UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN
PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
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| Definitive Proxy Statement |
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DELTA AIR LINES, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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NOTICEOF THE ANNUAL MEETING OF SHAREHOLDERS
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TIME AND DATE: | PLACE: | RECORD DATE: |
Thursday, June 7:30 a.m. Eastern Daylight Time | The Offices of Davis Polk & Wardwell |
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| 450LexingtonAvenue,NewYork,NewYork | April 29, 2022 |
AGENDA | |||
At the Annual Meeting, shareholders will be asked to vote on the following proposals: | Board Recommends Vote: | ||
ITEM 1 | Election of |   | FOR each nominee |
ITEM 2 | Advisory vote on executive compensation | | FOR |
ITEM 3 | Ratification of Ernst & Young LLP as independent auditors for | | FOR |
ITEM 4 | Shareholder proposal titled “Transparency in Lobbying,” if properly presented |   | AGAINST |
In addition, we will transact any other business properly presented at the meeting, including any adjournment or postponement by or at the direction of the Board of Directors.
A listofshareholders entitled to vote at the meeting will be available for examination during normal business hours for ten days before the meeting at Delta’s Investor Relations Department, 1030 Delta Boulevard, Atlanta, Georgia 30354. The shareholder list will also be available at the meeting.
If you plan to attendthemeeting, please see the instructions on page 6571 of the attached proxy statement. The venue for the annual meeting requires proof of COVID-19 vaccination for entry, please see page 71 for more details.If you will need special assistance at the meeting because of a disability, contact Investor Relations at (866) 715-2170.
We encourage shareholders to sign up to receive future proxy materials electronically, including the Notice Regarding the Availability of Proxy Materials. To sign up, visit http://enroll.icsdelivery.com/dal.
BY INTERNET | BY TELEPHONE | BY MAIL | IN PERSON |
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Go to www.proxyvote.com and follow the instructions | Call 1-800-690-6903 | Sign,dateandreturn your proxy card in the enclosed postage-paid envelope | Attend the annual meeting in New York, New York. See page 71 |
The Notice of Internet Availability of Proxy Materials is being mailed, and the attached proxy statement is being made available, to our shareholders on or about May 10, 2019.6, 2022.
Pleasereadourattachedproxystatementcarefullyandsubmityourvoteassoonaspossible.Yourvoteisimportant.YoucanensurethatyoursharesarevotedatthemeetingbyusingourInternetortelephonevotingsystem,orbycompleting,signingandreturningaproxycard.
Atlanta, Georgia
May 10, 2019
2019 PROXY STATEMENT 1
LETTER FROM THE CHIEF EXECUTIVE OFFICER
6, 2022
 2022 PROXY STATEMENT | 1 |
In 2018, Delta celebrated
First and foremost in our mind is running a safe, reliable and customer-focused operation. In 2018, we had 143 cancel-free days across the entire Delta system including both the mainline and regional carriers, up from 90 days just a year ago. We accelerated revenue growth to 8% on an increasingly diverse revenue base and offset over 90%FRANCIS S. BLAKE
Chairman of the $2 billion increaseBoard
We are looking forward to once again being with our shareholders in fuel costs compared to the prior year. In 2018 more than half of our revenue was generated from premium products, our loyalty program, aircraft maintenance and cargo, relying substantially lessperson at Delta’s upcoming annual meeting.
As we reflect on the Main Cabin product. Importantly, we saw improvement in cost performance and reduced non-fuel unit cost growth below the rate of general inflation. We continued to strengthen our brand, achieving a record high domestic net promoter score in 2018, with improvement in all geographic regions. And we continue to launch partnerships with carriers throughout the world — we started a joint venture with Korean Air, signed an agreement with WestJet in Canada and filed for regulatory approval to bring together the separate joint ventures with Virgin Atlantic and Air France-KLM.
We broke records, flying more people than ever and widening the gap with the competition. We unveiled new routes to destinations across the globe and took delivery of world-class aircraft including the A220 as we continue to transform our fleet. We opened a state-of-the-art engine shop and outfitted 60,000 people in stylish and functional new uniforms. We deployed innovative new technology to our pilots, flight attendants and airport agents, enhanced our airports and forged new relationships with other carriers as we accelerate our global expansion. We2021, Delta made significant progress levelingin its recovery from the playing fieldimpact of the pandemic. The Board remains appreciative of the dedication and hard work of all Delta employees and the leadership of Delta’s management during this unprecedented time.
With the company’s business continuing to recover from the depths of the pandemic, the Board’s focus remains on long-term strategy and oversight of other matters of importance to our shareholders. The company’s financial recovery remains our highest priority. We are also mindful that ESG issues, particularly environmental sustainability and human capital management, including diversity, equity and inclusion, are top of mind for many of you — as they are for us. We appreciate the views that many of you have shared with state-subsidized Gulf region airlines.us on these topics over the last year.
BecauseIn light of the Board’s continuing focus on ESG topics, we have revisited and clarified the allocation of oversight responsibilities among our people are our foundation, for 2018 we paid industry-leading compensation, including more than $1.3 billioncommittees. As is discussed in profit sharing. For our shareholders, we produced an after-tax return well above our cost of capital, paid $900 milliongreater detail in dividends and repurchased $1.6 billion in shares. We continued to strengthen our balance sheet, lowering our cost of borrowing and improvingthis proxy statement, oversight over ESG matters aligns with the funded statusgeneral responsibilities of our pension plan.existing committees as follows:
Throughoutitall,DeltapeopleworkedtirelesslytomaintainourunmatchedstandardThe Audit Committee has oversight ofexcellence,safetyandreliability.ThehumantouchthatDeltapeopleprovideisunique,andit’swhatcontinuallysetsusapart.Ourculture—dedicatedtoservantleadership,apassionforourbusiness,supportingourcommunitiesandbuildingasustainablefuture—isanadvantagenoonecanmatch.
Our powerful consumer brand, combined with our unmatched competitive advantages, including the best employees in the business, industry-leading operational reliability, a strong global network, growing customer loyalty corporate ethics and an investment grade balance sheet, support continued advancement as we create long-term valuestandards of conduct, cybersecurity risks and aspects of reporting of environmental sustainability and social matters.
The Corporate Governance Committee has responsibility for shareholders. Every day, we become more passionate about running the best airline on the planetgovernance practices and serving as many customers as possible.
Sincerely,
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LETTER FROM THE NON-EXECUTIVE CHAIRMAN OF THE BOARD
As the non-executive Chairman of the Board, thank you for your support of Delta Air Lines. Our Board strives to oversee Delta in a responsible and transparent way to help the company achieve long-term value for you.
The Board and its five committees regularly engage management in robust discussions about Delta's risks, strategies, priorities and opportunities, both domestically and internationally. We also work hard on your behalf to oversee safety and security, executive compensation and succession, and environmental, social and governance (ESG) matters,procedures as well as oneoversight of our key competitive advantages — the Delta culture.
And we take our responsibilities seriously regarding Board refreshmentenvironmental sustainability opportunities and succession planning. Seven of our current 12 Board members joined the Board in the last five years,risks, political engagement and almost half our Board is diverse.
We are proud of our foundation of good governance that includes electing all directors annually by majority voting, providing for proxy access, having an anti-hedgingcontributions and anti-pledging policy for all employees and the Board, imposing meaningful stock ownership guidelines for executive officers and the Board, requiring outside director retirement at age 72 and prohibiting ownership of competitor airlines’ stock by the Board and officers.
Two recent developments further enhance this solid foundation:
In February, the Board amended Delta’s bylaws to allow holders of 20% of the outstanding common stock to call a special meeting of shareholders.charitable contributions.
In 2018, our Corporate GovernanceThe Finance Committee added to its charter to includehas oversight of Delta’ssignificant investments, including acquisition of new, more fuel efficient aircraft and significant investments in new technologies.
The Personnel & Compensation Committee has oversight of talent development and human capital management, including diversity, equity and inclusion and general wellbeing.
The Safety & Security Committee has oversight of employee and customer safety and public health matters.
Our committee structure and allocation of responsibilities provides for involvement of all Board members in oversight of ESG obligations.matters. We will continue to monitor our structure to make sure that oversight responsibilities are appropriately assigned.
“ The Board remains appreciative of the dedication and hard work of all Delta employees.”
We engage our shareholders in many ways,are excited that Greg Creed and Leslie Hale have joined the Delta Board and look forward to their contributions for years to come. We continue to focus on bringing a wide range of strong experiences, skills, qualifications, and backgrounds to the Board. We are also committed to continuing the enhancement of the diversity of the Board.
Because of the unusual circumstances of the past two years, the Board has asked me to continue to serve for one more year. I am very grateful to Bill Easter that he has agreed to continue his service as well. The dedication and hard work of the entire Board makes me proud to be a part of this outstanding group working on your behalf.
As we look forward to the second half of the year and Delta’s continued progress on its recovery, we welcome your engagement on issues of importance to you and the company. We encourage you to share suggestions and concerns with us. In particular, I want towe encourage you to review ourthis proxy statement, and vote.vote in the upcoming meeting.
WeAs always, we deeply appreciate your support as shareholders and customers.
Sincerely,
2019 PROXY STATEMENT 3
| ir.delta.com | 2022 PROXY STATEMENT | 2 |
2021 was a pivotal year for Delta Air Lines. The remarkably swift development and distribution of safe, effective vaccines inspired hopes that a return to normal life was finally on the horizon.
While the year was more turbulent than many had hoped, with new variants complicating the recovery, it nonetheless marked a major turning point and laid the groundwork for significant progress in 2022 as the world moves past the pandemic era toward treating COVID as a manageable virus.
Once again, the people of Delta stepped up and led the industry throughout a year that was marked by remarkable accomplishments amid the slow but steady recovery, including:
Restarting the operation to accommodate an influx of returning customers ahead of a robust and successful summer travel season, and adding 15,000 new team members since the start of 2021.
Managing our network and policies to accommodate travel demand in an often-volatile environment, ensuring that flights were available to desired destinations while providing customers the flexibility to book Delta with confidence.
Improving Delta’s status as the No. 1 premium airline by widening the gap with the competition in customer service and premium product offerings, including high-speed Wi-Fi, on-board food and beverage choices, expanded digital tools, and the delivery of our first state-of-the-art A321neo aircraft.
Accelerating critical airport capital projects, including new and enhanced terminals in Salt Lake City, Los Angeles, New York and Seattle, and other improvements throughout the system, ensuring that returning customers will experience world-class service on the ground as well as in the air.
Leading the industry in financial performance as the only major U.S. airline to achieve profitability in the second half of the year, enabling a special employee profit-sharing payout in February.
Thanks to these efforts, the people of Delta were recognized throughout the year for their excellence, including honors from J.D. Power, Fortune’s World Most Admired Companies, the Wall Street Journal, and Business Travel News, among many others.
Looking ahead, the recovery continues to accelerate in 2022, with consumers returning to travel, international borders reopening, corporate offices welcoming back employees and business travelers reclaiming the skies. The investments Delta has made over the past two years in our people, our customers and our financial health are paying off as more consumers choose to invest their time, resources and loyalty with us as they reclaim their lives.
“ It was a year that revealed our character and reminded us that our people are our most powerful asset.”
While we continue to lead in the recovery and build the future of air travel, it’s clear that our path forward must be a sustainable one. That’s why amid the challenges of the pandemic, Delta has led the way in building a foundation for sustainable aviation with our Flight to Net Zero, announcing our intention to set medium- and long-term science-based targets, including a net-zero 2050 target in alignment with the United Nations Race to Zero — Business Ambition for 1.5°C campaign. And we are continuing to take action to advance diversity, equity and inclusion and to reflect the world and the passengers we serve. More details on these efforts will be available in our 2021 ESG Report.
As we have for nearly a century, Delta will be guided throughout the year by our people-focused culture of service. Our entire global family, and their never-ending drive to Keep Climbing, are reshaping the future of air travel for generations to come.
Thank you for your support throughout the past year. We look forward to speaking with you at our annual meeting in June.
Sincerely,
| 2022 PROXY STATEMENT | 3 |
| ir.delta.com |
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As a global airline based in the U.S., we connect customers across our expansive global network. In 2019, prior to the onset of the COVID-19 pandemic, we served approximately 200 million customers and were the world’s largest airline by total revenues and the most profitable, with five consecutive years of $5 billion or more in pre-tax income from 2015 through 2019.
Following the onset of the COVID-19 pandemic in 2020, Delta responded quickly to protect our people, our customers and our financial position, driven by the unwavering dedication and commitment of the Delta people. The pandemic required significant adjustments to our network and operations in 2020. We made significant progress in restoring our network in 2021, as travel restrictions eased and vaccine programs became widespread both domestically and in international markets.
With operational excellence, best-in-class service and a 90-year historycommitment to ensuring the health and safety of customer service, Delta provides scheduled air transportation for passengersour customers, we have continued to earn our customers’ trust and cargo throughoutpreference by delivering the United States and around the world. Powered by“Delta Difference.” We have five competitive advantages that support our approximately 89,000 Delta people, our network is supported by a fleet of aircraft that is varied in size and capabilities, giving us flexibility to adjust aircraft to the network. Our relationships with foreign carriers improve our access to international markets, allowing us to globally integrate air transportation services. Over the years, we’ve built a strong financial foundation, record customer satisfaction, more resilient, higher margin revenue streams, a global network and an investment grade balance sheet.trusted consumer brand.
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 | GLOBAL NETWORK | |
We and our alliance partners collectively serve over 130 countries and territories and over 800 destinations around the |
We
To support this network, even prior to the pandemic we began refreshing our fleet by acquiring new and more fuel efficient aircraft with increased premium seating to replace older aircraft and to reduce our fleet complexity with fewer fleet types. Our new aircraft are on average 25% more fuel efficient per seat mile than retired aircraft. | |
 | OPERATIONAL RELIABILITY | |
Our reliability was a key component to Delta being named the Top U.S. Airline of 2021 by the Wall Street Journalin We have intensified our focus on ensuring the health and safety of our customers, including the creation of our industry-leading cleanliness standards through the Global Cleanliness organization and the implementation of the Delta CareStandardSMto ensure a consistently safe and sanitized experience across our facilities and aircraft. | ||
 | CUSTOMER LOYALTY | |
In 2021, we were recognized as No. 1 in customer satisfaction among airlines in North America Our | ||
 | FINANCIAL FOUNDATION | |
Over the decade prior to the pandemic, we fundamentally transformed our business
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2019 PROXY STATEMENT 5
Delta people rose to the challenges of 2018 to produce excellent financialresults, record-setting operationalreliability and strong improvementsincustomersatisfaction. We confirmed our position as a reliable, customer-focused airline that is producing strong profits and cash flows, enabling improvedbalancesheetstrength and producing solidreturnofcapitaltoshareholders.
Ourfinancialhighlightsfromthepastyearunderscoreourcontinuedprogress.
Below are some of the categories of performance measures included in our incentive compensation plans that demonstrate our pay for performance philosophy. See pages 32-33 for further information about the performance measures included in these plans.
OPERATIONAL RELIABILITY AND CUSTOMER SERVICE
CONTINUED BALANCE SHEET PERFORMANCE
See “Supplemental Information about Financial Measures” on page 67 for reconciliations of non-GAAP measures and reasons we use them.
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Director NomineesItem 1 Election of Directors
Name and Primary Occupation | Age | Director Since | Other Public Boards | Committees | |
 | EDWARD H. BASTIAN CEO of Delta | 64 | 2010 | - |
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 | FRANCIS S. BLAKE Non-Executive Chairman of the Board of Delta; | 72 | 2014 | 1 | • Corporate Governance • Finance • Personnel & Compensation |
 | ASHTON B. CARTER Director of the Belfer Center for Science and International Affairs at Harvard Kennedy School | 67 | 2017 | 1 | • Audit • Safety & Security • Corporate Governance |
 | GREG CREED Former Chief Executive Officer, Yum! Brands, Inc.
| 64 | 2022 | 2 | • Audit • Personnel & Compensation |
 | DAVID G. DEWALT Founder and Managing Director of NightDragon Security; Managing Director of AllegisCyber Capital | 58 | 2011 | 3 | • Safety & Security • Audit • Corporate Governance |
 | WILLIAM H. EASTER III Former Chairman, President and | 72 | 2012 | 1 | • Audit Committee • Corporate Governance • Safety & Security |
 | LESLIE D. HALE President and Chief Executive Officer of RLJ Lodging Trust | 50 | 2022 | 2 | • Finance • Safety & Security |
 | CHRISTOPHER A. HAZLETON Captain, Airbus 321, Delta | 54 | 2019 | - | • Safety & Security |
 | MICHAEL P. HUERTA Former Administrator of the | 65 | 2018 | 1 | • Audit • Safety & Security • Corporate Governance |
 | JEANNE P. JACKSON Former President, Senior Strategic Advisor | 70 | 2017 | 1 | • Finance • Personnel & Compensation |
 | GEORGE N. MATTSON Co-Founder of NextGen Acquisition Corp. and NextGen Acquisition Corp. II prior to their mergers with Xos, Inc. and Virgin Orbit Holdings, respectively | 56 | 2012 | 3 | • Finance • Corporate Governance • Personnel & Compensation |
 | SERGIO A. L. RIAL Non-Executive Chairman of the Board of Banco Santander (Brasil) | 61 | 2014 | 3* | • Personnel & Compensation • Corporate Governance • Finance |
 | DAVID S. TAYLOR Executive Chairman of the Board of The Procter & Gamble Company | 64 | 2019 | 1 | • Finance • Safety & Security |
 | KATHY N. WALLER Executive Director of the Atlanta Committee for Progress; former CFO of The Coca-Cola Company | 63 | 2015 | 3 | • Audit • Corporate Governance • Personnel & Compensation |
* Including Santander parent-sub | |||||
2019 PROXY STATEMENT 7
| ir.delta.com | 2022 PROXY STATEMENT | 6 |
Board of Directors and Governance Highlights
Delta has a history of a strong, independent Board, composed of seasoned members with diversity of experiences. The Board is committed to sound corporate governance practices in line with evolving best practices.
