A federal filing from Alaska Air Group on Thursday shows that sky-high executive pay in corporate America is untouchable, even as companies receive massive financial support from American taxpayers.

Alaska Air’s C-suite executives received millions of dollars in special additional pay increases above the norm last year, including an additional $5.3 million for CEO Ben Minicucci, bringing his total compensation to $10.3 million.

The filing says the additional millions replace compensation given up during the COVID-19 pandemic, when the government kept executive pay low while bailing out the airline.

That reasoning didn’t sit well with the airline’s flight attendants, who are currently fighting for a new contract to address their low wages.

Thresia Raynora flight attendant and an Association of Flight Attendants, or AFA, union official in Anchorage, said: “It is infuriating for all of us to see Ben get a $5 million raise knowing that our union was sitting in front of Congress begging for money for the airline and save us from bankruptcy.”

“I can’t believe he has continued with corporate greed,” Raynor added.

In 2020 and 2021, as air travel collapsed, the U.S. government gave Alaska Air a $2.3 billion lifeline to support payroll and prevent employee furloughs. That included a $1.7 billion outright grant that does not have to be repaid.

One of the conditions attached was that the remuneration of directors was capped at the 2019 level for three years.

During that period, the Alaska administration employed what is described in the proxy application as “a give-and-take approach.”

They went ahead and gave out handsome share awards to the top executives, then ‘reclaimed’ the amounts. In order not to exceed the compensation ceiling, these rewards could not be awarded at the time.

But the executives didn’t have to worry about their lower paychecks. Thursday’s filing shows that when the three-year period expired last May, Alaska’s board made amends with the airline’s leadership.

After conducting “extensive consultation with its independent compensation advisor,” the board “re-awarded the compensation that had been approved but recovered during the limited period.”

For example, in 2021 and 2022, CEO Minicucci’s compensation was capped at the level of his 2019 compensation, just over $3 million.

In 2023, after restoring the $5.3 million in stock awards recovered in the two previous years, Minicucci’s total compensation for 2023 has more than tripled from 2022.

Frontline workers have also lost some wages during the pandemic, but have not yet recovered.

“This is stupid and insensitive and management would be better off addressing it with an industry-leading contract for Alaska Flight Attendants,” said Sara Nelson, AFA national president.

No “make-up” raises for other employees

During the existential crisis of the pandemic, Alaska Air asked flight attendants to take voluntary, unpaid leave to help the company.

According to union data, half of flight attendants took at least a temporary leave of absence for a month or two. They were able to apply for unemployment benefits without being paid, although many had difficulty receiving them.

For the flight attendants who continued to work, Payroll Support Program funding from the Coronavirus Aid, Relief and Economic Security, or CARES, Act guaranteed pay for a minimum number of trips, even if they weren’t flying due to the aviation downturn. air travel.

Those flight attendants would have earned less than in a normal flying year.

Raynor, a veteran flight attendant at the top of the pay scale, shared her W-2 tax returns showing she earned nearly $14,000 less in 2020 during the worst of the recession than she did the following year.

Similarly, Alaska Airlines pilots, whether they flew or not, were paid for the minimum 75 hours of flying time per month guaranteed in their contracts. Many pilots would normally have flown between 80 and 85 hours, so their salaries would have been marginally low.

But none of these employee groups received any “make-up” raises once the crisis abated and flying returned to normal.

An internal memo from Alaska Airlines this week told employees that executives were getting the perk to bring their pay “to market level,” meaning they had to keep up with their counterparts at other airlines.

The memo noted that Minicucci gave up his base salary for seven months at the start of the pandemic, reducing it from more than $540,000 in 2019 to $254,000 in 2020.

Chief Financial Officer Shane Tackett and Chief Commercial Officer Andrew Harrison each cut their base salaries by 30% for the half of 2020.

Base salary typically represents only about 15% of executives’ total compensation, most of which comes in the form of stock awards.

Alaska is the first of the major U.S. airlines to file the annual proxy statement detailing executive compensation. It is likely that the other majors will follow suit and give their leadership the COVID-era compensation that has been missed out on at the government’s insistence.

Show details for other executives mentioned in the filing:

  • CFO Tackett was awarded an additional $2.8 million to make up for his COVID shortfall, bringing his total 2023 compensation to $5.6 million.
  • CCO Harrison received an additional $1.6 million, bringing his total compensation for 2023 to $4.6 million.
  • Alaska Chief Operating Officer Constance von Muehlen received an additional $2.8 million, bringing her total compensation for 2023 to $4.6 million.
  • Alaska General Counsel Kyle Levine received an additional $1.6 million, bringing his total compensation for 2023 to $3.7 million.

Of the government relief funding provided to Alaska, the country has repaid a $135 million loan. Another $600 million unsecured loan was made at such a low interest rate that it makes sense for Alaska to keep it on the books.

That doesn’t need to be fully repaid until 2030-2031 and represented 24% of Alaska’s $2.5 billion debt balance at the end of last year.

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