,250 | 4,468,169(e) | 4,073,000 | 2,898,190 | 47,425 | 12,218,034 | | Executive Vice President and Chief Commercial Officer | | | | | | | |

  153. Summary Compensation Table

    | * As discussed in the “Compensation Discussion and Analysis—Non-Recurring Compensation Elements Reported in 2023,” the total compensation for 2023 set forth above includes for Ms. Aiyar and Messrs. Isom, Johnson and Raja one-time and promotion awards and for Ms. Aiyar and Messrs. May and Raja, non-recurring payments in April 2023 for services performed in prior years. Furthermore, for each named executive officer, the STIP payout for the 2022 program is reflected as compensation for 2023. The table below is identical to the Summary Compensation Table above except that the reported amounts exclude these non-recurring payments. While the table below is not a substitute for, and should be read together with, the Summary Compensation Table above, we believe this presentation better reflects each named executive officers’ regular compensation attributable to their services in 2023. |

  154. Summary Compensation Table

    | Name | Year | Salary ($) | Bonus ($) | Stock Awards ($) | Non-Equity Incentive Plan Compensation ($) | All Other Compensation ($) | Total Regular Compensation ($) | | Robert Isom | 2023 | 1,300,000 | - | 11,250,000 | 3,922,360 | 110,002 | 16,582,362 | | Steve Johnson | 2023 | 826,346 | - | 3,675,000 | 1,787,085 | 64,613 | 6,353,044 | | Priya Aiyar | 2023 | 693,250 | - | 2,360,000 | 1,376,634 | 47,838 | 4,477,722 | | Devon May | 2023 | 738,075 | - | 2,360,000 | 1,461,495 | 53,788 | 4,613,358 | | Vasu Raja | 2023 | 731,250 | - | 2,860,000 | 1,461,495 | 47,425 | 5,100,170 |

  155. Summary Compensation Table

    | (a) Amounts in this column represent the aggregate grant date fair value, as calculated in accordance with ASC Topic 718, of RSUs granted by the Company during each of the fiscal years ending December 31, 2023, 2022 and 2021, respectively, to the named executive officers. The grant date fair value, as calculated in accordance with ASC Topic 718, of time-based RSUs is equal to the number of shares underlying the RSUs, multiplied by the closing price of our Common Stock on the date of grant. With respect to the performance-based RSUs, which were granted in 2023, the grant date fair value is determined based on the closing price of our Common Stock on the date of grant multiplied by a factor reflecting achievement of the probable outcome of the total debt reduction and relative pre-tax income margin improvement versus a pre-defined group of airlines (which was 100%). The aggregate maximum fair value of the 2023 annual performance-based RSU grants assuming the highest level of achievement of the performance conditions is as follows: Mr. Isom: $11,250,000, Mr. Johnson: $3,675,000, Ms. Aiyar: $2,360,000, Mr. May: $2,360,000 and Mr. Raja: $2,860,000. The aggregate maximum fair value of the 2023 one-time and promotion performance-based RSU grants assuming the highest level of achievement of the performance conditions is as follows: Mr. Isom: $11,000,000, Ms. Aiyar: $741,000 and Mr. Raja: $1,213,000. |

  156. Summary Compensation Table

    | 64 | |

  157. Summary Compensation Table

    | (b) The STIP payouts for both the 2022 and 2023 programs are reflected as compensation for 2023 as the performance period for the 2022 STIP ran from April 1, 2022 through April 1, 2023 and the performance period for the 2023 STIP ran from January 1, 2023 through December 31, 2023. Under the 2022 STIP, each named executive officer received a payment as follows: Mr. Isom: $3,855,800, Mr. Johnson: $1,483,040, Ms. Aiyar: $1,353,274, Mr. May: $879,417 and Mr. Raja: $1,436,695. Under the 2023 STIP, each named executive officer received a payment as follows: Mr. Isom: $3,922,360, Mr. Johnson: $1,787,085, Ms. Aiyar: $1,376,634, Mr. May: $1,461,495, and Mr. Raja: $1,461,495. |

  158. Summary Compensation Table

    | (c) The following table provides the amounts of other compensation, including perquisites, paid to, or on behalf of, named executive officers during 2023 included in the “All Other Compensation” column. Perquisites and other personal benefits are valued on the basis of the aggregate incremental cost to the Company, except that flight benefits are valued based on the imputed taxable income to the executive, which valuation is greater than the incremental cost to the Company. |