Corporate Governance and Board Practices
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Our executive compensation program is based on the philosophy that we can best achieve our short-term and long-term business goals which we refer to as our Flight Plan, by closely linking pay to performance and aligning the interests of all Delta employees, including executive officers, with those of our customers and shareholders.
Last year, the Personnel & Compensation Committee decided not to alter the performance measures or goals of our outstanding short-term and long-term incentive awards, despite the pandemic negatively impacting award values significantly. For 2021, the Committee reviewed our executive compensation program to ensure that it achieves the balance of rewarding and retaining our executives while still placing the majority of their compensation at risk. As a result, the Personnel & Compensation Committee made adjustments to our annual and long-term incentive plans for 2021 that address these objectives as well as the continued uncertainty of the pandemic’s ongoing impact on our business and the complexity of developing meaningful incentive compensation opportunities in such an environment.
For additional information on the changes to our annual and long-term incentive plans and other decisions regarding 2021 executive compensation, see the “Compensation Discussion and Analysis” section beginning on page 23 of this proxy statement.
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We value our relationships with our shareholders, and we have a long-standing practice of active engagement with them. Our engagement allows us to better understand our investors.shareholders’ priorities, perspectives and concerns, and positions us to effectively address issues that are important to our shareholders. OurDuring 2021, we met virtually, or initiated contact, with shareholders representing approximately 53% of our outstanding shares, including actively managed funds, index funds, public pension funds, and socially responsible investment funds. seniormanagementmetThis represented engagement withanalystsandinvestorsat institutions holding 83% of the shares held by all of ourannualInvestorDayinDecember2018andmorethan10industryconferencesthroughout2018. institutional shareholders. We also have dedicated resources to engage with allour shareholders, including individual shareholders, through monitoring of communications received by our investor relations e-mail and using various mediasustainability departments, which collectively responded to conveymore than 150 inquiries during 2021. The table below summarizes key investment messages to a broader audience. In 2018, Delta was named as a “Most Honored Company” by the financial journal InstitutionalInvestor,which ranked Delta's investor relations effort number 1 in the airline category.aspects of these engagement efforts during 2021.
2019 PROXY STATEMENT 9
| ir.delta.com | 2022 PROXY STATEMENT | 8 |
We are committed to taking care of our people, being a good steward of the environment and being a positive force in our communities and a great place to work and fly. Whethercommunities. This commitment is based on our culture of putting people first in all we do — whether it’s our employees, the nearly 200 millionmillions of customers who trust us with their travel each year, or the millionscommunities where we live, work and serve. The Board of Directors is committed to sound corporate governance in line with evolving best practices. The Board of Directors understands and appreciates the importance of ESG matters as well as their significance to our various stakeholders, including our investors. As described further on pages 55 through 61, the Board of Directors includes several directors with skills and experience relevant to these topics. In addition, the Board of Directors has, and continues to gain, knowledge about these evolving areas through, among other things, regular briefings and discussions with internal subject-matter experts. The Board also has access to external resources and education on a variety of these matters.
We report on our efforts with respect to ESG matters through an annual ESG report that is informed by the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) frameworks and standards. We have expanded our evaluation of climate risks and opportunities through a climate scenario analysis that considered both physical and transition risks and worked to develop a decarbonization pathway, all of which will be described in our 2021 ESG Report. In addition, we recently released our climate lobbying report, which describes our global advocacy activities and policy engagements — both direct and indirect — that support and complement our ambitious climate goals. During 2021, we also regularly engaged with shareholders and other stakeholders on ESG trends and opportunities. For more information on ESG matters, including with respect to our climate strategy, risks, opportunities, metrics and targets, please see our 2021 ESG Report, available at www.delta.com/sustainability.
We believe that Delta people are our strongest competitive advantage, and they have created a culture that is the foundation of our success. We have long understood that taking care of our people also leads to satisfied customers and other stakeholders. In 2021, as our business began to recover from the impact of the COVID-19 pandemic, we hired approximately 11,000 new full-time employees across our business, including pilots, flight attendants, and gate and reservation agents.
Our dedication to safety, security and public health is spearheaded by our executive leadership team, including through our Personal Safety Steering Committee and our Operational Safety Committee, and overseen by the Safety & Security Committee of our Board of Directors. We have led the airline industry for many years in employee safety and strive for world-class personal safety performance.
To successfully integrate the influx of new employees during 2021, we adapted many of our safety programs and leveraged the maturity of our risk-based Safety Management System to account for a changing workforce and processes shaped by the COVID-19 pandemic. Delta continued to make significant investments throughout the year in training for employees joining the Delta team as well as leadership development programs and programs to reinforce safety culture.
During 2021, we also continued to prioritize the safety and health of our employees by offering an extensive employee COVID-19 testing program and vaccination program, with on-site vaccination centers in all major employee centers opening promptly following vaccine availability. In addition, we partnered with the state of Georgia to host the state’s largest COVID-19 vaccination site while steadily increasing the vaccination rate among our employees, providing pay protection programs for employees diagnosed with, exposed to or at high risk from COVID-19 and offering free flu shots for all U.S. employees. In February 2021, we hired Dr. Henry Ting as our Chief Health Officer to reimagine our approach to health and wellbeing. We have a framework in place to oversee our wellbeing strategy, which includes oversight from our Wellbeing Council and the Personnel & Compensation Committee of the Board.
Beyond employee safety and health, we proactively reduce risks by identifying, assessing, mitigating and/or eliminating hazards that may cause incidents, accidents or injuries to customers. In 2021, we safely transported more than 135 million customers system wide. Following the onset of the COVID-19 pandemic, we intensified our focus on the health and safety of our customers, including the creation of our industry-leading cleanliness standards through the Global Cleanliness organization and the implementation of the Delta CareStandardSM to ensure a consistently safe and sanitized experience across our facilities and aircraft through the use of science-backed cleaning technologies and protocols.
| 2022 PROXY STATEMENT | 9 |
Diversity, Equity and Inclusion
As a global airline, we are in the business of bringing people together, and we believe our business should reflect the diversity of our customer base. To achieve this goal, we seek diverse talent internally and externally in an effort to achieve broader representation throughout our organization.
The Personnel & Compensation Committee provides ongoing oversight with respect to policies and strategies relating to talent development and human capital management, including diversity, equity and inclusion. Our Diversity, Equity & Inclusion Council is the senior cross-divisional group that represents the operational, corporate and commercial organizations of our business and is charged with ensuring our diversity, equity and inclusion priorities are relevant and embedded throughout the company, in partnership with our Diversity, Equity & Inclusion Office, which is led by Keyra Lynn Johnson, our Vice President and Chief Diversity, Equity and Inclusion Officer. The council meets regularly to evaluate corporate and divisional metrics, programs and proposals that align with our diversity, equity and inclusion strategy.
We remain focused on our strengthened commitment to be an anti-racist, anti-discrimination organization and want all of our employees to feel a sense of belonging at Delta. We have tools and processes in place to evaluate our progress on diversity, equity and inclusion matters, including with respect to our employees’ sense of belonging. Key elements of our diversity, equity and inclusion strategy to drive this vision include the following:
Reimagining our talent strategy, such as by requiring hiring candidate slates and interview panels to reflect diversity and creating new pathways to certain roles by removing college degree requirements;
Rebuilding Delta to reflect the world we serve by closing diversity gaps in senior leadership positions through increased representation of women and under-represented groups in those roles, including doubling the number of Black officers and director-level employees by 2025 as compared to 2020;
Promoting inclusion through education, training and development opportunities, including enhanced inclusion training attended by more than 62,000 Delta employees during 2021, and through insights leveraged from our employee resource groups, which we refer to as business resource groups; and
Driving accountability for equitable outcomes by reviewing and revising our systems, practices and policies in support of our commitment to diversity, equity and inclusion and with a focus on achieving equitable outcomes.
As part of our commitment to transparency, and based on feedback from external stakeholders, we have begun publishing on our website our latest EEO-1 Report as submitted to the U.S. Equal Employment Opportunity Commission.
Governance of Environmental Sustainability Program
We have implemented a robust governance framework at both the Board and management levels with respect to our environmental sustainability program:
Regular board-level oversight provided primarily through (i) the Corporate Governance Committee, which evaluates environmental sustainability strategy, goal setting, opportunities and risks as well as efforts and progress, (ii) the Audit Committee, which oversees the reporting of environmental and social matters in Delta’s SEC filings, and (iii) the Finance Committee, which oversees investments, including acquisition of new, more fuel efficient aircraft and significant investments in new technologies.
Robust management-level oversight provided through the ESG Council, the Carbon Council and the Risk Council, which report to the Delta Leadership Committee (DLC) and are composed of members of the DLC as well as other senior executives from across the organization who make uphelp to guide cross-functional working groups on climate strategy and execution as well as related risk mitigation efforts.
Global Sustainability team integrated throughout our business and led by Pam Fletcher, our Senior Vice President and Chief Sustainability Officer, who serves on the DLC and each of the ESG, Carbon and Risk Councils.
| ir.delta.com | 2022 PROXY STATEMENT | 10 |
During 2021, we built on our previously announced plan to invest $1 billion through the end of 2030 toward airline carbon neutrality by announcing our intention to set new medium- and long-term climate goals that are aligned with the applicable framework of the Science Based Targets initiative (SBTi).
Long-term net zero goal: Achieving net zero greenhouse gas (GHG) emissions across our airline operation and its value chain (Scopes 1, 2 and 3) no later than 2050, as outlined by the SBTi Net Zero Standard Criteria and in alignment with the United Nations Race to Zero — Business Ambition for 1.5°C campaign.
Medium-term emissions intensity goal: As a milestone on the path toward net zero, we are seeking to reduce GHG emissions intensity by 2035 as compared to 2019, based on lifecycle jet fuel emissions of GHGs in accordance with SBTi guidance for the aviation industry and in line with the Paris Agreement’s goal of limiting global warming to well below two degrees Celsius above pre-industrial levels.
We have submitted both goals to SBTi for validation, but we are unable to predict the outcome of that process and when it will be completed. These proposed goals are supported by a robust sustainable aviation fuel (SAF) goal. Our goal is to replace 10% of our jet fuel consumption with SAF by the end of 2030, with the aim of half of that amount from SAF that achieves at least an 85% reduction in lifecycle emissions relative to conventional jet fuel, subject to availability and feasibility.
The global aviation industry is viewed as a hard-to-abate sector, meaning it is innately difficult to decarbonize. We expect our path toward achievement of these ambitious climate goals to include the following levers, with the fleet and fuel levers expected to play the most significant roles:
Fleet: Currently, fleet renewal provides the largest impact on reducing emissions and emissions intensity. In 2020, we retired more than 200 of our less efficient aircraft ahead of schedule, improving emissions intensity and fuel efficiency on an available seat mile basis in 2020 and 2021, as compared to 2019. We expect our fleet renewal plans to continue to improve fuel efficiency in future periods.
Fuel: SAF is central to reducing the lifecycle carbon emissions from aviation fuel; however, it is not currently available at the scale or cost necessary to meet the industry’s needs. To replace 10% of our jet fuel consumption by the end of 2030, Delta will require at least 400 million gallons of SAF annually. We presently have agreements in place with a number of suppliers for the production of SAF, subject to third-party investment and timely facility development.
Operational Initiatives: Delta has launched a cross-functional senior leadership team, known as the Carbon Council, with the aim of executing and tracking operational initiatives to reduce jet fuel consumption and improve our GHG emissions intensity. This work supplements industry-wide efforts to modernize the air traffic control (ATC) system, which would allow for more fuel efficient and therefore less carbon intensive flying.
Technological Innovation: We plan to evaluate emerging technologies, such as synthetic hydrocarbon fuels, direct air capture (DAC) and carbon capture and sequestration (CCS) to support our efforts to achieve our long-term climate goals. For instance, we recently announced a collaboration with Airbus on research to accelerate the development of a hydrogen-powered aircraft and the ecosystem it would require.
Carbon Offsets: In support of our previously announced goal to invest $1 billion toward airline carbon neutrality through the end of 2030, Delta has purchased and retired approximately $135 million of verified carbon offsets related to approximately 27 million metric tons of our airline’s 2021 carbon emissions, including carbon offsets focused on preventing deforestation. We expect much of the future expenditures in support of this goal to be focused on solutions other than carbon offsets as we aim to progress the climate goals referenced above.
Stakeholder Engagement and Coalition Building
To advance these ambitious goals, we are committed to engaging our stakeholders and building coalitions to help drive down cost and increase production and consumption of alternative fuels and new technologies.
We partner with corporate customers to advance our environmental sustainability goals. We signed agreements with 35 corporate customers and travel agencies as of March 2022 to fund SAF that will be applied towards GHG emissions from their business travel on Delta.
We participate in sector-specific and multi-sectoral efforts to progress toward our climate goals and to influence climate and sustainability policy development, including Clean Skies for Tomorrow, the Aviation Climate Taskforce, the First Movers Coalition and the LEAF Coalition.
We engage with industry, government and trade associations on climate and environmental policy. We have recently advocated in support of several pieces of legislation to advance our climate goals, including legislation to promote development of the SAF market via tax incentives and grants.
We collaborate with the FAA and the airline industry to modernize the ATC system, central to reducing fuel consumption and GHG emissions in the near-term, including through forums such as the NextGen Advisory Committee. We have also advocated for NextGen equipage funding for regional jets to accelerate the implementation of a modernized ATC system.
| 2022 PROXY STATEMENT | 11 |
As we connect people with communities, experiences and each other, we are committed to doing our part to build a better world. Giving back to the communities where we live, work and serve — making people our priority has always been the backdrop for all our efforts.
Our people and our culture are the foundation of our success. Our culture also involves giving back to the communities we serve as well as serving important global initiatives. In 2018, Delta and The Delta Air Lines Foundation contributed $50 million asis part of our annual commitment to give one percent of net income to key charitable organizations in our communities. We also have been recognizedasanationalleaderinourcommitmenttoanti-humantraffickingefforts,whichincludescontinuingtotrainourfront-lineemployeestohelpidentifyandreportsuspectedinstancesofhumantrafficking.
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Environmental, Social and Governance (ESG) Sustainability Highlights
Delta recognizes alignment between the creation of long-term value for our shareholders and positively impacting our people, the environment and our communities. At our foundation is a strong set of core values enumerated by our founder 90 years ago, which we live by today.
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Governing the Sustainability Program
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Sustainability Recognition in 2018
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More information about our sustainability practices is in our Corporate Responsibility Report, reporting GRI, SASB and TCFD indicators, which can be foundculture at www.delta.com/sustainability, but is not incorporated by reference into this proxy statement.
2019 PROXY STATEMENT 11
PROPOSAL 1 — ELECTION OF DIRECTOR
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We are seeking your support for the election of 12 director nominees who the Board, acting on the recommendation of Corporate Governance Committee, has nominated to serve on the Board of Directors for a one-year term.
All Delta directors are elected annually. At the annual meeting, each director will be elected by the vote of a majorityDelta. The graphic below illustrates some of the votes cast. This means the number of votes cast “for” a director must exceed 50% of the votes cast with respect to that director (excluding abstentions). Each director elected will hold office until the next annual meeting of shareholdersways in which Delta and the election of his or her successor. See page 61 for more information about voting at the annual meeting.its people gave back in 2021:
Delta’s Bylaws provide that any director not receiving a majority of the votes cast at the annual meeting must offer to tender his or her resignation to the Board of Directors. The Corporate Governance Committee will make a recommendation to the Board of Directors whether to accept the resignation. The Board will consider the recommendation and publicly disclose its decision within 90 days after the certification of the election results.DELTA’S COMMUNITY IMPACT
The Corporate Governance Committee recommends to the Board of Directors nominees for election to the Board.
DeltabelieveseachcurrentnomineefortheBoardofDirectorshasthefollowingattributes:
integrity, honesty and adherence to high ethical standards
extensive business acumen and sound judgment
a track record of service as a leader in business or governmental settings
The Committee seeks nominees who have the skills and experience to assist management in the operation of Delta’s business and to provide input on Delta’s strategy, among other matters. In accordance with Delta’s Corporate Governance Principles, the Committee and the Board assess potential nominees (including incumbent directors) based on factors such as the individual’s business experience, character, judgment, diversity of experience, international background and other matters relevant to the Board’s needs and objectives at the particular time. Independence, financial literacy, and the ability to devote significant time to Board activities and to the enhancement of the nominee’s knowledge of Delta’s business are also factors considered for Board membership.
In its succession planning role, the Committee regularly considers potential candidates for the Board in light of the company’s new and evolving risks, strategies and operations. The Committee balances the desire for continuity on the Board with the benefits of fresh perspectives and additional experiences to align with the changing business.
The Committee retains third-party search firms from time to time to assist in identifying and preliminarily screening potential Board members who have experience that would complement and enhance the current Board.
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IMPORTANTSKILLSANDEXPERIENCESOFINDEPENDENTDIRECTORS
Delta has a history of a strong, independent Board, composed of experienced members who are diverse with respect to background, skills, experiences, gender, race and ethnicity. The following chart showsBoard is committed to sound corporate governance in line with evolving best practices.
