Proxy Statement Summary

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Proxy Statement Summary

Matters to be Voted On

Item for Business

Board Recommendation

Effect of Abstention

1. Elect 11 Directors

FOR each Director Nominee

None

2. Approve on an advisory basis the Compensation of the Company’s Named Executive Officers

FOR

A Vote Against

3. Ratify the Appointment of KPMG LLP as the Company’s Independent Registered Public Accountants for Fiscal Year 2019

FOR

A Vote Against

4. Approve the Amendment of the Company’s Employee Stock Purchase Plan

FOR

A Vote Against

5. A Stockholder Proposal Regarding the Company’s Disclosure of Political Spending

AGAINST

A Vote Against

6. A Stockholder Proposal Regarding Changes to the Company’s Proxy Access Bylaw

AGAINST

A Vote Against

Governance Highlights

As part of Alaska Air Group’s commitment to high ethical standards, our Board follows sound governance practices.  Many of these practices are described in more detail in our Corporate Governance Guidelines, which are available on the Company’s website at www.alaskaair.com under About Alaska/Investor Relations.

Topic

Practice

Independence

•  10 out of 11 nominees are independent.

•  Board committees are composed exclusively of independent directors.

Lead Independent Director

•  The Board has appointed a strong lead independent director who, among other things:

o acts as liaison between the independent directors and the board chairman;

o presides at meetings where the board chairman is not present or could be perceived as having a conflict of interest;

o approves board meeting agendas and meeting schedules;

o leads the independent directors’ annual evaluation of the CEO; and

o interviews independent directors annually prior to nomination.

Executive Sessions

•  Independent directors meet regularly without management.

Annual Election

•  All directors are elected annually to one-year terms.

Majority Voting

•  In uncontested elections, directors are elected by a majority of votes cast.

Director Evaluations

•  The Board and each committee conduct annual self-evaluations and may engage a third party as needed.

Stock Ownership

•  Each director is expected to hold shares of Alaska Air Group stock equivalent to six times his or her annual cash retainer.

Other Directorships

•  Directors are encouraged to serve on no more than four other public company boards.

Stockholder Communications

•  The Board has adopted a protocol to allow those stockholders with long-term significant holdings of our stock to meet directly with board members on appropriate matters.

Poison Pill

•  The Company does not have a stockholder rights plan.

Proxy Access

•  Stockholders who meet certain requirements may include director nominees in the Company’s proxy statement.

Right to Call Special Meeting

•  Stockholders holding 10 percent or more of the outstanding stock have the right to call a special meeting.

Confidential Voting

•  Records that identify the vote of a particular stockholder are kept confidential from the Company except in a proxy contest or as required by law.

Single Voting Class

•  Common stock is the only class of voting shares outstanding.

Director Tenure

•  Directors are subject to term and age limits as described in our Corporate Governance Guidelines.

Our Board

All nominees meet the New York Stock Exchange (NYSE) governance standards for director independence, except for Mr. Tilden, who is not independent due to his position as an executive officer.

 

Nominee and Principal Occupation

 

Age

Director Since

Committee Membership

Patricia M. Bedient

Former Executive Vice President and CFO The Weyerhaeuser Company

65

2004

Lead Independent Director

Audit

Governance and Nominating

James A. Beer

Chief Financial Officer

Atlassian Corporation

58

2017

Compensation and Leadership Development

Safety

 

Marion C. Blakey

Former President and CEO

Rolls-Royce North America

71

2010

Compensation and Leadership Development (Chair)

Safety

 

Phyllis J. Campbell

Chairman

JPMorgan Chase & Co. Pacific Northwest Region

67

2002

Governance and Nominating (Chair)

Raymond L. Conner

Former Vice Chairman

The Boeing Company

63

2018

Compensation and Leadership Development

Safety

Dhiren R. Fonseca

Partner

Certares LP

54

2014

Audit

Susan J. Li

Vice President, Finance

Facebook, Inc.

33

2018

Audit

Helvi K. Sandvik

President, Kidways LLC and Former President

NANA Development Corporation

61

2013

Safety (Chair)

J. Kenneth Thompson

President and CEO

Pacific Star Energy LLC

67

1999

Compensation and Leadership Development

Safety

Bradley D. Tilden

Chairman, President and CEO

Alaska Air Group, Inc.

58

2010

 

Eric K. Yeaman

President and COO

First Hawaiian Bank

51

2012

Audit (Chair)

Governance and Nominating

As discussed later in this Proxy Statement, broad diversity of the Board, including qualifications, gender, age, tenure and geography, is important to the Company’s long-term success.  Diversity is a key factor in the Board’s consideration of director candidates as well as for development of the Company’s employees.  The following charts provide a current view of the Board’s diversity achievements.

Relevant Skills and Qualifications
(Percent of Independent Directors)

Note: Director continuing education is encouraged and reviewed regularly by the Governance and Nominating Committee to ensure the skills represented on the Board align with the Company’s strategy.

Note: The Board’s Lead Independent Director role has been held by a woman since 2011.

Age

Geographic Location

Tenure

Executive Compensation Practices

Our executive compensation program is aligned with our business strategy and is designed to attract and retain top talent and reward the achievement of key business goals.  The following practices ensure alignment of interests between stockholders and executives and are considered good governance by our Compensation and Leadership Development Committee (the Committee) and by the majority of our stockholders.

Topic

Practice

Pay for Performance

•  A significant percentage of total direct compensation is based on the achievement of performance-based goals that are challenging, yet attainable, and that drive achievement of the Company’s business strategy.  Goals apply to all employees to encourage alignment.

•  The Committee considers Company performance when setting CEO pay.

“Say on Pay”

•  Annually, we ask stockholders to provide an advisory vote on our pay practices, which the Committee considers when setting CEO pay.

Stock Ownership Requirements

•  Our minimum stockholding requirements are 5 times base salary for the CEO, 4 times base salary for the president and 3 times base salary for the executive vice presidents of Alaska Airlines.

Change-of-Control Provisions

•  We have double-trigger change-of-control provisions that require the consummation of a change-of-control transaction and the actual or constructive termination of employment.

Clawback Policy

•  Our policy allows recovery of incentive cash or equity compensation that is based on financial statements that were subsequently restated due to the individual’s fraudulent or grossly negligent act or omission.

Independent Compensation Consultant

•  The Committee retains a compensation consultant that does not provide any other services to the Company.

Hedging of Company Stock

•  Executive officers and board members may not engage in transactions that create a hedge against fluctuations in the price of Alaska Air Group stock.

Pledging of Company Stock

•  Executive officers and board members may not pledge Alaska Air Group stock as collateral for any obligation.

Severance Tax Gross-Ups

•  Our change-of-control and severance arrangements do not provide for tax gross-ups.

Employment Contracts

•  None of our named executive officers has an employment contract.

Repricing of Stock Options

•  Our equity incentive plan does not permit repricing or exchange of underwater stock options without stockholder approval.

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