  159. Summary Compensation Table

    | | Robert Isom ($) | Steve Johnson ($) | Priya Aiyar ($) | Devon May ($) | Vasu Raja ($) | | Flight Privileges(1) | 20,591 | 23,979 | 11,287 | 17,793 | 8,988 | | Medical Examinations | 5,118 | - | 5,436 | - | 9,046 | | Financial Advisory Services | 50,700(3) | 4,500 | 4,500 | 4,500 | 4,500 | | Gross-Up Payments(2) | 15,443 | 17,984 | 8,465 | 13,345 | 6,741 | | 401(k) Company Contributions | 18,150 | 18,150 | 18,150 | 18,150 | 18,150 |

  160. Summary Compensation Table

    | (1) Amounts represent flight privileges provided for unlimited, top-priority reserved travel in any class of service, for the named executive officer and his or her immediate family, and up to 12 round-trip or 24 one-way passes for non-eligible family members and friends. Amounts represent the actual value of travel utilized by those named executive officers and their respective eligible dependents during 2023. |

  161. Summary Compensation Table

    | (2) Amount represents tax gross-up payments with respect to flight privileges. |

  162. Summary Compensation Table

    | (3) Amount includes $46,200 in legal expenses incurred by Mr. Isom in connection with the negotiation of his CEO compensation that were reimbursed by the Company. |

  163. Summary Compensation Table

    | (d) Reflects a one-time cash payment to Mr. Isom. |

  164. Summary Compensation Table

    | (e) Reflects payments under cash retention agreements that were entered into with Ms. Aiyar and Messrs. May and Raja, respectively, in prior years payable subject to each employee’s continued service through April 1, 2023. |

  165. Summary Compensation Table

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  166. Grants of Plan-Based Awards in 2023

    Grants of Plan-Based Awards in 2023 The following table provides information regarding grants of plan-based awards made to our named executive officers during the year ended December 31, 2023.

  167. Grants of Plan-Based Awards in 2023

    | Name | Grant Date | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(a) | | | Estimated Future Payouts Under Equity Incentive Plan Awards | | | All Other Stock Awards: Number of Shares of Stock or Units (#) | Grant Date Fair Value of Stock and Option Awards ($)(b) | | | | Threshold ($) | Target ($) | Maximum ($) | Threshold (#) | Target (#) | Maximum (#) | | | | Robert Isom | | 1,300,000 | 2,600,000 | 5,200,000 | | | | | | | | 9/20/2023 | | | | 107,676 | 430,704 | 861,408(c) | | 5,625,000 | | | 9/20/2023 | | | | 105,283 | 421,133 | 842,266(d) | | 5,500,000 | | | 9/20/2023 | | | | | | | 430,704(e) | 5,625,000 | | | 9/20/2023 | | | | | | | 210,566(f) | 2,750,000 | | Steve Johnson | | 637,500 | 1,275,000 | 2,550,000 | | | | | | | | 9/20/2023 | | | | 35,176 | 140,704 | 281,408(c) | | 1,837,500 | | | 9/20/2023 | | | | | | | 140,704(e) | 1,837,500 | | | 9/20/2023 | | | | | | | 181,554(g) | 2,371,000 | | Priya Aiyar | | 456,250 | 912,500 | 1,825,000 | | | | | | | | 5/2/2023 | | | | 21,423 | 85,693 | 171,386(c) | | 1,180,000 | | | 7/12/2023 | | | | 4,988 | 19,953 | 39,906(d) | | 370,500 | | | 5/2/2023 | | | | | | | 85,693(e) | 1,180,000 | | | 7/12/2023 | | | | | | | 19,952(f) | 370,500 | | Devon May | | 484,375 | 968,750 | 1,937,500 | | | | | | | | 5/2/2023 | | | | 21,423 | 85,693 | 171,386(c) | | 1,180,000 | | | 5/2/2023 | | | | | | | 85,693(e) | 1,180,000 | | Vasu Raja | | 484,375 | 968,750 | 1,937,500 | | | | | | | | 5/2/2023 | | | | 25,962 | 103,848 | 207,696(c) | | 1,430,000 | | | 7/12/2023 | | | | 8,166 | 32,662 | 65,324(d) | | 606,500 | | | 5/2/2023 | | | | | | | 103,848(e) | 1,430,000 | | | 7/12/2023 | | | | | | | 32,661(f) | 606,500 |

  168. Grants of Plan-Based Awards in 2023

    | (a) Reflects potential payouts under the 2023 STIP. |

  169. Grants of Plan-Based Awards in 2023

    | (b) For solely time-based RSU awards and the time-based vesting portion of each named executive officer’s RSU award, the grant date fair value is equal to the number of shares underlying the RSUs, multiplied by the closing price of our Common Stock on the date of grant. For the performance-vesting portion of each named executive officer’s RSU award, the grant date fair value is determined based on the closing price of our Common Stock on the date of grant multiplied by a factor reflecting achievement of the probable outcome of the total debt reduction and relative pre-tax income margin improvement versus a pre-defined group of airlines as applicable (which was 100%). |