After pausing the specific skills and experiencesrefreshment of the Board currently believes are important for independent nominees collectivelyduring the pandemic, Leslie D. Hale and Greg Creed have recently joined the Board, bringing strong experience and skills. In order to possess for effective governance of Delta inprovide continuity as we continue to recover from the current business environment. The matrix also provides a high level summaryimpact of the important skills and experiences of our independent nominees topandemic, the Board which contribute tohas waived the sound governanceretirement age for Mr. Blake and Mr. Easter. As the Chair of Delta. It is not an exhaustive list of each nominee's contributions to the Board.
2019 PROXY STATEMENT 13
After considering the recommendationsBoard and of the Corporate Governance Committee, Mr. Blake’s leadership of the Board sethas been critical during the number of directors at 12 as ofpandemic. Likewise, Mr. Easter has played a crucial role in leading the date of the annual meeting and nominated all current directors to stand for re-election except Douglas R. Ralph, who is retiring from the Board.
The Board believes that each of the nominees is qualified to serve as a director andAudit Committee. Their ongoing service will be able to stand for election. If not,enable the Board may name a substitute nominee or reduce the number of directors. If a substitute is named, the proxies will vote for the substitute nominee. In addition to the specific skillscontinue to function efficiently and experience for each nominee listed in the chart on the prior page, qualifications of each nominee that were considered by the Board follow each nominee’s biographical description on the following pages.
Delta, the Air Line Pilots Association, International (ALPA), the collective bargaining representative for Delta pilots, and the Delta Master Executive Council, the governing body of the Delta unit of ALPA (Delta MEC), have an agreement whereby Delta agrees (1) to cause the election to the Board of Directors of a Delta pilot designated by the Delta MEC who is not a member or officer of the Delta MEC or an officer of ALPA (Pilot Nominee); (2) at any meeting of shareholders at which the Pilot Nominee is subject to election, to re-nominate the Pilot Nominee or nominate another qualified Delta pilot designated by the Delta MEC to be elected to the Board of Directors and to use its reasonable best efforts to cause such person to be elected to the Board; and (3) in the event of the Pilot Nominee’s death, disability, resignation, removal or failure to be elected, to elect promptly to the Board a replacement Pilot Nominee designated by the Delta MEC to fill the resulting vacancy.
Pursuant to this provision, the Delta MEC has designated Christopher A. Hazleton to be nominated for election to the Board at the annual meeting. If elected, Mr. Hazleton would succeed Mr. Ralph, who will retire from the Board after the annual meeting.
The compensation of Mr. Ralph and Mr. Hazletoneffectively as Delta pilots is determined under the collective bargaining agreement between Delta and ALPA. During 2018, Mr. Ralph received $448,245 in compensation (which includes: $335,508 in flight earnings, $50,634 in shared rewards/profit sharing payments and $62,103 in Delta contributions related to a defined contribution plan) and Mr. Hazleton received $379,608 in compensation (which includes: $287,619 in flight earnings, $39,629 in shared rewards/profit sharing payments and $52,360 in Delta contributions related to a defined contribution plan). As Delta pilot representatives on the Board, Mr. Ralph and Mr. Hazleton are not separately compensated for their service as a director.leadership responsibilities transition.
TheBoardbelievesthatthecombinationofbackgrounds,skillsandexperiencesofthenomineesproducesaBoardthatiswell-equippedtoexerciseoversightresponsibilitiesonbehalfofourshareholdersandotherstakeholders.Inadditiontothechartonthepriorpage,weprovideinformationinthefollowingpagesabouteachnomineefordirector,includingthespecificexperiencethatledtheBoardtoconcludethenomineeshouldserveasadirectorofDelta.Corporate Governance Highlights
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2019 PROXY STATEMENT 15
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2019 PROXY STATEMENT 17
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During 2018,2021, the Board of Directors met 9nine times. Each director who served on the Board during 20182021 attended at least 75% of the meetings of the Board of Directors and the committees on which he or she served that were held during his or her tenure on the Board.Board or relevant committee. It is the Board’s policy that directors are encouraged to attend the annual meeting. All of Delta’s directors attended the virtual annual meeting in 2018.2021. During the year, the Board routinely held executive sessions without the Chief Executive Officer or any other management director.Officer. Mr. Blake presided at these sessions as non-executive Chairman of the Board.
In addition to formal meetings, the Board members participated in bi-monthly update calls with management during the first half of 2021 and continued to hold monthly calls in the second half of the year.
Because we believe operating pursuant to sound governance practices benefits the long-term interests of our shareholders, for many years we have chosen to elect an independent, non-executive Chairman of the Board separate from our Chief Executive Officer.
We believe the non-executive Chairman of the Board plays an important governance leadership role that enhances long-term shareholder value.
The Chairman’s responsibilities include:
chairing meetings of non-management directors (executive sessions)
presiding at the annual meeting of shareholders
briefing the Chief Executive Officer on issues raised in executive sessions
in collaboration with the Corporate Governance Committee, committee chairs, and the Chief Executive Officer scheduling Board meetings,and the Chief Legal Officer, setting Board agendas and strategic discussions and providing a review of pre-meeting materials delivered to directors
overseeing annual Board, committee and Chief Executive Officer performance evaluations and succession planning
managing the Board and committee oversight of risks
recommending appropriate governance policies and practices, including committee structure and responsibilities
overseeing the avoidance of conflicts of interestsinterest
recommending Board committee and committee chair assignments
facilitating director discussions inside and outside the boardroom, managing the relationship between the Chief Executive Officer and the Board, consulting with the Chief Executive Officer and serving as a counterweight as appropriate
overseeing the process for selecting new Board members
calling meetings of the Board and shareholders
chairing the Corporate Governance Committee
carrying out other duties requested by the Chief Executive Officer and the Board
The Board of Directors has established the Audit, Corporate Governance, Finance, Personnel & Compensation and Safety & Security committees to assist it in discharging its responsibilities. The number of meetings forheld by each of these committees in 20182021 and theirthe committee’s primary responsibilities are listed beginning on the next page.
A completedetailed list of the responsibilities of each committee can be found in the committee charters, which are available in the corporate governance section of our website at ir.delta.com/governance/.
All members Our Certificate of the Audit,Incorporation, Bylaws, Corporate Governance Principles, codes of ethics and Personnel & Compensation Committeesbusiness conduct and director independence standards are non-employee directors who are independent, as definedalso available in the New York Stock Exchange (NYSE) listing standards and Delta’s director independence standards. The memberscorporate governance section of the Audit Committee also satisfy the additional independence requirements set forth in rules under the Securities Exchange Act of 1934 Act (the 1934 Act)our website at ir.delta.com/governance/. The members of the Personnel & Compensation Committee also satisfy the additional independence requirements set forth in rules under the Act.
2019 PROXY STATEMENT 19
| ir.delta.com | 2022 PROXY STATEMENT | 14 |
In early 2022, the Board reviewed and, as appropriate, updated the allocation of oversight responsibilities for various ESG matters. These responsibilities are identified in bold type in the summary below.
AUDIT COMMITTEEAudit Committee
Members | Primary Responsibilities |
William H. Easter III* (Chair)
Ashton B. Carter Greg Creed David G. DeWalt* Michael P. Huerta Kathy N. Waller* Meetingsin
| › oversees our financial reporting and disclosure processes, including the appointment of our independent auditors, the review of the audit and work of our internal audit department and the adequacy and effectiveness of our internal controls over financial reporting › oversees compliance with procedures and processes pertaining to corporate ethics and standards of conduct, including regular review of reports on adherence to these standards › reviews enterprise risk management processes and discusses major risk exposures with management › reviews cybersecurity risks and the security and operations of our information technology systems › oversee the reporting of environmental and social matters in our SEC filings › reviews and, if appropriate, approves or ratifies possible conflicts of interest involving members of the Board or executive officers and related party transactions that would be subject to disclosure under Item 404 of Regulation S-K
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*Audit Committee Financial Experts | TheAuditCommitteeReportcanbefoundonpage 65. |
CORPORATE GOVERNANCE COMMITTEECorporate Governance Committee
Members | Primary Responsibilities |
Francis S. Blake (Chair)
David G. DeWalt William H. Easter III Michael P. Huerta George N. Mattson Sergio A. L. Rial Kathy N. Waller Meetingsin | › leads the Board’s governance practices and procedures, including the search for and recruiting of new outside directors and consideration of nominees for the Board › oversees our governance standards, processes for evaluation of the Board and its committees, and compensation of non-employee directors › oversees our environmental sustainability strategy, goal setting, opportunities and |
periodically reviews reports on our corporate and PAC political contributions and charitable contributions made by Delta or The Delta Foundation
FINANCE COMMITTEEFinance Committee
Members | Primary Responsibilities |
George N. Mattson (Chair)
Leslie D. Hale Jeanne P. Jackson
Sergio A. L. Rial David S. Taylor Meetingsin | › reviews and makes recommendations about the financial structure of the company, financial planning, investments (including strategic investments in our overseas commercial airline partners), acquisitions and divestitures, operating plans, capital structure and hedging activities › reviews and approves or recommends to the Board commitments, capital expenditures and financing transactions |
2022 PROXY STATEMENT | 15 |
PERSONNELPersonnel & COMPENSATION COMMITTEECompensation Committee
Members | Primary Responsibilities |
Francis S. Blake Greg Creed Jeanne P. Jackson George N. Mattson
Meetingsin | › oversees our general compensation philosophy and practices and the annual review of our Chief Executive Officer and reviews and approves compensation programs for our executive officers › reviews management succession plans and the company leader and talent planning process › makes recommendations to the Board regarding election of officers |
› oversees policies and strategies relating to talent development and human capital management, including diversity, equity and inclusion and employee wellbeing | ThePersonnel&CompensationCommitteeReportcanbefoundonpage 37. |
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SAFETYSafety & SECURITY COMMITTEESecurity Committee
Members | Primary Responsibilities |
David G. DeWalt (Chair) Ashton B. Carter William H. Easter III Leslie D. Hale Christopher A. Hazleton Michael P. Huerta
Meetingsin | › oversees and consults with management on our customer, employee and aircraft operating safety, security and › reviews current and proposed safety and security-related programs, policies and compliance matters › reviews reports and matters › establishes and approves annual safety and security goals |
All members of the Audit, Corporate Governance, Finance and Personnel & Compensation Committees are non-employee directors who are independent, as defined in the New York Stock Exchange (NYSE) listing standards and Delta’s director independence standards. In addition, the members of the Audit Committee and the members of the Personnel & Compensation Committee satisfy the additional independence requirements set forth in rules under the Securities Exchange Act of 1934 (the 1934 Act).
| 2022 PROXY STATEMENT | 16 |
The Corporate Governance Committee recommends to the Board of Directors nominees for election to the Board. Delta believes each current nominee for the Board of Directors has the following attributes:
integrity, honesty and adherence to high ethical standards
extensive business acumen and sound judgment
a track record of service as a leader in business or governmental settings
commitment to diversity, equity and inclusion
The Committee seeks nominees who have the skills and experience to assist management in the operation of Delta’s business and to provide input on Delta’s strategy, among other matters. The Committee is also committed to continuing the enhancement of the diversity of the Board. In accordance with Delta’s Corporate Governance Principles, the Committee and the Board assess potential nominees (including incumbent directors). In its succession planning role, the Committee regularly considers potential candidates for the Board in light of the company’s new and evolving risks, strategies and operations as follows:
| 2022 PROXY STATEMENT | 17 |
For many years our Board of Directors and each of its committees have annually engaged in comprehensive self-evaluations. The Corporate Governance Committee oversees the evaluations and re-examines the process for the Board and Committee evaluations each year. For the 2018 evaluation, the Chief Legal Officer spoke individually with each Board member to discuss specific topics, such as issues of importance to the Board for 2019, strategic planning, succession planning and key attributes of new directors, and to obtain his or her assessment of Board and committee performance, functioning and operations during the year. These discussions also allowed time for engagement with each director on any other topic he or she desired to discuss. The comments of the directors were compiled on an anonymous basis and reviewed by the Board and the Board committees in executive sessions. The Chairman of the Board and the chairs of the committees address follow-up matters from the evaluations. These included continuing focus on strategy, cybersecurity, sustainability, risk management and investments, as well as operational matters, among other items.
The Board believes this annual evaluation process supports its effectiveness and continuous improvement.
Topics discussed during the Board performance evaluation one-on-ones with the Chief Legal Officer include:
issues of importance to the Board for 2019
risk management, strategic planning and succession planning
attributes of new directors
an assessment of Board and committee performance in 2018
The Board of Directors has ultimate responsibility to oversee Delta’s enterprise risk management program (ERM). HeadedCoordinated by the Senior Vice President-Finance and Controller,head of Delta’s Corporate Audit & Enterprise Risk Management department, the ERM program instills a heightened awareness of risk management throughout Delta, identifies and categorizes risks and monitors the progress of enterprise risk mitigation plans. The role of ERM is to provide a risk management framework with cross-functional alignment to enable risk informed decision-making through identification and categorization of risks and monitoring the progress of enterprise risk mitigation plans.
The Board discusses risk throughout the year, particularly when reviewing operating and strategic plans and when considering specific actions for approval. Depending on the natureThe Board’s oversight of risk management is managed through delegation to each of the risk, the responsibility for oversight of selected risks may be delegatedBoard’s committees with regular reporting to appropriate committees of the Board, with material findings reported to and discussed with the full Board. Delegations of risk oversight by the Board include:
The Audit Committee reviews the ERM framework at the enterprise level; reviews management’s process for identifying, managing and assessing risk; oversees the management of risks related to the integrity of the consolidated financial statements, internal control over financial reporting, the internal audit function, and legal and regulatory matters.
The Board delegated to the Audit Committee oversight of risks related to cybersecurity and the security and operations of the information technology systems. Members of the Audit Committee receive internal and external training on cybersecurity risks, and an experienced cybersecurity professional, David DeWalt, is a member of the Audit Committee and has been a Delta director since 2011.
The Executive Vice President-Chief Information Officer and the Vice President-Chief Information Security Officer and their staffs regularly report to the Audit Committee on cybersecurity and information technology risks and initiatives.
The Finance Committee oversees the management of risks related to aircraft fuel price and fuel hedging; foreign currency and interest rate hedging; Delta’s financial condition and capital structure; its financing, acquisition, divestiture and investment transactions and related matters.
2019 PROXY STATEMENT 21
| ir.delta.com | 2022 PROXY STATEMENT | 18 |
The Personnel & Compensation Committee reviews risks related to management succession and development, Delta’s executive compensation program, Company leadership and talent planning process and related matters.
The Corporate Governance Committee reviews risks related to Board of Directors’ succession plans, Delta’s corporate governance, ESG sustainability and related matters.
The Safety & Security Committee oversees the management of risks related to customer, employee, aircraft and airport operating safety and security and related matters.
Delta’s ERM process continuesis a journey of continuous improvement and iteration to evolve.meet the evolving needs of our business. Leaders of the business divisions, working closely with division finance teams,the ERM leader, have responsibility for risk identification, development of business risk mitigation plans, and monitoring and reporting progress of their implementation. The corporate safetyDelta’s leadership structure, combined with the roles of the Board, its committees, and security department oversees the Risk Council, provide appropriate leadership for effective risk management process for risks related to customer, employee, aircraft and airport safety and security matters. Aoversight.
The senior management level, cross-divisional council, the Delta Risk Privacy and Compliance Council (DRPCC), meets quarterly and includes the Chief Legal Officer, Chief Compliance Officer, Chief Financial Officer, Chief Information Officer, Senior Vice President - Corporate Safety and Security, Chief LegalHealth Officer, Controller, Chief Information Security Officer, Chief ComplianceSustainability Officer and Vice President-Corporatethe head of the Corporate Audit & Enterprise Risk Management department, among others. The DRPCC is responsible for overseeing allAs appropriate, various officers and employees attend meetings of the companyRisk Council and follow up on issues addressed within the Risk Council.
The Risk Council oversees all areas of the company’s business and safety and security risks,risk, including the following: monitoring risk tolerance levels; defining organizational responsibilities for risk management; identifying significant risks to Delta; and risk mitigation and management strategies based on Delta’s risk tolerance levels as well as monitoring the business to determine that risk mitigation activities are in place and operating. As appropriate, various officers and employees attend meetings of the DRPCC and follow up on issues addressed by the DRPCC.
The Board of Directors believes that Delta’s leadership structure, combined with the roles of the Board, its committees, and the DRPCC, provide the appropriate leadership for effective risk oversight.
| 2022 PROXY STATEMENT | 19 |
Shareholders and other interested parties may communicate with our non-management directors by sending an e-mail to nonmgmt.directors@delta.com. We have established a link to this address on our Investor Relations website. Communications with directors may also be mailed to Delta’s Corporate Secretary at at:
Law Department
Delta Air Lines, Inc.,
Department 981 P.O. Box 20574,
1030 Delta Boulevard
Atlanta, Georgia, 30320. 30354
Attn: Corporate Secretary
Communications will be sent directly to the Chairman of the Board, as representative of the non-management directors, other than communications pertaining to customer service, human resources, accounting, auditing, internal control and financial reporting matters. Communications regarding customer service and human resources matters will be forwarded for handling by the appropriate Delta department. Communications regarding accounting, auditing, internal control and financial reporting matters will be brought to the attention of the Audit Committee Chair.chair.
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Beneficial Ownership of Securities
The following table sets forth the number of shares of Delta common stock beneficially owned as of April 15, 2019,22, 2022, by each director and director nominee, each person named in the Summary Compensation Table in this proxy statement, and all directors and current executive officers as a group. Unless otherwise indicated by footnote, the owner exercises sole voting and investment power over the shares.shares listed.
