The chief executive of Southwest Airlines voluntarily cut his 2009 base salary by 10 percent citing the company’s first-quarter results, the low-cost carrier said in a proxy statement on Friday.
The Dallas-based company’s compensation committee had already decided not to offer chief executive Gary Kelly a pay increase in 2009 given the “general economic outlook,” Southwest said in the proxy, filed with the Securities and Exchange Commission.
Kelly’s base pay was increased to USD$465,000 last July after the company’s three-person committee decided to boost his salary citing his added duties as chairman of the board and president of the company.
Including bonus payments and other compensation, Kelly earned nearly USD$1.7 million last year, more than USD$378,000 that he made in 2007.
In 2008, Chief Financial Officer Laura Wright earned more than USD$689,000, including bonus and other payments, a decline from the more than USD$700,000 she took home the year earlier.
Southwest, widely known for its thriftiness, said it had chosen to award bonuses to its executives to reward them for the company’s 36th year of profitability and the success of its its fuel hedging programme, which contributed to cash savings of almost USD$1.3 billion in 2008, the company said.
The airline had a profitable 2008 despite reporting losses in the second half.
Those declines continued into 2009 when on Thursday, Southwest posted a quarterly loss of USD$91 million as business and leisure travel slumped and the value of its fuel hedging programme fell.
The company is offering an employee buyout programme and most senior managers are accepting a pay freeze.
(Reuters)
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April 28, 2009 at 12:32 am