  170. Grants of Plan-Based Awards in 2023

    | (c) Represents the performance-vesting portion of the named executive officers’ 2023 annual RSU awards that vest on the third anniversary of the grant date, subject to the executive’s continued service and based on the Company’s achievement of (i) total debt reduction from year-end 2022 to year-end 2025 and (ii) pre-tax income margin improvement relative to the pre-tax income margin improvement for a pre-defined group of airlines based on 2023-2025 pre-tax income margin over a 2019 baseline. The number of shares that will be issued with respect to the performance-vesting RSUs varies between 25% and 200% depending on the Company’s performance, and no shares will be issued if threshold performance is not achieved. |

  171. Grants of Plan-Based Awards in 2023

    | (d) Represents the performance-vesting portion of the named executive officers’ 2023 one-time and promotion RSU awards that vest on the third anniversary of the grant date, subject to the executive’s continued service and based on the Company’s achievement of (i) total debt reduction from year-end 2022 to year-end 2025 and (ii) pre-tax income margin improvement relative to the pre-tax income margin improvement for a pre-defined group of airlines based on 2023-2025 pre-tax income margin over a 2019 baseline. The number of shares that will be issued with respect to the performance-vesting RSUs varies between 25% and 200% depending on the Company’s performance, and no shares will be issued if threshold performance is not achieved. |

  172. Grants of Plan-Based Awards in 2023

    | (e) Represents the time-vesting portion of the named executive officers’ 2023 annual RSU awards that vest, subject to the executive’s continued employment, with respect to 66.66% on the first anniversary of the grant date and with respect to 33.33% of the shares on the second anniversary of the grant date. |

  173. Grants of Plan-Based Awards in 2023

    | (f) Represents the time-vesting portion of the named executive officers’ 2023 one-time and promotion RSU awards that vest, subject to the executive’s continued employment, with respect to 66.66% on the first anniversary of the grant date and with respect to 33.33% of the shares on the second anniversary of the grant date. |

  174. Grants of Plan-Based Awards in 2023

    | (g) Represents Mr. Johnson’s promotion RSU grant that vests over three years, with one-third of the shares vesting on each of the first, second and third anniversaries of the grant date. |

  175. Grants of Plan-Based Awards in 2023

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  176. Outstanding Equity Awards at 2023 Fiscal Year-End

    Outstanding Equity Awards at 2023 Fiscal Year-End The following table provides information regarding all outstanding equity awards held by each of our named executive officers as of December 31, 2023.

  177. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | Stock Awards | | | | | | Name | Grant Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($)(j) | Number of Unearned Shares, Units, or Other Rights That Have Not Vested (#) | Market or Payout Value of Unearned Shares, Units, or Other Rights That Have Not Vested ($)(j) | | Robert Isom | 9/20/2023 | 430,704(a) | 5,917,873 | 430,704(b) | 5,917,873 | | | 9/20/2023 | 210,566(c) | 2,893,177 | 421,133(d) | 5,786,367 | | | 2/24/2022 | 21,539(e) | 295,946 | 172,312(f) | 2,367,567 | | | 2/16/2021 | 46,914(g) | 644,598 | - | - | | Steve Johnson | 9/20/2023 | 140,704(a) | 1,933,273 | 140,704(b) | 1,933,273 | | | 9/20/2023 | 181,554(h) | 2,494,552 | - | - | | | 2/24/2022 | 15,891(e) | 218,342 | 127,123(f) | 1,746,673 | | | 2/16/2021 | 31,706(g) | 435,640 | - | - | | Priya Aiyar | 7/12/2023 | 19,952(c) | 274,140 | 19,953(d) | 274,154 | | | 5/2/2023 | 85,693(a) | 1,177,422 | 85,693(b) | 1,177,422 | | | 12/12/2022 | 73,943(h) | 1,015,977 | - | - | | | 11/16/2021 | 26,462(h) | 363,588 | - | - | | | 2/16/2021 | 6,079(h) | 83,525 | - | - | | Devon May | 5/2/2023 | 85,693(a) | 1,177,422 | 85,693(b) | 1,177,422 | | | 12/12/2022 | 58,685(h) | 806,332 | - | - | | | 11/16/2021 | 21,001(h) | 288,554 | - | - | | Vasu Raja | 7/12/2023 | 32,661(c) | 448,762 | 32,662(d) | 448,776 | | | 5/2/2023 | 103,848(a) | 1,426,872 | 103,848(b) | 1,426,872 | | | 12/12/2022 | 24,882(h) | 341,879 | - | - | | | 11/16/2021 | 8,736(h) | 120,033 | - | - |