Name of Beneficial Owner | Amount and Nature of Beneficial Ownership | (1) |
Directors: |
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Edward H. Bastian |
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Francis S. Blake |
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Ashton B. Carter |
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Greg Creed | 11,000 |
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David G. DeWalt |
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William H. Easter III |
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Leslie D. Hale | - |
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Christopher A. | 300 |
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Michael P. Huerta |
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Jeanne P. Jackson |
| (4) |
George N. Mattson |
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Kathy N. Waller |
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NamedExecutiveOfficers: |
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Glen W. Hauenstein |
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Peter W. Carter |
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William C. Carroll | 79,720 | (2) |
Garrett L. Chase | 77,750 | (2) |
Directors and Current Executive Officers as a Group (25 Persons) | 5,389,042 | (2) |
(1) Each of the individuals listed in the table and the directors and current executive officers as a group beneficially owned less than 1% of the shares of common stock outstanding on April (2) Includes the following number of shares of common stock which a director or a named executive officer has the right to acquire upon the exercise of stock options that were exercisable as of April | ||
Name | Number of Shares |
Edward H. Bastian |
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Glen W. Hauenstein |
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Peter W. Carter |
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Daniel C. Janki | 24,577 |
William C. Carroll | 47,411 |
Garrett L. Chase | 44,641 |
Directors & Current Executive Officers as a Group |
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(3) Includes 48,170 shares held by the Easter Management Trust, over which Mr. Easter has shared investment and voting power. (4) Includes 22,000 shares held by a trust for the benefit of Ms. Jackson and her husband and 3,510 shares held by trusts for the benefit of Ms. Jackson’s children. Ms. Jackson has shared investment and voting power over all shares held in these trusts. (5) Includes 2,000 shares held by Mr. Mattson’s wife, 6,000 shares held through trusts for the benefit of Mr. Mattson’s children and for which Mr. Mattson’s wife serves as trustee; also includes 2,000 shares held by a trust for the benefit of Mr.
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2019 PROXY STATEMENT 23
The following table provides information about the following entities known to Delta to be the beneficial owner of more than five percent of Delta’s outstanding common stock as of April 15, 2019.22, 2022.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Class |
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100 Vanguard Blvd | 66,966,728(1) | 10.4% |
BlackRock,Inc. |
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(1) Based on
Based on an amendment to Schedule 13G filed on February | ||
Section 16 Beneficial Ownership Reporting Compliance
Section 16(a) of the 1934 Act requires our directors, executive officers and persons who beneficially own more than 10% of a registered class of our equity securities (reporting persons) to file certain reports concerning their beneficial ownership of our equity securities. We believe that all reporting persons timely complied with their Section 16(a) filing obligations during 2018.
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This section of the proxy statement describes the compensation of our named executive officers for 2018.2021. It also discusses how our executive compensation program reflects our compensation philosophy and objectives, including the importance of linking pay to performance.
20182021 Named Executive Officers
| Name | Position |
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| EDWARD H. BASTIAN | Chief Executive Officer |
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| GLEN W. HAUENSTEIN | President |
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| Executive Vice President & |
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| PETER W. CARTER | Executive Vice President & Chief Legal Officer and Corporate Secretary |
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Delta delivered another year of strong financial, operational and customer service performance in 2018 by leveraging our five key competitive advantages. As we look to 2019 and beyond, we will continue to leverage these strengths to drive long-term value for our shareholders through top-line growth, margin expansion and prudent deployment of our capital.
DELTA'S COMPETITIVE ADVANTAGES
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| Executive Vice President & Chief Financial Officer |
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2019 PROXY STATEMENT 25
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Back to ContentsEffective July 19, 2021, Daniel C. Janki became Delta’s Chief Financial Officer. William C. Carroll and Garrett L. Chase concluded their service as Interim Co-Chief Financial Officers as of that date.
OUR EMPLOYEE COMMITMENTExecutive Summary
We believe Delta'sstarted 2021 coming off one of the most difficult years in Delta’s history — a year in which we learned how to operate an airline through the ever-changing circumstances of a global pandemic. We understood that, like 2020, 2021 would not be predictable. We expected to see two distinct phases over the year. The first looking like 2020 with travel demand deeply depressed, and the second, when we reached a turning point with widely available vaccinations spurring the reemergence of travel.
Because of this uncertainty, we did not implement our traditional “Flight Plan,” which sets forth Delta’s short-term and long-term business goals, for 2021. Instead, we relied on the following guiding principles to drive our decisions over the year:
Keeping our people, our customers and our communities safe through our health and safety protocols
Harnessing the innovation and agility we developed in 2020 to create and execute our plan for recovery
Listening to our customers and acting on their feedback to provide us the blueprint for Delta’s future
Living our values and continuing to address inequity, economic disparity and climate change
These principles successfully drove the airline in 2021. Our operational excellence and best-in-class service were recognized by travelers as J.D. Power’s No. 1 airline in customer satisfaction among airlines in North America. And, we ended the year being the only major U.S. airline to deliver profitability for the second half, allowing us to make a payment to our employees under the company’s broad-based profit-sharing program (Profit Sharing Program).
The progress Delta made in its recovery from the impact of the pandemic in 2021 is described in detail in the “Letter from the CEO,” “Letter from the Non-Executive Chairman of the Board” and the “Proxy Statement Summary” sections of this proxy statement.
Through mask mandates, new variants and pandemic fatigue, COVID-19 continued to be challenging to the airline industry in 2021. Our employees once again proved that Delta’s most important competitive advantage is its people. As a result of their resilience and dedication, we were ready to welcome back our approximately 89,000 employees who are the facecustomers as they steadily resumed air travel. During 2021, we returned all of our brand. Our strong financial, operationalpeople to full schedules and customer service results in 2018 would not have been possible without the dedication and determination ofbegan rebuilding our people. During 2018, we continuedworkforce by welcoming approximately 11,000 new employees to Delta, while continuing our commitment to promotingpromote a culture of open, honest and direct communications making Delta a great place to work, and building an environment that encouragesencompasses diversity, integrityequity and respect.inclusion.
In addition to these significant investments, we strive to make Delta a great place to work by listening to our employees so we can provide programs and resources that fully engage them, help them deepen their skill sets and further their careers at Delta. We are committed to creating a diverse and inclusive workforce, empowering professional growth and development and investing in our employees’ health, emotional and financial wellness. We are also committed to internal pay parity based on role, qualifications, experience and merit.
These efforts have been recognized internally and, as shown on the next page, externally. In a 2018 employee survey in which more than 47,000 Delta people participated (over 50% of Delta's employees), 85% said their workplace was “a great place to work” and 86% felt a sense of pride when looking at what the company has accomplished.
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Supporting our People in 2021 We have asked a lot of our people over the last two years and they have risen to the occasion by consistently delivering the Delta Difference to our customers, communities and each other. Delta supported its employees during this crucial time in various ways, including: | ||
 | Prioritizing Health and Wellbeing Our number one priority through the pandemic has been the health and safety of our people. In February 2021, we welcomed Dr. Henry Ting to Delta as our Chief Health Officer—a first for a U.S. airline. In addition to our COVID-19 response and measures to protect employees, such as providing vaccines on-site at our largest employee centers, Dr. Ting and his team are conducting a top-down review of our health and wellness offerings to ensure we are supporting and elevating all aspects of employee wellbeing—physical, emotional, social and financial. | |
 | Paying Profit-Sharing Program We paid over $100 million in February 2022 under the Profit Sharing Program in recognition of the achievements of our employees that made Delta profitable for the second half of 2021. | |
 | Maintaining the Shared Rewards Program We awarded $55 million under Delta’s broad based shared rewards program (Shared Rewards Program) based on the hard work of our employees meeting key operational performance goals during 2021 (on-time arrival, baggage handling, flight completion factors and net promoter score) recognizing that superior performance by our front line employees directly affects customer satisfaction. | |
 | Continuing our Commitment to Financial Wellness We recognized that the last two years have been challenging for our people not only physically and mentally, but also financially. In addition to helping our employees save for retirement by making over $890 million in company contributions to our 401(k) plans in 2021, Delta is making one-on-one financial coaching available to our domestic employees. In addition, Delta contributed $1.5 billion to our frozen defined benefit plans. | |
TALENT PLANNING AND DEVELOPMENTDiversity, Equity and Inclusion
Our commitment to diversity, equity and inclusion is in pursuit of our goal to connect and reflect the world — bringing people together and representing the communities that Delta serves. We have committed to building a better future, fueled in large part by our focus on diversity, equity and inclusion. This goes beyond doing the right thing. It is imperative to our success.
In the midst of a global reckoning over racial inequity and injustice, we strengthened our commitment in 2020 to be an anti-racist and anti-discrimination organization that fosters our employees’ sense of belonging at Delta. In 2021, we accelerated our actions to close diversity gaps by increasing the representation of women and under-represented groups in senior leadership positions and doubling the number of Black officers and director-level employees by 2025 as compared to 2020. This progress, which falls under the oversight of the Personnel & Compensation Committee, is reported out regularly to the Board of Directors and made public twice a year.
See “Our Commitment to Our People” starting on page 9 for more information about Delta’s diversity, equity and inclusion efforts.
Talent Planning and Development
Talent planning and development are important at all levels within Delta—Delta — from the executive ranksour executives to our frontline employees. 2021 was a year like none other as we welcomed approximately 11,000 new employees to the organization and transitioned 40% of our leaders into new roles. This amount of transition was positive for our people, opening opportunities to progress their careers within the organization. To support this transition, we leaned on sound talent planning processes, a new and improved learning and development platform and additional leader training.
The Personnel & Compensation Committee continuedalso continues to make this effort a high priority in 2018.place significant focus on executive talent planning. The Board of Directors is regularly updated on key talent indicators for our senior leaders, including diversity, recruiting, development and developmentsuccession planning programs. In addition, Board members interact withThey are also exposed to potential future executive leaders through formal presentationsboard meetings and informal events.
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Executive Compensation in 2021
In 2020, the Personnel & Compensation Committee determined not to make changes to any outstanding short-term or long-term incentive awards, despite the pandemic negatively impacting award values significantly — ensuring our executives remained fully aligned with shareholders. It made that decision knowing it would have to develop a program for 2021 that rewards our executives’ leadership in the industry, continued focus on our recovery and commitment to Delta. The Personnel & Compensation Committee met extensively with its compensation consultant and company management to consider how best to achieve these objectives within a set of guiding principles that adhere to our pay for performance compensation philosophy and comply with the compensation limitations of the CARES Act.
In setting the executive compensation program for 2021, the Personnel & Compensation Committee decided to maintain the program’s current elements, including retaining the general structure of our annual and long-term incentive plans. However, due to the continued uncertainty of the pandemic’s ongoing impact on our business and the complexity of determining performance goals in such an environment, the Committee made adjustments to better link compensation with performance through the expected stages of recovery, while ensuring the majority of compensation remained at risk. As indicated below, some of these changes were temporary for 2021 in consideration of the unique impact of the pandemic.
In addition to other actions taken by the Committee as described in this Compensation Discussion and Analysis, the following actions were taken with respect to our annual and long-term incentive plans for 2021:
Bifurcated Performance Periods. Due to the continued uncertainty of the pandemic’s ongoing impact to our business and the complexity of determining performance goals in such an environment, the Personnel & Compensation Committee established two separate performance periods under both the annual and long-term incentive plans.
For the annual plan, the performance period was divided in two six-month periods (rather than a single 12-month performance period).
For the performance award component of the long-term incentive program, the typical three-year performance period was divided into separate one-year (2021) and two-year periods (2022-2023).
The Personnel & Compensation Committee reinstated the full twelve-month and three-year performance periods for our 2022 incentive plans.
Reduced Number of Performance Measures. To concentrate our named executive officers’ focus on the elements most beneficial to our recovery efforts, the Personnel & Compensation Committee simplified the annual and long-term incentive plans by reducing the number of performance measures under each plan.
Under the annual plan, the number of performance measures was reduced from three to two.
Under the long-term incentive program, the number of performance measures applicable to the performance award component was reduced from five (including a modifier) to three and the performance hurdle that triggered time-based vesting of the stock option award component was removed.
Revised Certain Payout Provisions.
The maximum payout available under the annual plan was reduced to 150% (from 200%).
The three-year vesting schedule for restricted stock awards under the long-term incentive program was front-loaded, so that 50% of the award vests after the first year and the remaining 50% will vest equally over the next following two years. We returned to our traditional vesting schedule (three equal installments) for restricted stock granted under our 2022 long-term incentive program.
Any payouts to executive officers with respect to the performance award component of the long-term incentive program will be made in cash (rather than being converted to shares of Delta stock on the payment date).
Implemented Target Ranges for Certain Performance Measures. Again, given the uncertainty of our recovery efforts and the resulting difficulty in setting a single number for each relevant performance target, the Personnel & Compensation Committee decided to set a target range determined based on our business plan and expectations for the year.
In April 2020, Delta entered into an agreement with the U.S. Department of the Treasury to receive emergency support through the payroll support program under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which totaled $5.6 billion. In January and April 2021, Delta and the Treasury Department entered into additional payroll support program agreements under the Consolidated Appropriation Act, 2021 and the American Rescue Plan Act of 2021 (with the initial agreement, referred to as the PSP Agreements). Collectively, these additional agreements provided approximately $6.4 billion in payroll support payments. All of the payroll support funds were required to be used exclusively for the payment of employee wages, salaries and benefits and were conditioned on Delta agreeing, among other things, to refrain from conducting involuntary employee layoffs or furloughs from the date of the agreement through September 30, 2021, or the date on which Delta has expended all of the payroll support funds. In addition, Delta became subject to other restrictions, including certain limitations on executive compensation (CARES Act compensation limitations).
Under the CARES Act compensation limitations, the total compensation (as defined in the PSP Agreements) of our management employees whose total compensation exceeded $425,000 in 2019 is limited during any 12 consecutive month
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period beginning March 24, 2020 through April 1, 2023 to the total compensation the employee received in 2019. Additionally, for those individuals whose total compensation exceeded $3 million in 2019, the total compensation is limited to (1) $3 million plus (2) 50% of the excess over $3 million.
Delta has designed compliance processes for the CARES Act compensation limitations, including, in certain cases, making adjustments to the composition of an individual’s long–term incentive awards, and has provided periodic comprehensive reports to the Treasury Department, as required by the PSP Agreements.
Administration of the Executive Compensation Program
PERSONNEL & COMPENSATION COMMITTEE |
The Personnel & Compensation Committee oversees and approves Delta’s executive compensation program to reinforce our culture by ensuring a strong connection between pay and performance as well as alignment between our executives, employees and shareholders. This includes: |
| › Establishing Delta’s executive compensation philosophy and objectives in consultation with an independent compensation consultant and company management › Overseeing the development and implementation of our executive compensation › Reviewing and approving the compensation structure and performance measures for our Chief Executive Officer and other executive officers › Evaluating the performance of the Chief Executive Officer in meeting corporate goals and objectives › Reviewing and advising the Board of Directors on management succession planning › Overseeing Delta’s policies and › Making recommendations to the Board of Directors on the › Reviewing tally sheets, competitive market data for our peer group and individual |
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INDEPENDENT COMPENSATION CONSULTANT |
In |
| › Providing advice regarding › Providing annual recommendations directly to the Personnel & Compensation Committee on Chief Executive Officer › Advising the Corporate Governance Committee on the compensation for the non-executive Chairman of the Board and non-employee directors › Providing advice on the Company’s compensation peer group › Updating and advising the Personnel & Compensation Committee on key executive compensation trends in the industry and general market › Attending, at the request of the Personnel & Compensation Committee, executive session discussions without the presence of company management › Periodically working directly with company management on behalf of and under the control and supervision of the Personnel & Compensation Committee |
The Personnel & Compensation Committee considered | |
DELTA MANAGEMENT |
Delta’s management team provides input to the Personnel & Compensation Committee on |
| › Developing Flight Plan goals and providing input on business strategy and performance › Providing updates to the Personnel & Compensation Committee on key executive compensation trends in the industry and general market › Evaluating the financial and legal implications of executive compensation proposals and confirming proposed payouts to executive officers under our incentive compensation plans are calculated correctly and comply with plan terms › The Chief Executive Officer making recommendations for the compensation of executive officers other than himself |
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Executive Compensation Philosophy and Objectives
Our executive compensation philosophy is to achieve Delta’s short-term and long-term business goals which we refer to as our Flight Plan, by closely linking pay to performance and by aligning the interests of all Delta people with the interests of our customers and shareholders. Based on this philosophy, the Personnel & Compensation Committee develops the executive compensation program to promote a pay for performance culture that:
Pay for performance is the foundation of our compensation philosophy for all employees, driving a strong sense of team work and continual improvement of business results. Our executive compensation program places a substantial portion of total 2018 compensation at risk. In fact,2021, 94% of total target compensation for the Chief Executive Officer and 89%90% of total target compensation for the other named executive officers was contingent on Delta achieving ambitious financial, operational and customer service goals or varied withsubject to stock price performance. Furthermore, the majority of their total compensation is paid in Delta stock,equity-based, which, together with our stock ownership and retention guidelines, aligns the interests of management to the interest of shareholders.
2019 PROXY STATEMENT 29
The Personnel & Compensation Committee sets stretch performance goals under our annual and long-term incentive plans to drive Delta’s business strategy and to deliver value to our shareholders. Based on our strong performance in a challenging fuel cost environment in 2018 we paid 126.51% of target under our annual incentive plan and 185.87% of target under the 2016 long-term incentive program.
Our incentive plans closely align the interests of management with those of frontline employees in two respects. First, many of the same financial, operational and customer service performance measures are used in both our executive and broad-based employee compensation programs. Second, we have long structured both our annual and long-term incentive plansplan to ensure that executives do not receive their fullabove-target incentive payouts unless our people also receive payment under the Profit Sharing Program for the year.
