Four US Airline CEOs Took Home $5 Million+ Salaries Last Year

When an airline CEO gets paid 176 times more than the median paid to his workforce, it’s no wonder it makes the news for a few days. The good thing is there’s nothing secretive about how and how much large airlines remunerate their CEOs, as it’s all hidden in plain sight.

In a report released yesterday, travel information company Skift detailed the 2021 pay packages for CEOs of 11 major US airlines. While COVID and the US CARES Act have constrained some pay packets, only Maurice Gallagher, Jr. at Allegiant went home empty-handed. Delta Air Lines CEO Ed Bastian was top of the table, with a compensation package of $12.4 million (€11.8 million), with the majority of that in the form of stock awards and options. While he earned $2.5 million more than his closest peer, Scott Kirby, at United Airlines, Bastian has not escaped the impact of the pandemic on his pay. According to Delta’s reporting, in 2020, his total package was $13.1 million, and in 2019 it was $17.3 million.

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Combined, the CEOs of the 11 publicly-traded large US airlines, not including regionals, took home more than $53 million in compensation in 2021. Without making any distinction between cash, performance incentives or stock, the ‘all-in pay’ of the four highest after Bastian and Kirby were: American’s Doug Parker at $7.24M, Southwest’s Gary Kelly at $5.8M, Spirit’s Ted Christie $3.87M and Frontier’s Barry Biffle $3.6M. At the bottom of the scale was Allegiant’s Maurice Gallagher, who received nothing, waiving his 2020 and 2021 compensation.

The big money is in the stock and incentives

In 2021, Delta Air Lines CEO Ed Bastian received an ‘all-in’ pay packet of $12.4 billion, despite Delta losing $3.4 billion. Photo: Delta Air Lines

Seemingly a paradox is that more than 90% of Bastian’s compensation is based on performance goals, yet Delta posted an adjusted loss of $3.4 billion in 2021, and the rewards still flowed. In its Securities and Exchange Commission Proxy Report, Delta said it excluded some performance measures,

“that would better measure the company’s performance once the airline returned to profitability and generated sustained operating cash flows. The Personnel & Compensation Committee believed that superior performance in the retained performance measures should ultimately produce sustainable long-term shareholder returns.”

In other words, Delta moved the goalposts. It’s also important to note that while these awards are denominated in cash, they are actually paid in Delta shares. At Delta, the stock value is tied to its price on one day, February 3, and most other airlines have comparable practices. Bastian’s actual base salary in 2021 was $950,000, so he has a lot of incentive to steer Delta on a profitable path in the coming years. Similarly, United Airlines CEO Scott Kirby’s base salary in 2021 was $1 million, but his total package reached $9.85 million, although United posted an adjusted net loss of $4.5 billion.


Hawaiian Airlines has the lowest CEO-to-employee pay ratio in the Skift report on 2021 CEO remuneration. Photo: Hawaiian Airlines.

Median employee compensation changes by the airline, but the report says that in 2021, it was $70,240 at Delta, $78,245 at United, $62,765 at American and $69,381 at Hawaiian Airlines. The CEOs of those four airlines had respective pay gaps of 176x, 126x, 115x and 44.6x the median employee compensation. A significant brake on all CEOs’ take-home pay is the compensation limitations enshrined in the US CARES Act and payroll support program, a federal government COVID relief package given to the aviation industry. This provision reduced Kirby’s compensation by 28%, but Delta did not specify its impact on Bastian.

Successfully running a large airline is no walk in the park, and airline CEO pay is benchmarked against similar-sized businesses in other sectors. Right now, commercial aviation is not delivering great experiences to its customers, so are they paid too much?

Discover more aviation news here.

Source: Skift

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