  178. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (a) Represents the time-vesting portion of the named executive officer’s 2023 annual RSU awards that vest, subject to the executive’s continued employment, with respect to 66.66% on the first anniversary of the grant date and with respect to 33.33% of the shares on the second anniversary of the grant date. |

  179. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (b) Represents the performance-vesting portion of the named executive officers’ 2023 annual RSU awards that vest on the third anniversary of the grant date, subject to the executive’s continued service and based on the Company’s achievement of (i) total debt reduction from year-end 2022 to year-end 2025 and (ii) pre-tax income margin improvement relative to the pre-tax income margin improvement for a pre-defined group of airlines based on 2023-2025 pre-tax income margin over a 2019 baseline. The number of shares that will be issued with respect to the performance-vesting RSUs varies between 25% and 200% depending on the Company’s performance, and no shares will be issued if threshold performance is not achieved. Based on our expected attainment level as of December 31, 2023, the target number of RSUs is shown. |

  180. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (c) Represents the time-vesting portion of the named executive officers’ 2023 one-time and promotion RSU awards that vest, subject to the executive’s continued employment, with respect to 66.66% on the first anniversary of the grant date and with respect to 33.33% of the shares on the second anniversary of the grant date. |

  181. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (d) Represents the performance-vesting portion of the named executive officers’ 2023 one-time and promotion RSU awards that vest on the third anniversary of the grant date, subject to the executive’s continued service and based on the Company’s achievement of (i) total debt reduction from year-end 2022 to year-end 2025 and (ii) pre-tax income margin improvement relative to the pre-tax income margin improvement for a pre-defined group of airlines based on 2023-2025 pre-tax income margin over a 2019 baseline. The number of shares that will be issued with respect to the performance-vesting RSUs varies between 25% and 200% depending on the Company’s performance, and no shares will be issued if threshold performance is not achieved. Based on our expected attainment level as of December 31, 2023, the target number of RSUs is shown. |

  182. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (e) Represents the time-vesting portion of the RSU awards granted on February 24, 2022, with 80% of the time-vesting shares vesting on February 24, 2023, the first anniversary of the grant date and 20% of the time-vesting shares vesting on February 24, 2024, the second anniversary of the grant date, subject to continued service. |

  183. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (f) Represents the performance-vesting portion of the RSUs granted on February 24, 2022, that will vest, subject to continued service, on February 24, 2025, based on the Company’s achievement of (i) total debt reduction from year-end 2021 to year-end 2024 and (ii) pre-tax income margin improvement relative to the pre-tax income margin improvement for a pre-defined group of airlines based on 2024 pre-tax income margin over a 2019 baseline. The number of shares that will be issued with respect to the performance-vesting RSUs varies between 20% and 200% depending on the Company’s performance, and no shares will be issued if threshold performance is not achieved. Based on our expected attainment level as of December 31, 2023, 160% of the target number of RSUs is shown. |

  184. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (g) Represents time-vesting RSU awards. 40% of the shares underlying grant vested on February 16, 2022, the first anniversary of the grant date, 40% of the shares underlying grant vested on February 16, 2023, the second anniversary of the grant date, and 20% of the shares underlying grant vested on the February 16, 2024, the third anniversary of the grant date. |

  185. Outstanding Equity Awards at 2023 Fiscal Year-End

    | | 67 |

  186. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (h) Represents time-vesting RSU awards that vest over three years, with one-third of the shares vesting on each of the first, second and third anniversaries of the grant date. |

  187. Outstanding Equity Awards at 2023 Fiscal Year-End

    | (j) The market value of RSUs was calculated by multiplying $13.74, the closing price of a share of our Common Stock on December 29, 2023, by the number of unvested RSUs outstanding under the award. |

  188. Options Exercised and Stock Vested

    Options Exercised and Stock Vested The following table provides information regarding the vesting of RSUs held by the named executive officers during the year ended December 31, 2023. Our named executive officers did not hold any options or SARs during 2023.