At our 20182021 annual meeting, we asked shareholders for a non-binding “say on pay” advisory vote to approve the 20172020 compensation of the named executive officers. Similar to previous years, theThe holders of over 97%93% of the shares present and entitled to vote at the 20182021 annual meeting voted for approval of the compensation of the named executive officers. The Personnel & Compensation Committee took these results into account by continuing to emphasize our pay for performance philosophy utilizing challenging performance measures that provide incentives to deliver value to our shareholders.
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Corporate Governance and Compensation Practices
Our executive compensation program reflects corporate governance policies and compensation practices that are transparent and consistent with best practices. The following chart highlights the policies and practices we consider instrumental in driving company performance while mitigating risk, as well as the practices we avoid:
What We Do: | Aaa | What We Don’t Do: |
|  Subject | |
| Apply stock ownership and retention guidelines to executive officers and directors | |
| Follow objective, standardized criteria for the timing of equity award grants | |
| Include “double trigger” change in control provisions in our incentive awards | |
| Prohibit hedging and pledging of company stock by our employees | |
| Require a one-year minimum vesting period for performance-based awards under our equity compensation plan | |
| Fully disclose our incentive plan performance measures | |
| Engage with institutional investors regarding our executive compensation program | |
No employment contracts
| |
| No excise tax reimbursement for payments made in connection with a change in control |
| No repricing, cash buyouts or share recycling of stock options and stock appreciation rights under our equity compensation plan |
| No hedging or pledging of company stock No loss on sale for residence relocation protection for named executive officers |
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| No supplemental executive retirement or deferred compensation plans |
| No company-provided: › personal club memberships › executive life insurance › home security › financial planning |
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Comparative Market Data and Peer Group
We believe peer group data should be used as a point of reference, not as the sole factor in our executive officers’ compensation. In general, the Personnel & Compensation Committee’s objective is for target total direct compensation opportunities to be competitive with the peer group, with individual variation based on the individual’s performance, experience and role within Delta.
Our peer group is composed of three major U.S. airlines and eighteen other companies in the hotel/leisure, transportation/ distribution, machinery/aerospace/defense and retail industries. We selected these industries because we believe it is important that our peer group have business characteristics that are similar to Delta's,Delta’s, including revenue size, market capitalization, number of employees, operating margin and global presence. In order to retain and attract the talent we need, Delta must compete with these types of companies, and if the peer group beenwas limited to the airline industry, we would have to include companies that are a fraction of the size and scope of Delta. The Personnel & Compensation Committee, in consultation with the compensation consultant and company management, reviews and considers changes to the composition of our peer group annually. There were no changes to the peer group in 2018.2021. The companies in our peer group are:
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Airlines: | American Airlines Group Inc. | Southwest Airlines Co. | United |
Hotel/Leisure: | Carnival Corporation & plc | Marriott International, Inc. |
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Transportation/ Distribution: | The Coca-Cola Company FedEx Corporation Norfolk Southern Corporation | PepsiCo, Inc. Sysco Corporation | Union Pacific Corporation United Parcel Service, Inc. |
Machinery/ Aerospace/Defense: | The Boeing Company Honeywell International Inc. |
Textron Inc. |
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Retail: | Best Buy Co., Inc. The Home Depot, Inc. | Lowe’s | Target Corporation |
Peer Group | Revenue ($)(1) | Market Capitalization ($)(2) | International Operations as Percentage of Revenue (%)(3) |
75th Percentile | 68,617 | 97,807 | 42 |
Median | 43,441 | 40,727 | 33 |
25th Percentile | 21,965 | 26,136 | 16 |
DELTA AIR LINES | 44,438 | 34,083 | 30 |
Source: Standard & Poors Capital IQ | |||
(1) Last 12 months from most recent quarter ended on or before December 31, 2018. In millions. (2) As of December 31, 2018. In millions. (3) As of the most recent fiscal year-end.
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The following changes, which are discussed further below, were made to our executive compensation program in 2018:
The Personnel & Compensation Committee approved increases to the base salaries for each of the named executive officers as part of our annual executive compensation review. Even with these increases, the base salaries for our executive officers remain positioned well below the market median.
The Personnel & Compensation Committee approved an increase in the target award opportunities under the long-term incentive plan for:
Mr. Bastian to reward his leadership and bring him closer to the median of our peer group; and
Mr. West to recognize the scope of his position and his leadership in the achievement of our outstanding operational reliability. In addition, the Personnel & Compensation Committee increased his exposure to performance stock options to align with Mr. Hauenstein's award allocation.
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Peer Group | Revenue ($)(1) | Market Capitalization ($)(2) | International Operations as Percentage of Revenue (%)(3) |
75th Percentile | 79,474 | 161,960 | 40 |
Median | 38,655 | 72,446 | 24 |
25th Percentile | 17,814 | 25,358 | 8 |
DELTA AIR LINES | 29,899 | 24,925 | 19 |
Source: Standard & Poor’s Capital IQ | |||
(1) Last 12 months from most recent quarter ended on or before December 31, 2021. In millions. (2) As of December 31, 2021. In millions. (3) As of the most recent fiscal year-end | |||
Compensation elements for our executive officers include:
Type | Component | Objective |
FixedCompensation | Base Salary | › Provides a fixed amount of compensation for performing day-to-day functions based on level of responsibility, experience and individual performance |
Performance-BasedCompensation | Annual Incentive Plan | › Rewards short-term financial and operational performance on |
| Long-Term Incentive Program | › Motivates management employees by linking incentives to our multi-year financial and customer service-related goals and rewarding long-term value creation measured by our stock price and › Aligns with interests of shareholders, facilitates executive officer stock ownership and encourages retention of our management employees |
Benefits | Health, Welfare and Retirement Benefit Plans | › Helps attract and retain highly qualified executives through a variety of employee benefits that demonstrates Delta’s overall commitment to the health and financial wellness of our employees |
Delta does not have a specific compensation target for each element of compensation. As shown in the compensation mix charts on page 30,27, at-risk compensation is the largest portion of the total compensation opportunity for the Chief Executive Officer and the other named executive officers. The Personnel & Compensation Committee believes this is the appropriate approach for aligning the interests of the named executive officers and shareholders.
The Personnel & Compensation Committee considers a number of factors, including competitive market data, internal equity, role and responsibilities, business and industry conditions, management succession planning and individual experience and performance in determining executive compensation. When making specific compensation decisions, the Personnel & Compensation Committee also reviews compensation “tally sheets” prepared by the compensation consultant. The tally sheets detail the total compensation and benefits for each executive officer, including the compensation and benefits the officer would receive under hypothetical termination of employment scenarios.
PERFORMANCE MEASURE SELECTIONPerformance Measure Selection
Consistent with our executive compensation philosophy, the Personnel & Compensation Committee selects performance measures to support our Flight Plan and to closely align the interests of the named executive officers with the interests of our key stakeholders. Recognizing that the performance measures used under our annual and long-term incentive plans may need to change over time to reflect evolving priorities, the Personnel & Compensation Committee, together with company management and the compensation consultant, evaluates the performance measures used in our incentive plans each year to ensure they remain consistent with Delta’s long-term strategic plan and our annual Flight Plan goals.
WithWithout our culture astraditional Flight Plan for 2021, the foundation, our goals to runPersonnel & Compensation Committee approached its performance measure evaluation with a customer-focused airline, build a global airline franchisefocus on recovery and generate leading shareholder returns arefurther strengthening Delta’s competitive advantages, with the pillars of the 2018 Flight Plan. The mix ofobjective of:
Utilizing absolute and relative performance measures includedto ensure Delta’s industry leadership operationally and financially
Building on the customer service and safety initiatives instituted during the pandemic to drive relative premium revenue
Encouraging sustainable revenue generation that enables disciplined investment and balance sheet restoration
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The Personnel & Compensation Committee believed that whether the motivation is to rebuild the airline to pre-pandemic levels or exceed record profit levels, the performance measures established in prior years continue to be the best indicators of Delta’s success and align the interests of the named executive officers with our 2018employees, customers and shareholders. Accordingly, the Personnel & Compensation Committee decided not to introduce any new performance measures under our annual and long-term incentive plans are distinctfor 2021. Rather, it reduced the total number of performance measures under both plans and demonstrate howretained those that (1) met the Committee’s objectives, (2) directed the named executive officers’ focus on driving financial recovery and maintaining operational excellence and (3) were less affected by volatile external factors.
In determining the appropriate performance measures for the 2021 incentive plans, the Personnel & Compensation Committee incorporatesexcluded those that would better measure the elementscompany’s performance once the airline returned to profitability and generated sustained operating cash flows. This resulted in the removal of our Flight Plan to drive performance.
We made changes to ourpre-tax income margin (measured against an airline peer group) under the annual incentive plan and return on invested capital under the long-term incentive performance measures in 2017 to support a focus on positive revenue growth and global alliances. This included shifting Total Revenue per Available Seat Mile (TRASM) from an annual to a long-term measure, expandingprogram. In addition, the scope of the international net promoter score measure to track distinct regions, as well as introducing the relative total shareholder return measuremodifier (relative to all other S&P 500 companies) in the long-term incentive plan. Givenprogram was removed to address the positive momentumdisproportionate impact the pandemic has had on various industries included in these areas last year and their continued focus for future years, the S&P 500. The Personnel & Compensation Committee determined not to make any further changes tobelieved that superior performance in the retained performance measures for 2018.should ultimately produce sustainable long-term shareholder returns.
In setting the annual and long-term performance goals for each performance measure, the Personnel & Compensation Committee reviewshas traditionally reviewed our business plans and considersconsidered other factors, including our past variance to targeted performance, our historical performance, economic and industry conditions and the performance of other airlines. In certain cases, this analysis may causeDue to the continued economic uncertainty and lack of forward visibility on the duration and impact of the pandemic on our business, the Personnel & Compensation Committee established two separate performance periods (utilizing the same performance measures) for both the annual and long-term incentive plans. Further, for the same reasons, the Committee implemented target ranges for the majority of the performance measures. This allowed the Personnel & Compensation Committee to set lower targets than in previous years. Webetter set challenging, but achievable goals including those(including some that are realizable only as a result of exceptional performance, for the company andperformance) that focus the named executive officers to driveon the achievement of ourcompany’s short- and long-term objectives.
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| Performance Measure | Description |
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| ›
› Also serves as the measure used under the Profit Sharing Program, thereby aligning the interests of Delta management with our people |
| Operational Performance — Delta and Delta Connection | › Based on the broad-based Shared Rewards › Satisfaction of these measures |
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| Performance Measure | Description |
| Total Revenue per Available Seat Mile (TRASM) | › A unit revenue measure › Encourages focus on |
| Customer Service Performance | › Based on Delta’s › Due to the level of global travel restrictions that continue to impact international travel, this measure was limited to Delta’s domestic net promoter scores |
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The Personnel & Compensation Committee reviews the base salaries of our executive officers annually. There is no set schedule for base salary increases. As shown in the following chart, the Personnel & Compensation Committee approved base salary increases for each of the named executive officers effective February 1, 2018. These changes were based on individual performance, internal parity considerationsChief Executive Officer and a competitive market review. Even with these increases, the base salaries of our other named executive officers remain below the median of the peer group for their respective positions.
Named Executive Officer | 2017 Base Salary | 2018 Base Salary |
Mr. Bastian | $800,000 | $900,000 |
Mr. Hauenstein | $625,000 | $700,000 |
Mr. West | $625,000 | $700,000 |
Mr. Jacobson | $525,000 | $550,000 |
Mr. Carter | $500,000 | $550,000 |
In 2020, our named executive officers each agreed to temporarily reduce their base salaries for nine months beginning April 1 (100% reduction for Mr. Bastian and 50% for Mr. Hauenstein and Mr. Carter). Effective January 1, 2021, their base salaries were reinstated to 2020 levels with none of our named executive officers receiving a salary increase in 2021.
2019 PROXY STATEMENT 33
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ANNUAL INCENTIVEAnnual Incentive
The 20182021 Management Incentive Plan (2018(2021 MIP) links pay and performance by providing management employees with a compensation opportunity based on Delta’s achievement of certain Flight Planshort-term business goals in 2018.2021. The 20182021 MIP also aligns the interests of Delta management and employees by using metrics that are consistent with the goals that drive payouts under Delta’s Profit Sharing and Shared Rewards Programs.
Typically, payments under the 20182021 MIP are provided in cash, however,cash. However, to provide further alignment between our executive officers and our people, the executive officers’ 20182021 MIP awards are subject to the following conditions if there is no Profit Sharing Program payout to employees for the year:
The actual MIP award, if any, will be capped at the target award opportunity, even if Delta’s performance for operational and relative financial goals exceeds the target level.
Any awards earned by executive officers will be made in restricted stock that will not vest until there is a payment under the Profit Sharing Program or under certain termination of employment scenarios.
The 2021 MIP was divided into two separate six-month performance periods, with each period accounting for 50% of the total 2021 MIP award opportunity. The following chart shows the performance measures for the named executive officers under the 20182021 MIP and the actual performance for each measure in 2018.for 2021.
This column reflects the percentage of the target award earnedachieved after application of the performance measure weightings.weightings applicable to the named executive officers.
“Pre-tax income” as defined in Delta’s broad-based Profit Sharing Program, means Delta’s annual consolidated pre-tax income calculated in accordance with GAAP and as reported in Delta’s SEC filings, but excluding (a) asset write downs related to long-term assets; (b) gains or losses with respect to special, unusual, or nonrecurring items; and (c) expense accrued with respect to any employee profit sharing plan, program or similar arrangement.
For purposes of the 2018 MIP, the Industry Group consists of Alaska Airlines, American Airlines, JetBlue Airways, Southwest Airlines and United Airlines.
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The target award opportunities under the 20182021 MIP which have not changed since 2016, are expressed as a percentage of each participant’s base salary earned during the year, other than Mr. Janki, whose 2021 MIP award was based on his annualized base salary. The Personnel & Compensation Committee determined the target award opportunities taking into consideration the peer group comparison, the Chief Executive Officer’s recommendations for executive officers other than himself and input from the compensation consultant. The 2020 target award opportunities were maintained for Mr. Bastian, Mr. Hauenstein and Mr. Carter in 2021. The target cash compensation opportunities (base salary and MIP) for our named executive officers remain generally beloware in alignment with the peer group median.
Summarized in the table below are the 20182021 MIP awards earned by each named executive officer. Because there was a payout under the Profit Sharing Program for 2018,2021, payments under the 20182021 MIP were made in cash.
Named Executive Officer | Base Salary* | Target Award (as % of base salary) |
Target Award | Percentage of Target Award Earned |
| Total 2021 MIP Award | |||
Mr. Bastian | $ | 950,000 | 200% | $ | 1,900,000 | 93.75% |
| $ | 1,781,250 |
Mr. Hauenstein | $ | 700,000 | 175% | $ | 1,225,000 | 93.75% |
| $ | 1,148,438 |
Mr. Bellemare | $ | 609,375 | 150% | $ | 914,063 | 93.75% |
| $ | 856,934 |
Mr. Carter | $ | 550,000 | 150% | $ | 825,000 | 93.75% |
| $ | 773,438 |
Mr. Janki | $ | 650,000 | 175% | $ | 1,137,500 | 93.75% |
| $ | 1,066,406 |
Named Executive Officer | Base Salary | Target Award (as % of base salary) | Target Award (in dollars) | Percentage of Target Award Earned |
| Total 2018 MIP Award | |||
Mr. Bastian | $ | 900,000 | 200% | $ | 1,800,000 | 126.51% |
| $ | 2,277,090 |
Mr. Hauenstein | $ | 700,000 | 175% | $ | 1,225,000 | 126.51% |
| $ | 1,549,686 |
Mr. West | $ | 700,000 | 175% | $ | 1,225,000 | 126.51% |
| $ | 1,549,686 |
Mr. Jacobson | $ | 550,000 | 150% | $ | 825,000 | 126.51% |
| $ | 1,043,666 |
Mr. Carter | $ | 550,000 | 125% | $ | 687,500 | 126.51% |
| $ | 869,722 |
Reflects base salary earned during 2021, except for Mr. Janki, whose 2021 MIP award was based on his annualized base salary
LONG-TERM INCENTIVESLong-Term Incentives
20182021 Long-Term Incentive Program
The 20182021 Long-Term Incentive Program (2018(2021 LTIP) links pay and performance by providing management employees with a compensation opportunity that aligns the interestinterests of management and shareholders, with a large portion contingent upon Delta’s financial, customer service and stock price performance over a three-year period. The performance measures and goals are the same for the Chief Executive Officer, the other named executive officers and all other participants in this program.
The 20182021 LTIP target awards are the largest component of each executive officer’s compensation opportunity. The Personnel & Compensation Committee determined the target award opportunities so each participant’s total direct compensation opportunity is competitive with the peer group. The 2020 target award levels for the named executive officers were maintained, except for Mr. Carter. Mr. Carter’s target award opportunity under the 2021 LTIP was increased to recognize his significant contributions in implementing the company’s strategic initiatives.
TheUnder the 2021 LTIP, Mr. Bastian and Mr. Hauenstein received an award opportunity consisting of 34% performance awards, 33% restricted stock and 33% stock options, Mr. Carter received 25% performance awards, 58% restricted stock and 17% stock options, and the remaining named executive officers received 38% performance awards, 37% restricted stock and 25% stock options. These award allocations shown below were selected to balance the incentive opportunity between Delta’s financial performance relative to other airlines, internal company performance and stock price performance. In 2018, the Personnel & Compensation Committee adjusted Mr. West's award allocation to increase his performance stock options exposure to align with Mr. Hauenstein. This mix and the other terms of the 20182021 LTIP are intended to balance the performance and retention incentives with the volatility of airline stocks.
