MINNEAPOLIS — The head of US Airways saw his pay fall about 31 percent last year as the airline continued to post losses.
Chairman and CEO Doug Parker's total compensation fell to about $2.6 million, according to an Associated Press analysis of a regulatory filing on Friday. Most of the drop was because the airline's failure to post a pretax profit made him ineligible for some incentive pay and due to the stock lagging that of other airlines. This is the third year his compensation has declined as the industry has faced tough fuel costs and a weak economy.
Parker's $550,000 base salary didn't change. He didn't get incentive pay tied to financial goals. But he received $429,000 in incentive pay because the airline met operational goals including on-time performance, improvements in baggage handling, customer complaints, and cost management, according to a letter Parker sent to workers to explain the paycheck.
The company also gave Parker stock options valued at $1.5 million on the day they were granted.
"More than 80 percent of my target compensation is determined by how well the company performs, so when US Airways doesn't do well, my compensation declines — as it should," he wrote.
US Airways Group Inc. lost $205 million last year, which was actually a huge improvement from its $2.22 billion loss in 2008. Revenue fell 14 percent to $10.46 billion as the airline, like others, cut flying to cope with the recession.
Shares of the Tempe, Ariz.-based airline fell more than 37 percent during the year, closing 2009 at $4.84, down from $7.73 at the beginning of the year. On Friday they closed at $7.07, down 26 cents, or 3.6 percent, for the day.
The company plans to hold its annual meeting in Washington on June 10.
The AP formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year.
The calculations don't include changes in the present value of pension benefits, making the AP total different in most cases than the total reported by companies to the Securities and Exchange Commission.