  189. Options Exercised and Stock Vested

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(a) | | Robert Isom | 240,026 | 3,806,677 | | Steve Johnson | 158,818 | 2,520,656 | | Priya Aiyar | 102,553 | 1,402,276 | | Devon May | 83,385 | 1,128,972 | | Vasu Raja | 43,115 | 605,702 |

  190. Options Exercised and Stock Vested

    | (a) Represents the closing market price of a share of our Common Stock on the date of vesting, multiplied by the number of shares that vested. |

  191. Options Exercised and Stock Vested

    | 68 | |

  192. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control This section quantifies payments that would be made to our named executive officers upon a change in control or following certain qualifying terminations of employment. For a description of these benefits, please see “Compensation Discussion and Analysis – Severance Benefits and Post Termination Restrictive Covenants.” The estimated amounts of the respective benefits for each of our named executive officers, assuming the triggering event occurred on December 31, 2023, are provided in the table below. The table below reflects the termination and/or change in control benefits payable to each named executive officer under agreements and plans in which he or she participates that were in effect as of the end of the fiscal year, and in the case of Mr. May, the severance agreement he entered into in February 2024.

  193. Potential Payments Upon Termination or Change in Control

    | Executive Benefits and Payments Upon Termination | Change in Control ($) | Involuntary Termination ($) | Involuntary Termination with Change in Control ($) | Death ($) | Disability ($) | Any Other Qualifying Termination ($)(f) | | Robert Isom | | | | | | | | Base Salary(a) | - | 2,600,000 | 2,600,000 | - | - | - | | Annual Incentive Award(b) | - | 5,200,000 | 5,200,000 | 3,922,360 | 3,922,360 | - | | COBRA(c) | - | 54,875 | 54,875 | - | - | - | | Acceleration of Unvested RSUs(d) | 23,823,401 | 15,389,935 | 23,823,401 | 23,823,401 | 23,823,401 | 9,041,151 | | Flight Privileges(e) | - | 268,043 | 268,043 | 170,308 | 268,043 | 268,043 | | Total | 23,823,401 | 23,512,853 | 31,946,319 | 27,916,069 | 28,013,804 | 9,309,194 | | Steve Johnson | | | | | | | | Base Salary(a) | - | 1,275,000 | 1,275,000 | - | - | - | | Annual Incentive Award(b) | - | 1,912,500 | 1,912,500 | 1,787,085 | 1,787,085 | - | | COBRA(c) | - | 40,854 | 40,854 | - | - | - | | Acceleration of Unvested RSUs(d) | 8,761,753 | 8,761,753 | 8,761,753 | 8,761,753 | 8,761,753 | 8,761,753 | | Flight Privileges(e) | - | 295,231 | 295,231 | 197,802 | 295,231 | 295,231 | | Total | 8,761,753 | 12,285,338 | 12,285,338 | 10,746,640 | 10,844,069 | 9,056,984 | | Priya Aiyar | | | | | | | | Base Salary(a) | - | 1,095,000 | 1,095,000 | - | - | - | | Annual Incentive Award(b) | - | 1,368,750 | 1,368,750 | 1,376,634 | 1,376,634 | - | | COBRA(c) | - | 13,105 | 13,105 | - | - | - | | Acceleration of Unvested RSUs(d) | 4,366,228 | 2,313,445 | 4,366,228 | 4,366,228 | 4,366,228 | - | | Flight Privileges(e) | - | 18,775 | 18,775 | - | - | - | | Total | 4,366,228 | 4,809,075 | 6,861,858 | 5,742,862 | 5,742,862 | - | | Devon May | | | | | | | | Base Salary(a) | - | 1,162,500 | 1,162,500 | - | - | - | | Annual Incentive Award(b) | - | 1,453,125 | 1,453,125 | 1,461,495 | 1,461,495 | - | | COBRA(c) | - | 45,964 | 45,964 | - | - | - | | Acceleration of Unvested RSUs(d) | 3,449,730 | 1,869,135 | 3,449,730 | 3,449,730 | 3,449,730 | - | | Flight Privileges(e) | - | 317,273 | 317,273 | 227,649 | 317,273 | 317,273 | | Total | 3,449,730 | 4,847,997 | 6,428,592 | 5,138,874 | 5,228,498 | 317,273 | | Vasu Raja | | | | | | | | Base Salary | - | - | - | - | - | - | | Annual Incentive Award(b) | - | - | - | 1,461,495 | 1,461,495 | - | | COBRA | - | - | - | - | - | - | | Acceleration of Unvested RSUs(d) | 4,213,194 | - | 4,213,194 | 4,213,194 | 4,213,194 | - | | Flight Privileges(e) | - | - | - | - | - | - | | Total | 4,213,194 | - | 4,213,194 | 5,674,689 | 5,674,689 | - |

  194. Potential Payments Upon Termination or Change in Control

    | (a) On an involuntary termination, represents 24 months of base salary for Mr. Isom and 18 months of the executive’s base salary for Ms. Aiyar and Messrs. Johnson and May. |