Performance awards are dollar-denominated long-term incentive opportunities payable in Delta stockcash. Performance during the award’s three-year performance period is measured over the following two separate periods: (1) January 1, 2021 – December 31, 2021 and (2) January 1, 2022 – December 31, 2023. One-third of the named executive officer’s target performance award is allocated to the first performance period and the remaining two-thirds is allocated to the second performance period. Any payouts under this award, including amounts earned under the first performance period in 2021, will occur in 2024.
The following chart shows the three performance measures for the named executive officers for the first performance period and the actual performance for each measure in cash to other participants. The chart on the following page shows the range of potential payments of the performance awards based on the 2018 LTIP’s four performance measures over the three-year period ending December 31, 2020.2021.
2019 PROXY STATEMENT 35
| ir.delta.com | 2022 PROXY STATEMENT | 32 |
For purposes of the 20182021 LTIP, the Industry Group consists of: Alaska Airlines, American Airlines, JetBlue Airways, Southwest Airlines and United Airlines.
In February 2022, the Personnel & Compensation Committee approved the performance measures for the second performance period. The following chart shows the range of potential payments of the performance awards based on the 2021 LTIP’s three performance measures over the second performance period.
For purposes of the 2021 LTIP, the Industry Group consists of: Alaska Airlines, American Airlines, JetBlue Airways, Southwest Airlines and United Airlines.
The 20182021 LTIP provides that restricted stock will vest in three equal installments, as follows: 50% on February 1, 2019,2022 and 25% on each of February 1, 20202023 and February 1, 2021,2024, subject to forfeiture in certain circumstances. Restricted stockBecause these awards were granted while Delta is restricted from paying dividends under the CARES Act, they are not eligible for dividends, buteven if dividends will not become payable until the restrictions on the underlying stock lapse.are later paid while these awards remain unvested. The value of a participant’san individual’s restricted stock award will depend on the price of Delta stock when the award vests.
| 2022 PROXY STATEMENT | 33 |
Stock options are inherently performance-based, as they provide realized value only if the stock price appreciates. Nevertheless, the Personnel & Compensation Committee added a performance hurdle based on employees receiving a payout under the Profit Sharing Program to further align our named executive officers’ interests with the interests of our people. The 20182021 LTIP generally provides that the performance stock options will become exercisable on the vesting dates describedvest in the chart below, subject to the achievement of the following performance measures:
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Because our people received a payout under the Profit Sharing Program for 2018, one-third of the named executive officers’ performance stock options vested and became exercisable on February 6, 2019 (the date on which the Personnel & Compensation Committee certified the performance measure was satisfied) and the remaining two-thirds will vest inthree equal installments on each of February 1, 20202022, February 1, 2023 and February 1, 2021, subject to forfeiture in certain circumstances.2024.
For additional information about the vesting and possible forfeiture of the 20182021 LTIP awards, see “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control—Long-Term Incentive Programs” on page 47.
The 20162019 Long-Term Incentive Program Payouts
In 2016,2019, the Personnel & Compensation Committee granted the named executive officersMr. Bastian, Mr. Hauenstein and Mr. Carter performance awards under the 20162019 Long-Term Incentive Program (2016(2019 LTIP). We reported these award opportunities in our 20172020 proxy statement.
The performance awards were denominated in cash but paid in shares of Delta stock to the named executive officers. The payout of these award opportunities is based on the average annual operating income margintotal revenue per available seat mile (TRASM) relative to the composite performance of an industry peer group, Delta’s customer service performance, and return on invested capital and total shareholder return relative to all other S&P 500 companies over the three-year performance period ended December 31, 2018. As mentioned in the Performance Measure Selection discussion on page 32, the performance measures included in the 2017 and 2018 LTIPs have been changed from the measures used to determine the 2016 LTIP payouts.2021.
Summarized in the chart below are the performance results certified by the Personnel & Compensation Committee for the performance awards under the 20162019 LTIP and the resulting percentage of target award opportunity earned:
This column reflects the percentage of the target award earned after application of the performance measure weightings.
| ir.delta.com | 2022 PROXY STATEMENT | 34 |
The 2020 Long-Term Incentive Program - Performance Stock Options
In 2020, the Personnel & Compensation Committee granted Mr. Bastian, Mr. Hauenstein and Mr. Carter performance stock options under the 2020 Long-Term Incentive Program (2020 LTIP). We reported these award opportunities in our 2021 proxy statement.
Under the 2020 LTIP, the performance stock options will become exercisable based on a time-based vesting schedule subject to employees receiving a payout under the Profit Sharing Program for 2020 or 2021. There was no profit sharing payment made for 2020 and the performance stock options remained unvested.
Because our people received a payout under the Profit Sharing Program for 2021, two-thirds of the applicable named executive officers’ performance stock options vested and became exercisable on February 9, 2022 (the date on which the Personnel & Compensation Committee certified the performance measure was satisfied) and the remaining one-third will vest on February 1, 2023.
In connection with the hiring of Mr. Bellemare and Mr. Janki, each were provided with a one-time cash signing bonus and initial equity award consisting of time-based restricted stock to replace forfeited opportunities and as an inducement to join Delta. These sign-on awards were an important part of their total compensation package, which was essential to the successful recruitment of these individuals. The awards set forth below were paid or granted shortly following the commencement of their employment.
Named Executive Officer |
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Mr. Janki |
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| $1,500,000 | $4,500,000 |
The sign-on bonus is subject to the following repayment conditions: if the executive’s employment is terminated by Delta for cause or by the executive without good reason (a) on or before the first anniversary of the applicable hire date, he will repay the entire after-tax portion of the signing bonus or (b) after the first anniversary but before the second anniversary of the hire date, he will repay the after-tax portion of one-half of the signing bonus.
The initial equity awards will vest in equal installments on the first, second and third anniversaries of the executive’s hire date, subject generally to the executive’s continued employment. For additional information about the possible forfeiture of these initial equity awards, see “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control—Long-Term Incentive Programs” on page 47.
Our named executive officers participate in the same ongoing retirement plans as our frontline employees, including a defined contribution plan and, for certain officers, a frozen defined benefit pension plan. We do not provide any supplemental executive retirement plans or deferred compensation plans. The named executive officers also receive the same health and welfare benefits provided to all Delta employees, except for basic life insurance coverage, which all other employees receive and our officers do not. In addition, Delta requires officers to regularly complete a comprehensive physical examination. Delta pays the cost of this examination. Every domestic full-time Delta employee is eligible for a free physical under the company’s health plans. Other than eligibility for flight benefits (for the executive officer, immediate family members and other designees and, in certain circumstances, the executive officer’s surviving spouse), Delta provides no perquisites to any of our officers. Delta provides certain flight benefits to all employees and eligible retirees and survivors. These benefits are a low-cost, highly valued tool for attracting and retaining talent and are consistent with industry practice. See the Summary Compensation Table and the related footnotes beginning on page 4138 for information regarding benefits received in 20182021 by the named executive officers.
2019 PROXY STATEMENT 37
The Personnel & Compensation Committee requested Meridianits consultant, FW Cook conduct a risk assessment of Delta’s executive compensation program. Based on this review, MeridianFW Cook determined that the executive compensation program does not encourage unnecessary risk-taking, and the Personnel & Compensation Committee and company management agree with this assessment. The Personnel & Compensation Committee notes the executive compensation program includes: (1) a compensation clawback policy for officers; (2) stock ownership and retention guidelines for executive officers; (3) incentive compensation capped at specified levels; (4) an emphasis on longer-term compensation; (5) use of multiple performance measures, both annual and long-term; and (6) an anti-hedging and anti-pledging policy for all employees. These features are designed to align the interests of executives with preserving and enhancing shareholder value.
| 2022 PROXY STATEMENT | 35 |
Executive Compensation Policies
The Personnel & Compensation Committee monitors the continuing dialogue among corporate governance experts, securities regulators and related parties regarding best practices for executive compensation. Delta’s executive compensation policies, described below, are alignedconsistent with our executive compensation philosophy, align with shareholder interests and foster responsible behavior.
CLAWBACK POLICYClawback Policy
The compensation clawback policy holds officers accountable in the event of wrongful conduct. Under this policy, if the Personnel & Compensation Committee determines an officer has engaged in fraud or misconduct that requires a restatement of Delta’s financial statements, the Personnel & Compensation Committee may recover all incentive compensation awarded to or earned by the officer for fiscal periods materially affected by the restatement. For this purpose, incentive compensation includes annual and long-term incentive awards and all forms of equity compensation.
STOCK OWNERSHIP GUIDELINESStock Ownership Guidelines
Under Delta’s rigorous stock ownership guidelines, executive officers are required to own a substantial number of shares of Delta stock as shown below:indicated in the following table:
| Shares Equal to a Multiple of Base Salary | OR | Shares |
Chief Executive Officer | 8x |
| 400,000 |
| 6x |
| 200,000 |
Executive Vice Presidents | 4x |
| 150,000 |
Executive officers must achieve the applicable ownership level within five years of the date they become subject to the guidelines. Each executive officer must hold at least 50% of all net shares received through restricted stock vesting or realized through stock option exercises until the applicable stock ownership guideline is achieved. For this purpose, “net shares” means all shares retained after applicable withholding of any shares for tax purposes. Stock ownership does not include shares an executive officer has the right to acquire through the exercise of stock options. The stock ownership of our executive officers is measured based on the three-month average of the closing price of Delta stock on the NYSE. As of December 31, 2018,2021, all of our named executive officers exceeded their required stock ownership level.levels.
EQUITY AWARD GRANT POLICYEquity Award Grant Policy
Delta’s equity award grant policy provides objective, standardized criteria for the timing, practices and procedures used in granting equity awards. Under this policy, the Personnel & Compensation Committee will consider approval of annual equity awards for management employees in the first quarter of the calendar year. Once approved, the grant date of these awards will be the later of (1) the date the Personnel & Compensation Committee approves the awards and (2) the third business day following the date on which Delta publicly announces its financial results for the most recently completed fiscal year. Equity awards for new hires, promotions or other off-cycle grants may be approved as appropriate and, once approved, these awards will be made on the later of (1) the date on which the grant is approved and (2) the third business day following the date on which Delta publicly announces its quarterly or annual financial results if this date is in the same month as the grant.
ANTI-HEDGING AND ANTI-PLEDGING POLICYAnti-Hedging and Anti-Pledging Policy
Under Delta’s insider trading policy, employees and Board members are prohibited from engaging in transactions in Delta securities involving publicly traded options, short sales and hedging transactions because they may create the appearance of unlawful insider trading and, in certain circumstances, present a conflict of interest. In addition, employees and Board members are prohibited from holding Delta securities in a margin account or otherwise pledging Delta securities as collateral for a loan.
The Personnel & Compensation Committee evaluates Mr. Bastian’s performance and makes compensation decisions based on his delivery of the Flight Plan and his progress toward meeting Delta’s long-term business strategies. In 2018, Mr. Bastian led Delta to exceed its operational, customer-service goalsthrough a year that rivaled the challenges of 2020. The company began 2021 focused on transitioning the airline toward recovery, prioritizing safety, reliability and mostcustomer experience. Even with the headwinds of its financial goals despite challenging headwinds, while also advancing the company’s future success by developing our global relationships, upgrading our fleet, making technology a competitive advantagenew virus variants and prioritizing the company’s diversity, inclusion and sustainability efforts.
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The Personnel & Compensation Committee recognizedfrequently changing travel restrictions, under Mr. Bastian’s leadership, Delta ended 2021 profitable for the second half, delivering industry-leading operational performance by increasingand achieving levels of customer satisfaction that exceeded 2019 levels.
While recognizing his target award opportunity under the 2018 LTIP to $11.5 million. This change is consistent with our pay for performance philosophy and provides incentive for him to focus on long-term improvementsexceptional achievements in company performance that will lead to greater shareholder value. The actual payout Mr. Bastian realizes on his 2018 LTIP award will depend upon achievement of the plan’s performance measures and stock price performance over the three-year performance period ending in 2020. In addition, after also reviewing market factors,2021, the Personnel & Compensation Committee increasedmade no changes to Mr. Bastian’s base salarycompensation in 2021. In accordance with our executive compensation philosophy and to $900,000. With these changes,continue the alignment of the interests of Mr. Bastian's total compensation was belowBastian and our shareholders, the peer group median.
As the following graphs illustrate, a substantial percentagevast majority of Mr. Bastian’s compensation is at-riskopportunity continues to be at risk and concentrated in equity-based awards.
dependent on company and stock price performance.
See the Summary Compensation Table and the related footnotes beginning on page 4138 for additional information about Mr. Bastian’s compensation.
| ir.delta.com | 2022 PROXY STATEMENT | 36 |
Our executive officers do not have employment contracts, supplemental executive retirement plans, deferred compensation plans or change in control agreements. They are eligible to receive certain benefits in the event of specified terminations of employment, including as a consequence of a change in control. The Personnel & Compensation Committee believes these provisions strengthen the alignment of the executives’ compensation with future company performance. The severance benefits and the forfeiture provisions under our long-term incentive programs for the named executive officers are described in “Post-Employment Compensation — Compensation—Potential Post-Employment Benefits upon Termination or Change in Control” beginning on page 47.46.
Tax and Accounting Impact and Policy
The financial and tax consequences to Delta of the executive compensation program are important considerations for the Personnel & Compensation Committee when analyzing the overall design and mix of compensation. The Personnel & Compensation Committee seeks to balance an effective compensation program with an appropriate impact on reported earnings and other financial measures.
Internal Revenue Code Section 162(m) limits deductions for certain compensation to any covered executive to $1 million per year. Prior to 2018, this limitation did not apply to the chief financial officer or compensation that met the tax code requirements for qualifyingyear, including performance-based compensation. ChangesThe inclusion of performance-based awards in the tax law effective January 1, 2018, expanded the limitation on deductibility to include the chief financial officer and eliminated the performance-based exception (except in the case of certain arrangements in place as of November 2, 2017). The elimination of the performance-based exceptionannual limit has not altered the Personnel & Compensation Committee'sCommittee’s commitment to ain this area because pay for performance is a foundational principle of our executive compensation program.philosophy.
Equity awards granted under our executive compensation program are expensed in accordance with Statement of Financial Accounting Standards Codification Topic 718, Stock Compensation.
2019 PROXY STATEMENT 39
The Personnel & Compensation Committee has reviewed and discussed with Delta management the Compensation Discussion and Analysis and, based on such review and discussion, the Personnel & Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
THE PERSONNEL & COMPENSATION COMMITTEE
DanielSergio A. Carp,L. Rial, Chair
Francis S. Blake
Jeanne P. Jackson
George N. MattsonSergio A. L. Rial
Compensation Committee Interlocks and Insider Participation
None of the membersDavid S. Taylor (member of the Personnel & Compensation Committee is a former or current officer or employee of Delta or has any interlocking relationships as set forth in applicable SEC rules.until April 20, 2022)
Kathy N. Waller
| 37 |
The table below contains information about the compensation of the following named executive officers during 2018:2021: (1) Mr. Bastian, Delta’s principal executive officer; (2) Mr. Jacobson,Janki, Delta’s principal financial officer; andofficer effective July 19, 2021; (3) Mr. Hauenstein, Mr. WestBellemare and Mr. Carter, who were Delta’s three other most highly compensated executive officers on December 31, 2018.2021; and (4) Mr. Carroll and Mr. Chase, who served as Delta's principal financial officers until July 18, 2021.