  195. Potential Payments Upon Termination or Change in Control

    | | 69 |

  196. Potential Payments Upon Termination or Change in Control

    | (b) On an involuntary termination, represents two times Mr. Isom’s annual target cash incentive and 1.5 times the executive’s annual target cash incentive for Ms. Aiyar and Messrs. Johnson and May. On death or disability, amount represents the amount of the annual incentive award earned by each named executive officer under the 2023 STIP which was attained at 150.86% of target. |

  197. Potential Payments Upon Termination or Change in Control

    | (c) On an involuntary termination, in the case of Mr. Isom, represents a payment equal to 24 months’ COBRA premiums, and for Ms. Aiyar and Messrs. Johnson and May, a payment equal to 18 months’ COBRA premiums. |

  198. Potential Payments Upon Termination or Change in Control

    | (d) Aggregate value of unvested RSUs is calculated at a price of $13.74, the closing price of a share of our Common Stock on December 29, 2023, multiplied by the number of unvested RSUs outstanding under each award. The performance-vesting portion of the named executive officer’s 2022 RSU awards are valued based on our expected attainment level as of December 31, 2023 of 160% of target and the performance-vesting portion of the named executive officer’s 2023 RSU award are based on our expected attainment level as of December 31, 2023 of target. For a description of these vesting acceleration benefits, please see “Compensation Discussion and Analysis – Severance Benefits and Post Termination Restrictive Covenants.” |

  199. Potential Payments Upon Termination or Change in Control

    | (e) Each of Messrs. Isom, Johnson and May are vested into positive space flight lifetime travel benefits and are entitled to continued receipt of these benefits upon their termination of employment, other than coverage of income tax liability. Mr. Raja is eligible for lifetime space available travel benefits, which does not result in any incremental cost to the Company. The calculation of the positive space lifetime travel benefits is based on the terms of the non-revenue travel policy for executive officers currently in effect. Under her severance agreement with the Company, in the case of an Involuntary Termination, Ms. Aiyar is entitled to travel privileges pursuant to the terms of the Company’s travel policy for officers during the 18-month period following the termination date. Reflects the present value of future travel calculated using a discount rate of 5.3% and Pri-2012 Employee Table, with white collar adjustments, increased by 3.0% at all ages, and then projected generationally from 2012 with Scale MP-2021, and assumes the annual level of usage is the same as the executive’s actual usage for 2023 (excluding travel between Phoenix and Dallas/Fort Worth and between Orange County and Dallas/Fort Worth for Mr. Johnson) with a valuation based on imputed income and a 1% annual increase in the cost of travel. |

  200. Potential Payments Upon Termination or Change in Control

    | (f) Represents for Messrs. Isom and Johnson, the vesting of certain RSUs on any termination without “cause,” including retirement. |

  201. CEO Pay Ratio

    CEO Pay Ratio As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr. Isom, who served as CEO as of December 31, 2023. We offer competitive compensation to our team members. As one of the world’s largest airlines, some of our unique characteristics may make comparisons to the pay ratios at other airlines or companies difficult. We employ over 130,000 team members; our route network is vast and unique; and we insource more of our flying and services than our U.S. peers. For example, American operates three wholly-owned regional airlines, and approximately 22% of our total workforce is employed by those airlines. Additionally, our pay ratio includes approximately 16% part-time and temporary team members. In 2023, mainline and regional salaries, wages and benefits were our largest expense and represented approximately 34% of our total operating expenses. Approximately 87% of our employees as of December 31, 2023 were represented by various labor unions responsible for negotiating the collective bargaining agreements covering their compensation and job duties, among other things. The Company’s employment footprint is quite diverse—with some positions requiring initial education and licensing requirements as well as ongoing certification work. Compensation for positions with more rigorous requirements for continued employment and that draw from smaller applicant pools generally utilize higher pay bands than those positions with fewer educational and training requirements and larger applicant pools. For 2023, the median annual total compensation of all team members across American (other than our CEO) was $67,788, while the annual total compensation of our CEO was $31,438,162, as outlined in the “Summary Compensation Table” above. Based on this information, the ratio of the annual total compensation of our CEO to the median annual total compensation of all employees was estimated to be 464 to 1, calculated in accordance with SEC rules. This pay ratio is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. In addition to the required pay ratio calculation above, we have calculated an alternative pay ratio using an adjusted amount of total compensation for Mr. Isom that removes the non-recurring elements of his compensation as set forth under “Compensation Discussion and Analysis— Non-Recurring Compensation Elements Reported in 2023”. When calculated in this manner, Mr. Isom’s adjusted total compensation for 2023 is $16,582,362 and the ratio of the annual total compensation of Mr. Isom to the median annual total compensation of all employees was estimated to be 245 to 1. This alternative pay ratio is not a substitute for the pay ratio calculated in accordance with the SEC disclosure rules, but we believe it is helpful in fully evaluating the ratio of Mr. Isom’s annual total compensation to the median of the annual total compensation of all American Airlines employees.

  202. Pay Ratio Comparisons

    Pay Ratio Comparisons The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.

  203. Pay Ratio Comparisons

    | | 71 |

  204. Pay Versus Performance

    Pay Versus Performance In accordance with SEC rules, the table below sets forth additional information concerning the compensation of each individual who served as our Chief Executive Officer (“CEO”) and our other (“non-CEO”) named executive officers (“NEOs”) for each of the fiscal years ended December 31, 2023, 2022, 2021 and 2020, and our financial and total stockholder return (“TSR”) performance for each such fiscal year. Mr. Isom served as our CEO during 2023 and a part of 2022 and Mr. Parker served as our CEO during a part of 2022 and all of 2021 and 2020. The COVID-19 pandemic was the most challenging time in our industry’s history. It resulted in drastic disruptions in global demand for air travel and a severe decline in our business. Despite these challenges, we remained consistent in our approach and philosophy that our executive compensation programs provide both fair pay and pay-for-performance and align with the interests of stockholders. In 2023, we produced exceptionally strong performance, including:

  205. Pay Versus Performance

    | • | Achieved record 2023 revenue of approximately $53 billion, an increase of more than $22 billion compared to 2021 |

  206. Pay Versus Performance

    | • | On a GAAP basis, reversed our pre-tax loss in 2021 of over $2.5 billion and produced pre-tax income of $186 million in 2022 and pre-tax income of more than $1.1 billion in 2023 |

  207. Pay Versus Performance

    | • | Excluding pre-tax net special items, (1) reversed our pre-tax loss in 2021 of nearly $7 billion and produced pre-tax income of $458 million in 2022, and nearly $2.5 billion in 2023 |

  208. Pay Versus Performance

    | (1) See Appendix B for details on the components of pre-tax net special items and for a reconciliation of pre-tax income (loss) excluding net special items, a non-GAAP measure. |

  209. Pay Versus Performance Table

    Pay Versus Performance Table

  210. Pay Versus Performance Table

    | | | | | | | | Value of Initial Fixed $100 Investment Based on: | | | | | Year | Summary Compensation Table Total: Mr. Isom ($) (1) | CAP: Mr. Isom ($) (2) | Summary Compensation Table Total: Mr. Parker ($) (1) | CAP: Mr. Parker ($) (2) | Average Summary Compensation Table Total for Non-CEO NEOs ($) (1) | Average CAP: Non-CEO NEOs ($) (2) | AAG Total Stockholder Return ($) (3) | Peer Group Total Stockholder Return ($) (3) | Net Income (Loss) ($) (in millions) | Adjusted Pre-Tax Margin % (4) | | 2023 | 31,438,162 | 33,817,502 | - | - | 9,530,121 | 9,827,888 | 48.08 | 61.60 | 822 | 4.7% | | 2022 | 4,886,649 | 3,507,095 | 6,537,694 | 3,881,181 | 3,400,714 | 2,422,634 | 44.52 | 48.04 | 127 | 0.9% | | 2021 | - | - | 7,238,011 | 8,128,613 | 3,892,813 | 4,197,060 | 62.85 | 74.23 | (1,993) | (23.2%) | | 2020 | - | - | 10,663,866 | (614,164) | 4,245,970 | 736,998 | 55.19 | 75.55 | (8,885) | (70.7%) |

  211. Pay Versus Performance Table

    | (1) Amounts reported in these columns represent the total compensation as reported in the Summary Compensation Table for Messrs. Isom and Parker for each year where they served as CEO and the average of the total compensation as reported in the Summary Compensation Table for our remaining NEOs for the relevant fiscal year, which captures the individuals indicated in the table below for each fiscal year: |

  212. Pay Versus Performance Table

    | Year | CEO | Non-CEO NEOs | | 2023 | Robert Isom | Steve Johnson, Priya Aiyar, Devon May and Vasu Raja | | 2022 | Robert Isom and Doug Parker | Derek Kerr, Steve Johnson, Maya Leibman and David Seymour | | 2021 | Doug Parker | Robert Isom, Derek Kerr, Steve Johnson and Maya Leibman | | 2020 | Doug Parker | Robert Isom, Derek Kerr, Steve Johnson and Maya Leibman |

  213. Pay Versus Performance Table

    | (2) Compensation Actually Paid (“CAP”) to Mr. Isom and the remaining NEOs for 2023 reflects the following adjustments from total compensation reported in the Summary Compensation Table: |