Name | Year | Salary ($) | Bonus ($) | Stock Awards ($)(1)(2)(3) | Option Awards ($)(1)(4) | Non-Equity Incentive Plan Compensation ($)(5) | Change in Pension Value and Nonqualified Deferred Compensation earnings ($)(6) | All Other compensation ($)(7) |
| Total ($)(8) |
Edward H. Bastian Chief Executive Officer | 2018 | 891,667 | - | 7,705,118 | 3,795,014 | 2,277,090 | - | 313,559 |
| 14,982,448 |
2017 | 800,004 | - | 6,700,177 | 3,300,030 | 2,119,531 | 32,292 | 253,669 |
| 13,205,703 | |
2016 | 741,669 | - | 6,700,405 | 3,300,032 | 1,512,980 | 24,104 | 278,041 |
| 12,557,231 | |
Glen W. Hauenstein President | 2018 | 693,750 | - | 4,020,040 | 1,980,072 | 1,549,686 | - | 220,252 |
| 8,463,800 |
2017 | 625,000 | - | 4,020,106 | 1,980,082 | 1,448,891 | - | 153,110 |
| 8,227,189 | |
2016 | 604,997 | - | 6,000,368 | - | 1,069,428 | - | 214,776 |
| 7,889,569 | |
W. Gil West Senior Executive Vice President & Chief Operating Officer | 2018 | 693,750 | - | 4,020,040 | 1,980,072 | 1,549,686 | - | 198,813 |
| 8,442,361 |
2017 | 625,000 | - | 3,937,615 | 1,312,597 | 1,448,891 | - | 167,087 |
| 7,491,190 | |
2016 | 617,977 | - | 4,750,001 | - | 1,131,207 | - | 191,147 |
| 6,690,332 | |
Paul A. Jacobson Executive Vice President & Chief Financial Officer | 2018 | 547,917 | - | 3,000,035 | 1,000,048 | 1,043,666 | - | 158,317 |
| 5,749,983 |
2017 | 525,000 | - | 3,000,393 | 1,000,028 | 1,043,201 | 17,223 | 153,712 |
| 5,739,557 | |
2016 | 525,000 | - | 4,000,391 | - | 832,466 | 11,183 | 183,200 |
| 5,552,240 | |
Peter W. Carter Executive Vice President & Chief Legal Officer | 2018 | 545,833 | - | 1,912,657 | 637,529 | 869,722 | - | 151,433 |
| 4,117,174 |
2017 | 500,000 | - | 1,912,683 | 637,602 | 827,938 | - | 139,990 |
| 4,018,213 | |
2016 | 500,000 | - | 2,550,156 | - | 660,688 | - | 129,926 |
| 3,840,770 | |
(1) The amounts in the “Stock Awards” and “Option Awards” columns do not represent amounts the named executive officers received or are entitled to receive. Rather, the reported amounts represent the aggregate fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (FASB ASC Topic 718), on the applicable grant date or, if earlier, the service inception date. The reported amounts do not reflect the risk the stock awards may be forfeited in certain circumstances; for awards subject to performance conditions, the risk there is no payout; or in the case of performance stock options, that there is no vesting because the performance conditions are not met. The fair value of restricted stock awards is based on the closing price of Delta common stock on the grant date. The reported amounts for 2018, 2017 and 2016 in the “Stock Awards” column reflect award opportunities under Delta’s long-term incentive programs. For additional information, see footnotes 2 and 3 below. (2) The 2018 Long-Term Incentive Program (2018 LTIP) provides our executive officers with a long-term incentive opportunity consisting of performance awards, performance stock options and restricted stock. The performance awards under the 2018 LTIP are denominated in dollars. The payouts, if any, earned by a named executive officer will be made in stock based on the achievement of pre-established performance measures over a three-year performance period. The restricted stock granted under the 2018 LTIP vests in equal installments on February 1, 2019, 2020 and 2021, subject to forfeiture in certain circumstances. See “Compensation Discussion and Analysis — Elements of Compensation — Long-Term Incentives” on page 35 for details about the 2018 LTIP. The reported amounts for 2018 in the “Stock Awards” column include the fair value of the performance awards and restricted stock under the 2018 LTIP, computed in accordance with FASB ASC Topic 718 on February 8, 2018, the date the 2018 LTIP awards became effective. See footnote 4 below for additional information regarding the performance stock options. (3) For awards in the “Stock Awards” column that are subject to performance conditions, the fair value is computed in accordance with FASB ASC Topic 718 based on the probable outcome of the performance condition as of the applicable grant date or, if earlier, the service inception date. For these purposes, the fair value of the performance awards under the 2018 LTIP is computed based on performance at the target level. If the performance awards were assumed to pay out at the maximum level, the aggregate fair value of such awards, which does not include the restricted stock or performance stock option component of the 2018 LTIP, for the named executive officers would be as follows: | ||||||||||
Name | Year | Salary | Bonus | Signing | Stock | Option | Non-Equity | Change in | All Other |
| Total |
Edward H. Bastian Chief Executive Officer | 2021 | 950,000 | - | - | 4,125,186 | 4,125,062 | 3,038,542 | 0 | 121,630 |
| 12,360,420 |
2020 | 237,500 | - | - | 8,375,245 | 4,125,054 | - | 17,726 | 378,487 |
| 13,134,012 | |
2019 | 945,833 | - | - | 8,375,463 | 4,125,096 | 3,516,987 | 33,393 | 328,606 |
| 17,325,379 | |
Glen W. Hauenstein President | 2021 | 700,000 | - | - | 2,227,680 | 2,227,583 | 1,827,375 | - | 77,212 |
| 7,059,850 |
2020 | 437,500 | - | - | 4,522,809 | 2,227,547 | - | - | 267,253 |
| 7,455,109 | |
2019 | 700,000 | - | - | 4,522,932 | 2,227,509 | 2,227,520 | - | 239,872 |
| 9,967,833 | |
Alain M. Bellemare(8) Executive Vice President & President - International | 2021 | 609,375 | - | 1,000,000 | 4,665,548 | 1,125,032 | 1,362,809 | - | 56,755 |
| 8,819,519 |
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Peter W. Carter Executive Vice President & Chief Legal Officer | 2021 | 550,000 | - | - | 2,697,084 | 775,092 | 1,121,929 | - | 74,932 |
| 5,219,037 |
2020 | 343,750 | - | - | 2,325,177 | 775,037 | - | - | 174,086 |
| 3,618,050 | |
2019 | 550,000 | - | - | 2,350,193 | 700,056 | 1,278,200 | - | 159,010 |
| 5,037,459 | |
Daniel C. Janki(8) Executive Vice President & Chief Financial Officer | 2021 | 307,765 | - | 1,500,000 | 6,114,459 | 1,125,120 | 1,572,281 | - | 32,776 |
| 10,652,401 |
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William C. Carroll(9) Senior Vice President & Interim Co-Chief Financial Officer | 2021 | 475,000 | 875,000 | - | 420,077 | 150,092 | 485,833 | - | 70,475 |
| 2,476,477 |
2020 | 296,875 | - | - | 850,475 | 150,079 | - | - | 114,539 |
| 1,411,968 | |
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Garrett L. Chase(9) Senior Vice President & Interim Co-Chief Financial Officer | 2021 | 479,167 | 875,000 | - | 420,077 | 150,092 | 488,979 | - | 52,326 |
| 2,465,641 |
2020 | 281,250 | - | - | 850,475 | 150,079 | - | - | 87,942 |
| 1,369,746 | |
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Name | 2018 ($) | 2017 ($) | 2016 ($) |
Edward H. Bastian | 7,820,000 | 6,800,000 | 6,800,000 |
Glen W. Hauenstein | 4,080,000 | 4,080,000 | 6,000,000 |
W. Gil West | 4,080,000 | 3,990,000 | 4,750,000 |
Paul A. Jacobson | 3,040,000 | 3,040,000 | 4,000,000 |
Peter W. Carter | 1,938,000 | 1,938,000 | 2,550,000 |
Beginning with the 2017 LTIP, performance stock options were granted to all named executive officers. Accordingly, the percentage of performance awards granted to the named executive officers (other than Mr. Bastian) was reduced to 38% of the total 2017 LTIP award from 50% in 2016. | |||
2019 PROXY STATEMENT 41
The amounts in the “Stock Awards” and “Option Awards” columns do not represent amounts the named executive officers received or are entitled to receive. Rather, the reported amounts represent the aggregate fair value of awards computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (FASB ASC Topic 718) on the applicable grant date or, if earlier, the service inception date. The reported amounts do not reflect the risk the stock The reported amounts for 2021, 2020 and 2019 in the “Stock Awards” and “Option Awards” columns, as applicable, primarily reflect award opportunities under Delta’s long-term incentive programs. For additional information, see footnotes 2 and 3 below. (2) The 2021 Long-Term Incentive Program (2021 LTIP) provides our executive officers with a long-term incentive opportunity consisting of cash-settled performance awards with separate performance periods, restricted stock and stock options. See “Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives” on page 32 for details about the 2021 LTIP. The reported amounts for 2021 in the “Stock Awards” column include the fair value of the restricted stock under the See footnotes 3, 4 and 8 for additional information regarding, respectively, the stock options, (3) We determined the grant date fair value of stock options |
| ir.delta.com | 2022 PROXY STATEMENT | 38 |
The The reported The reported amounts of all other compensation for |
Name | Contributions to Qualified Defined Contribution Plan(a) | Payment due to IRS limits to Qualified Plan(b) | Reimbursement of Taxes(c) | Perquisites and Other Benefits(d) | Contributions to Qualified Defined Contribution Plan ($)(a) | Payment due to IRS limits to Qualified Plan ($)(b) |
Reimbursement of Taxes ($)(c) |
Perquisites and Other Benefits ($)(d) |
Edward H. Bastian | 24,750 | 246,258 | 20,898 | 21,653 | 26,100 | 59,400 | 21,541 | 14,589 |
Glen W. Hauenstein | 24,750 | 168,087 | 16,597 | 10,818 | 26,100 | 36,900 | 14,212 |
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W. Gil West | 24,750 | 168,088 | 5,975 | - | ||||
Paul A. Jacobson | 24,750 | 118,451 | 15,116 | - | ||||
Alain M. Bellemare | 20,413 | 28,744 | 7,599 |
| ||||
Peter W. Carter | 24,750 | 98,889 | 15,767 | 12,027 | 26,100 | 23,400 | 8,921 | 16,511 |
(a) Represents Delta’s contributions to the Delta Family-Care Savings Plan, a broad-based tax qualified defined contribution plan, based on the same fixed and matching contribution formula applicable to all participants in this plan. (b) Represents amounts paid directly to the named executive officer that Delta would have contributed to the officer’s account under the Delta Family-Care Savings Plan absent limits applicable to such plans under the Internal Revenue Code. These payments are based on the same fixed and matching contribution formula applicable to all participants in this plan and are available to any plan participant affected by such limits. (c) Represents tax reimbursements for flight benefits as described below. (d) The amounts consist of an annual physical examination for officers and flight benefits as described below. Mr. West and Mr. Jacobson did not receive perquisites or other personal benefits with a total incremental cost of $10,000 or more, the threshold for reporting under SEC rules. From time to time, the named executive officers attend events sponsored by Delta at no incremental cost to Delta. As is common in the airline industry, Delta provides complimentary travel and certain Delta Sky Club® privileges for named executive officers; the officer’s spouse, domestic partner or designated companion; the officer’s children and parents; and, to a limited extent, other persons designated by the officer. Complimentary travel for such other persons is limited to an aggregate imputed value of $20,000 per year for the Chief Executive Officer, President and Senior Executive Vice President and $15,000 per year for executive vice presidents. Delta reimburses the officer for associated taxes on complimentary travel with an imputed tax value of up to $25,000 per year for the Chief Executive Officer, President and Senior Executive Vice President and $20,000 per year for Executive Vice Presidents. Unused portions of the annual allowances described in the previous two sentences accumulate and may be carried into succeeding years during employment. Complimentary travel is provided to the surviving spouse or domestic partner of eligible officers after the eligible officer’s death. Delta will not reimburse surviving spouses or domestic partners for associated taxes on complimentary travel under the survivor travel benefit. Delta’s incremental cost of providing flight benefits includes incremental fuel expense and the incremental cost on a flight segment basis for customer service expenses such as meals, onboard expenses, baggage handling, insurance, airport security and aircraft cleaning. In addition, each named executive officer may purchase private jet flights from a Delta subsidiary by paying the incremental cost of the flight. Also, certain named executive officers have flight benefits on another airline at no incremental cost to the officers or Delta. | ||||||||
Daniel C. Janki | 25,509 | 1,599 | 5,668 |
| ||||
William C. Carroll | 26,100 | 16,650 | 14,664 | 13,061 | ||||
Garrett L. Chase | 26,100 | 17,025 | 9,201 |
| ||||
(a) Represents Delta’s contributions to the Delta 401(k) Retirement Plan, a broad-based tax qualified defined contribution plan, based on the same fixed and matching contribution formula applicable to all participants in this plan. (b) Represents amounts paid directly to the named executive officer that Delta would have contributed to the officer’s account under the Delta 401(k) Retirement Plan absent limits applicable to such plans under the Internal Revenue Code. These payments are based on the same fixed and matching contribution formula applicable to all participants in this plan and are available to any plan participant affected by such limits. (c) Represents tax reimbursements for flight benefits as described below. | (a) Represents Delta’s contributions to the Delta 401(k) Retirement Plan, a broad-based tax qualified defined contribution plan, based on the same fixed and matching contribution formula applicable to all participants in this plan. (b) Represents amounts paid directly to the named executive officer that Delta would have contributed to the officer’s account under the Delta 401(k) Retirement Plan absent limits applicable to such plans under the Internal Revenue Code. These payments are based on the same fixed and matching contribution formula applicable to all participants in this plan and are available to any plan participant affected by such limits. (c) Represents tax reimbursements for flight benefits as described below. | |||||||
The amounts consist of an annual physical examination for officers and flight benefits as described below. Mr. Hauenstein, Mr. Bellemare, Mr. Janki and Mr. Chase did not receive perquisites or other personal benefits with a total incremental cost of $10,000 or more, the threshold for reporting under SEC rules. From time to time, the named executive officers attend events sponsored by Delta at no incremental cost to Delta. As is common in the airline industry, Delta provides complimentary travel and certain Delta Sky Club® privileges for named executive officers; the officer’s spouse, domestic partner or designated companion; the officer’s children and parents; and, to a limited extent, other persons designated by the officer. Complimentary travel for such other persons is limited to an aggregate imputed value of $35,000 per year for the Chief Executive Officer and President, $15,000 per year for Executive Vice Presidents and $12,500 per year for Senior Vice Presidents. Delta reimburses the officer for associated taxes on complimentary travel with an imputed tax value of up to $40,000 per year for the Chief Executive Officer and President, $20,000 per year for Executive Vice Presidents and $17,500 per year for Senior Vice Presidents. Unused portions of the annual allowances described in the previous two sentences accumulate and may be carried into succeeding years during employment. Complimentary travel is provided to the surviving spouse or domestic partner of eligible officers after the eligible officer’s death. Delta will not reimburse surviving spouses or domestic partners for associated taxes on complimentary travel under the survivor travel benefit. Delta’s incremental cost of providing flight benefits includes incremental fuel expense and the incremental cost on a flight segment basis for customer service expenses such as meals, onboard expenses, baggage handling, insurance, airport security and aircraft cleaning. |
(7) As required by SEC rules, the amount in the “Total” column for each named executive officer represents the sum of the amounts in all the other columns. As discussed in footnote (1) above, the amounts in the “Stock Awards” and “Option Awards” columns do not represent amounts the named executive officers received or are entitled to receive. Rather, these amounts represent the aggregate fair value of awards computed in accordance with FASB ASC Topic 718 on the applicable grant date or, if earlier, the service inception date. The amounts do not reflect the risk the awards may be forfeited in certain (8) Mr. Bellemare joined Delta as its Executive Vice President & President - International on January 25, 2021. Mr. Janki joined Delta on July 12, 2021, and was appointed its Chief Financial Officer on July 19, 2021. Their compensation for 2021 includes a one-time cash signing bonus and a restricted stock grant paid in connection with the executive's hiring. See “Compensation Discussion and Analysis—Elements of Compensation—Sign-On Awards” on page 35 for details about these awards, | ||
(9) Mr. Carroll and Mr. Chase served as Delta's Interim Co-Chief Financial Officers from November 16, 2020 until July 18, 2021, and were not named executive officers in |
| 39 |
The following table provides information about annual and long-term award opportunities granted to the named executive officers during 20182021 under the 20182021 MIP and the 2018 LTIP.2021 LTIP and, in addition for Mr. Bellemare and Mr. Janki, a restricted stock award under the Delta Air Lines, Inc. Performance Compensation Plan. These award opportunities are described in the “Compensation Discussion and Analysis” section of thethis proxy statement under “Elements of Compensation — Compensation—Annual Incentive” and “Elements of Compensation — Compensation—Long-Term Incentives” beginning on page 34.31.