  214. Pay Versus Performance Table

    | 72 | |

  215. Pay Versus Performance Table

    | | 2023 | | | Adjustments | Mr. Isom ($) | Average Non-CEO NEOs ($) | | Deduction for amounts reported under the “Stock Awards” column of Summary Compensation Table for Fiscal Year 2023 (“FY23”) | (19,500,000) | (3,895,000) | | Year-end Fair Value of Equity Awards Granted in FY23 | 20,515,276 | 3,842,580 | | Year over Year Change in Fair Value of Outstanding and Unvested Equity Awards Granted in Prior Years | 610,517 | 167,907 | | Change in Fair Value of Equity Awards Granted in Prior Years that Vested in the FY23 based on change from Prior Year-end to Vesting Date | 753,546 | 182,279 | | Total Adjustments | 2,379,339 | 297,766 |

  216. Pay Versus Performance Table

    | Fair value or change in fair value, as applicable, of equity awards in the Compensation Actually Paid columns was determined by reference to (1) for time-based RSU awards, the closing price of a share of our Common Stock on the applicable year-end date(s) or, in the case of vesting dates, the closing price of a share of our Common Stock on the applicable vesting dates, and (2) for performance-based RSU awards, the same valuation methodology as time-based RSU awards except year-end values are multiplied by a factor reflecting achievement of the probable outcome of the applicable performance conditions as of the measurement date (which as of December 31, 2023 was 160% for the 2022 grants and 100% for the 2023 grants). |

  217. Pay Versus Performance Table

    | (3) Pursuant to the SEC rules, TSR reflects an initial investment of $100 on December 31, 2019, and that all dividends, if any, were reinvested. The Peer Group Total Stockholder Return represents the cumulative TSR of the ARCA Airline Index (the “Peer Group TSR”). |

  218. Pay Versus Performance Table

    | (4) Adjusted pre-tax margin is a non-GAAP measure and excludes net special items. See Appendix B for a reconciliation of pre-tax margin excluding net special items, a non-GAAP measure. |

  219. Pay Versus Performance Tabular List

    Pay Versus Performance Tabular List We believe the following performance measures represent the most important financial performance measures used by us to link compensation actually paid to our named executive officers for 2023:

  220. Pay Versus Performance Tabular List

    | • | Stock price/total stockholder return; |

  221. Pay Versus Performance Tabular List

    | • | Adjusted pre-tax margin; |

  222. Pay Versus Performance Tabular List

    | • | Total debt reduction; |

  223. Pay Versus Performance Tabular List

    | • | Adjusted pre-tax income; |

  224. Pay Versus Performance Tabular List

    | • | Mainline and regional on-time departures |

  225. Pay Versus Performance Tabular List

    | • | Mainline and regional controllable completion factor; and |

  226. Pay Versus Performance Tabular List

    | • | Measures related to diversity, equity and inclusion. |

  227. Pay Versus Performance Tabular List

    For additional details regarding our performance measures, please see the sections entitled “Annual Cash Incentive Program” and “Long-Term Incentive Programs” in our “Compensation Discussion and Analysis” beginning on pages 49 and 52, respectively.

  228. Pay Versus Performance Tabular List

    | | 75 |

  229. Pay Versus Performance Tabular List

    EQUITY COMPENSATION PLAN INFORMATION The following table provides information about our Common Stock that may be issued under our equity compensation plans as of December 31, 2023, which consists of the 2023 Incentive Award Plan (the “2023 Plan”) and the 2013 Incentive Award Plan (the “2013 Plan”).

  230. Pay Versus Performance Tabular List

    | Plan Category | (i) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | (ii) Weighted Average Exercise Price of Outstanding Options, Warrants and Rights ($) | (iii) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (i)) | | Equity Compensation Plans Approved by Security Holders(a) | 14,234,700(b) | - | 9,501,204 | | Equity Compensation Plans Not Approved by Security Holders | - | - | - | | Total | 14,234,700 | - | 9,501,204 |

  231. Pay Versus Performance Tabular List

    | (a) On May 10, 2023, our stockholders approved the 2023 Plan which replaced the 2013 Plan. The 2013 Plan was approved by the Bankruptcy Court in connection with AMR Corporation’s bankruptcy plan and further approved by the Board on December 9, 2013. Under Delaware law, as part of the reorganization, the 2013 Plan was deemed to be approved by our stockholders. |

  232. Pay Versus Performance Tabular List

    | (b) Consists of 14,234,700 RSUs. |

  233. Pay Versus Performance Tabular List

    | 76 | |

  234. Pay Versus Performance Tabular List

    OTHER MATTERS