Name/Type of Award | Grant Date(1) | Date of Personnel & Compensation Committee or Board Action | Estimated Possible Payouts Under Non-Equity Incentive Plan Awards(2) |
| Estimated Future Payouts Under Equity Incentive Plan Awards(3) | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($/Sh)(6) | Grant Date Fair Value of Stock and Option Awards ($)(7) | ||||
Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | ||||||||
Edward H. Bastian |
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 MIP | 1/1/2018 | 12/13/2017 | 900,000 | 1,800,000 | 3,600,000 |
|
|
|
|
|
|
|
|
2018 LTIP - Performance Award | 2/8/2018 | 2/8/2018 |
|
|
|
| 1,955,000 | 3,910,000 | 7,820,000 |
|
|
| 3,910,000 |
2018 LTIP - Restricted Stock | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
| 74,080 |
|
| 3,795,118 |
2018 LTIP - Performance | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
|
| 307,040 | 51.23 | 3,795,014 |
Glen W. Hauenstein |
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 MIP | 1/1/2018 | 12/13/2017 | 612,500 | 1,225,000 | 2,450,000 |
|
|
|
|
|
|
|
|
2018 LTIP - Performance Award | 2/8/2018 | 2/8/2018 |
|
|
|
| 1,020,000 | 2,040,000 | 4,080,000 |
|
|
| 2,040,000 |
2018 LTIP - Restricted Stock | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
| 38,650 |
|
| 1,980,040 |
2018 LTIP - Performance | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
|
| 160,200 | 51.23 | 1,980,072 |
W. Gil West |
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 MIP | 1/1/2018 | 12/13/2017 | 612,500 | 1,225,000 | 2,450,000 |
|
|
|
|
|
|
|
|
2018 LTIP - Performance Award | 2/8/2018 | 2/8/2018 |
|
|
|
| 1,020,000 | 2,040,000 | 4,080,000 |
|
|
| 2,040,000 |
2018 LTIP - Restricted Stock | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
| 38,650 |
|
| 1,980,040 |
2018 LTIP - Performance | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
|
| 160,200 | 51.23 | 1,980,072 |
Paul A. Jacobson |
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 MIP | 1/1/2018 | 12/13/2017 | 412,500 | 825,000 | 1,650,000 |
|
|
|
|
|
|
|
|
2018 LTIP - Performance Award | 2/8/2018 | 2/8/2018 |
|
|
|
| 760,000 | 1,520,000 | 3,040,000 |
|
|
| 1,520,000 |
2018 LTIP - Restricted Stock | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
| 28,890 |
|
| 1,480,035 |
2018 LTIP - Performance | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
|
| 80,910 | 51.23 | 1,000,048 |
Peter W. Carter |
|
|
|
|
|
|
|
|
|
|
|
|
|
2018 MIP | 1/1/2018 | 12/13/2017 | 343,750 | 687,500 | 1,375,000 |
|
|
|
|
|
|
|
|
2018 LTIP - Performance Award | 2/8/2018 | 2/8/2018 |
|
|
|
| 484,500 | 969,000 | 1,938,000 |
|
|
| 969,000 |
2018 LTIP - Restricted Stock | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
| 18,420 |
|
| 943,657 |
2018 LTIP - Performance | 2/8/2018 | 2/8/2018 |
|
|
|
|
|
|
|
| 51,580 | 51.23 | 637,529 |
Name/Type of Award | Grant Date(1) | Date of Personnel & Compensation Committee or Board Action | Estimated Future Payouts Under Non-Equity Incentive Plan Awards(2)(3) |
| Estimated Future Payouts Under Equity Incentive Plan Awards | All Other Stock Awards: Number of Shares of Stock or Units (#)(4) | All Other Option Awards: Number of Securities Underlying Options (#)(5) | Exercise or Base Price of Option Awards ($/Sh)(6) |
| ||||
Threshold ($) | Target ($) | Maximum ($) | Threshold ($) | Target ($) | Maximum ($) | Grant Date Fair Value of Stock and Option Awards ($)(7) | |||||||
Edward H. Bastian |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/1/2021 | 12/15/2020 | 950,000 | 1,900,000 | 2,850,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 2,125,000 | 4,250,000 | 8,500,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 103,700 |
|
| 4,125,186 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 249,550 | 39.78 | 4,125,062 |
Glen W. Hauenstein |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/1/2021 | 12/15/2020 | 612,500 | 1,225,000 | 1,837,500 |
|
|
|
|
|
|
|
|
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 1,147,500 | 2,295,000 | 4,590,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 56,000 |
|
| 2,227,680 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 134,760 | 39.78 | 2,227,583 |
Alain M. Bellemare |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/25/2021 | 12/15/2020 | 457,032 | 914,063 | 1,371,095 |
|
|
|
|
|
|
|
|
2021 Restricted Stock | 1/25/2021 | 1/19/2021 |
|
|
|
|
|
|
| 77,130 |
|
| 3,000,357 |
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 855,000 | 1,710,000 | 3,420,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 41,860 |
|
| 1,665,191 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 68,060 | 39.78 | 1,125,032 |
Peter W. Carter |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/1/2021 | 12/15/2020 | 412,500 | 825,000 | 1,237,500 |
|
|
|
|
|
|
|
|
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 589,000 | 1,178,000 | 2,356,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 67,800 |
|
| 2,697,084 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 46,890 | 39.78 | 775,092 |
Daniel C. Janki |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 7/19/2021 | 12/15/2020 | 487,500 | 975,000 | 1,462,500 |
|
|
|
|
|
|
|
|
2021 Restricted Stock | 7/19/2021 | 6/16/2021 |
|
|
|
|
|
|
| 116,710 |
|
| 4,500,338 |
2021 LTIP - Performance Award | 7/19/2021 | 6/16/2021 | 855,000 | 1,710,000 | 3,420,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 7/19/2021 | 6/16/2021 |
|
|
|
|
|
|
| 41,860 |
|
| 1,614,122 |
2021 LTIP - Stock Options | 7/19/2021 | 6/16/2021 |
|
|
|
|
|
|
|
| 73,730 | 38.56 | 1,125,120 |
William C. Carroll |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/1/2021 | 12/15/2020 | 190,000 | 380,000 | 570,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 215,000 | 430,000 | 860,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 10,560 |
|
| 420,077 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 9,080 | 39.78 | 150,092 |
Garrett L. Chase |
|
|
|
|
|
|
|
|
|
|
|
|
|
2021 MIP | 1/1/2021 | 12/15/2020 | 180,000 | 360,000 | 540,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Performance Award | 2/3/2021 | 2/3/2021 | 215,000 | 430,000 | 860,000 |
|
|
|
|
|
|
|
|
2021 LTIP - Restricted Stock | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
| 10,560 |
|
| 420,077 |
2021 LTIP - Stock Options | 2/3/2021 | 2/3/2021 |
|
|
|
|
|
|
|
| 9,080 | 39.78 | 150,092 |
| ir.delta.com | 2022 PROXY STATEMENT | 40 |
(1) For purposes of this column, the grant date for the (2) These columns show the annual award opportunities under the (3) These columns show the long-term award opportunities under the performance award component of the (4) This column shows the restricted stock component of the (5) This column shows the (6) The exercise price is equal to the closing price of Delta common stock on the NYSE on the date of grant. (7) The amounts in this column do not represent amounts the named executive officers received or are entitled to receive. Rather, the reported amounts represent the fair value of the awards computed in accordance with FASB ASC Topic 718 on the applicable grant date or, if earlier, the service inception date. For awards subject to performance conditions, the value shown is based on the probable outcome of the performance condition as of the applicable grant date or, if earlier, the service inception date. The amounts do not reflect the risk that the awards may be forfeited in certain circumstances or, in the case of performance awards, that there is no |
2019 PROXY STATEMENT 43
| 2022 PROXY STATEMENT | 41 |
The following table provides information regarding the outstanding equity awards on December 31, 20182021 for each of the named executive officers.
Name | Grant Date(1) | Option Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($)(3) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||
Edward H. Bastian |
|
|
|
|
|
|
|
|
|
|
|
2016 LTIP - Restricted Stock | 2/2/2016 | - | - | - | - | - |
| 25,226 | 1,258,777 | - | - |
2017 LTIP - Restricted Stock | 2/9/2017 | - | - | - | - | - |
| 44,600 | 2,225,540 | - | - |
2018 LTIP - Restricted Stock | 2/8/2018 | - | - | - | - | - |
| 74,080 | 3,696,592 | - | - |
2014 LTIP - Performance Stock Options | 2/6/2014 | 71,840 | - | - | 30.89 | 2/5/2024 |
| - | - | - | - |
2015 LTIP - Performance Stock Options | 2/5/2015 | 91,710 | - | - | 46.14 | 2/4/2025 |
| - | - | - | - |
2016 LTIP - Performance Stock Options | 2/2/2016 | 115,487 | 57,473 | - | 43.61 | 2/1/2026 |
| - | - | - | - |
2017 LTIP Performance Stock Options | 2/9/2017 | 68,837 | 137,673 | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP Performance Stock Options | 2/8/2018 | - | - | 307,040 | 51.23 | 2/7/2028 |
| - | - | - | - |
Glen W. Hauenstein |
|
|
|
|
|
|
|
|
|
|
|
2016 LTIP - Restricted Stock | 2/2/2016 | - | - | - | - | - |
| 22,933 | 1,144,357 | - | - |
2017 LTIP - Restricted Stock | 2/9/2017 | - | - | - | - | - |
| 26,760 | 1,335,324 | - | - |
2018 LTIP - Restricted Stock | 2/8/2018 | - | - | - | - | - |
| 38,650 | 1,928,635 | - | - |
2017 LTIP Performance Stock Options | 2/9/2017 | 41,304 | 82,606 | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP Performance Stock Options | 2/8/2018 | - | - | 160,200 | 51.23 | 2/7/2028 |
| - | - | - | - |
W. Gil West |
|
|
|
|
|
|
|
|
|
|
|
2016 LTIP - Restricted Stock | 2/2/2016 | - | - | - | - | - |
| 18,153 | 905,835 | - | - |
2017 LTIP - Restricted Stock | 2/9/2017 | - | - | - | - | - |
| 26,253 | 1,310,025 | - | - |
2018 LTIP - Restricted Stock | 2/8/2018 | - | - | - | - | - |
| 38,650 | 1,928,635 | - | - |
2017 LTIP Performance Stock Options | 2/9/2017 | 27,380 | 54,760 | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP Performance Stock Options | 2/8/2018 | - | - | 160,200 | 51.23 | 2/7/2028 |
| - | - | - | - |
Paul A. Jacobson |
|
|
|
|
|
|
|
|
|
|
|
2016 LTIP - Restricted Stock | 2/2/2016 | - | - | - | - | - |
| 15,290 | 762,971 | - | - |
2017 LTIP - Restricted Stock | 2/9/2017 | - | - | - | - | - |
| 20,006 | 998,299 | - | - |
2018 LTIP - Restricted Stock | 2/8/2018 | - | - | - | - | - |
| 28,890 | 1,441,611 | - | - |
2017 LTIP Performance Stock Options | 2/9/2017 | 20,860 | 41,720 | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP Performance Stock Options | 2/8/2018 | - | - | 80,910 | 51.23 | 2/7/2028 |
| - | - | - | - |
Name | Grant Date (1) | Option Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($)(3) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||
Edward H. Bastian |
|
|
|
|
|
|
|
|
|
|
|
2019 LTIP - Restricted Stock | 2/6/2019 | - | - | - | - | - |
| 27,220 | 1,063,758 | - | - |
2020 LTIP - Restricted Stock | 2/5/2020 | - | - | - | - | - |
| 46,700 | 1,825,036 | - | - |
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 103,700 | 4,052,596 | - | - |
2014 LTIP - Performance Stock Options | 2/6/2014 | 71,840 | - | - | 30.89 | 2/5/2024 |
| - | - | - | - |
2015 LTIP - Performance Stock Options | 2/5/2015 | 91,710 | - | - | 46.14 | 2/4/2025 |
| - | - | - | - |
2016 LTIP - Performance Stock Options | 2/2/2016 | 173,230 | - | - | 43.61 | 2/1/2026 |
| - | - | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 206,510 | - | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP - Performance Stock Options | 2/8/2018 | 307,040 | - | - | 51.23 | 2/7/2028 |
| - | - | - | - |
2019 LTIP - Performance Stock Options | 2/6/2019 | 254,400 | 127,200 | - | 50.52 | 2/5/2029 |
| - | - | - | - |
2020 LTIP - Performance Stock Options | 2/5/2020 | - | - | 369,960 | 58.89 | 2/4/2030 |
| - | - | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 249,550 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
Glen W. Hauenstein |
|
|
|
|
|
|
|
|
|
|
|
2019 LTIP - Restricted Stock | 2/6/2019 | - | - | - | - | - |
| 14,700 | 574,476 | - | - |
2020 LTIP - Restricted Stock | 2/5/2020 | - | - | - | - | - |
| 25,220 | 985,598 | - | - |
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 56,000 | 2,188,480 | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 123,910 | - | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP - Performance Stock Options | 2/8/2018 | 160,200 | - | - | 51.23 | 2/7/2028 |
| - | - | - | - |
2019 LTIP - Performance Stock Options | 2/6/2019 | 137,374 | 68,686 | - | 50.52 | 2/5/2029 |
| - | - | - | - |
2020 LTIP- Performance Stock Options | 2/5/2020 | - | - | 199,780 | 58.89 | 2/4/2030 |
| - | - | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 134,760 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
Alain M. Bellemare |
|
|
|
|
|
|
|
|
|
|
|
2021 - Restricted Stock | 1/25/2021 | - | - | - | - | - |
| 77,130 | 3,014,240 | - | - |
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 41,860 | 1,635,889 | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 68,060 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
Peter W. Carter |
|
|
|
|
|
|
|
|
|
|
|
2019 LTIP - Restricted Stock | 2/6/2019 | - | - | - | - | - |
| 6,836 | 267,151 | - | - |
2019 - Restricted Stock | 12/4/2019 | - | - | - | - | - |
| 1,486 | 58,073 | - | - |
2020 LTIP - Restricted Stock | 2/5/2020 | - | - | - | - | - |
| 12,986 | 507,493 | - | - |
| ir.delta.com |
| 42 |
Name | Grant Date(1) | Option Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($)(3) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||
Peter W. Carter |
|
|
|
|
|
|
|
|
|
|
|
2016 LTIP - Restricted Stock | 2/2/2016 | - | - | - | - | - |
| 9,746 | 486,325 | - | - |
2017 LTIP - Restricted Stock | 2/9/2017 | - | - | - | - | - |
| 12,753 | 636,375 | - | - |
2018 LTIP - Restricted Stock | 2/8/2018 | - | - | - | - | - |
| 18,420 | 919,158 | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 13,300 | 26,600 |
| 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP Performance Stock Options | 2/8/2018 | - | - | 51,580 | 51.23 | 2/7/2028 |
| - | - | - | - |
(1) For purposes of this column, the grant date for the awards is the grant date or, if earlier, the service inception date determined under FASB ASC Topic 718. (2) The 2018 LTIP Performance Stock Options vest as follows: (a) if there is a payout under the Profit Sharing Program for 2018, then ratably over three years with 1/3 vesting on each of February 1, 2019, 2020 and 2021; (b) if there is no payout under the Profit Sharing Program for 2018, but there is a payout for 2019, then 2/3 vest on February 1, 2020 and 1/3 vest on February 1, 2021; and (c) if there is no payout for 2018 or 2019 under the Profit Sharing Program, then the options will be forfeited. Because there was a payout for 2018 under the Profit Sharing Program, the options vest as described in (a) of the foregoing sentence, except that the first vesting date occurred on February 6, 2019, the date on which the Personnel & Compensation Committee certified the satisfaction of the performance measure. Performance stock options are subject to forfeiture in certain circumstances. (3) The exercise price of the stock options is the closing price of Delta common stock on the NYSE on the applicable grant date. (4) These shares of restricted stock vest as follows: February 2, 2016 LTIP Grant Date. In equal installments on February 1, 2017, 2018 and 2019. February 9, 2017 LTIP Grant Date. In equal installments on February 1, 2018, 2019 and 2020. February 8, 2018 LTIP Grant Date. In equal installments on February 1, 2019, 2020 and 2021. Restricted stock is subject to forfeiture in certain circumstances. (5) In accordance with SEC rules, the amounts in this column for the market value of restricted stock are based on the $49.90 closing price of Delta common stock on the NYSE on December 31, 2018. (6) This table does not include the performance award component of the 2018 LTIP, 2017 LTIP and the 2016 LTIP because (a) these award opportunities are denominated in dollars and (b) the payout, if any, earned by the named executive officers will be made in stock based on achievement of the pre-established performance measures during the measurement periods for each program. For additional information about the performance award component of the 2018 LTIP, see footnote 2 to the Summary Compensation Table and the Grants of Plan-Based Awards Table above. | |||||||||||
Name | Grant Date (1) | Option Awards |
| Stock Awards | |||||||
Number of Securities Underlying Unexercised Options Exercisable (#) | Number of Securities Underlying Unexercised Options Unexercisable (#) | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)(2) | Option Exercise Price ($)(3) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#)(4) | Market Value of Shares or Units of Stock That Have Not Vested ($)(5) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)(6) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) | |||
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 67,800 | 2,649,624 | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 39,900 | - | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP - Performance Stock Options | 2/8/2018 | 51,580 | - | - | 51.23 | 2/7/2028 |
| - | - | - | - |
2019 LTIP - Performance Stock Options | 2/6/2019 | 43,174 | 21,586 | - | 50.52 | 2/5/2029 |
| - | - | - | - |
2020 LTIP - Performance Stock Options | 2/5/2020 | - | - | 69,510 | 58.89 | 2/4/2030 |
| - | - | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 46,890 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
Daniel C. Janki |
|
|
|
|
|
|
|
|
|
|
|
2021 - Restricted Stock | 7/19/2021 | - | - | - | - | - |
| 116,710 | 4,561,027 | - | - |
2021 LTIP - Restricted Stock | 7/19/2021 | - | - | - | - | - |
| 41,860 | 1,635,889 | - | - |
2021 LTIP - Stock Options | 7/19/2021 | - | 73,730 | - | 38.56 | 7/18/2031 |
| - | - | - | - |
William C. Carroll |
|
|
|
|
|
|
|
|
|
|
|
2019 LTIP - Restricted Stock | 2/6/2019 | - | - | - | - | - |
| 2,773 | 108,369 | - | - |
2020 LTIP - Restricted Stock | 2/5/2020 | - | - | - | - | - |
| 4,760 | 186,021 | - | - |
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 10,560 | 412,685 | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 9,390 | - | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP - Performance Stock Options | 2/8/2018 | 12,140 | - | - | 51.23 | 2/7/2028 |
| - | - | - | - |
2019 LTIP - Performance Stock Options | 2/6/2019 | 9,254 | 4,626 | - | 50.52 | 2/5/2029 |
| - | - | - | - |
2020 LTIP - Performance Stock Options | 2/5/2020 | - | - | 13,460 | 58.89 | 2/4/2030 |
| - | - | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 9,080 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
Garrett L. Chase |
|
|
|
|
|
|
|
|
|
|
|
2019 LTIP - Restricted Stock | 2/6/2019 | - | - | - | - | - |
| 2,220 | 86,758 | - | - |
2020 LTIP - Restricted Stock | 2/5/2020 | - | - | - | - | - |
| 4,760 | 186,021 | - | - |
2021 LTIP - Restricted Stock | 2/3/2021 | - | - | - | - | - |
| 10,560 | 412,685 | - | - |
2017 LTIP - Performance Stock Options | 2/9/2017 | 9,390 | - | - | 49.33 | 2/8/2027 |
| - | - | - | - |
2018 LTIP - Performance Stock Options | 2/8/2018 | 12,140 | - | - | 51.23 | 2/7/2028 |
| - | - | - | - |
2019 LTIP - Performance Stock Options | 2/6/2019 | 7,407 | 3,703 | - | 50.52 | 2/5/2029 |
| - | - | - | - |
2020 LTIP - Performance Stock Options | 2/5/2020 | - | - | 13,460 | 58.89 | 2/4/2030 |
| - | - | - | - |
2021 LTIP - Stock Options | 2/3/2021 | - | 9,080 | - | 39.78 | 2/2/2031 |
| - | - | - | - |
| 2022 PROXY STATEMENT | 43 |
(1) For purposes of this column, the grant date for the awards is the grant date or, if earlier, the service inception date determined under FASB ASC Topic 718. (2) The 2019 and 2020 LTIP Performance Stock Options vest as follows: 2019 LTIP: In equal installments on February 5, 2020 and February 1, 2021 and 2022. 2020 LTIP: Because there was a payout for 2021 under the Profit Sharing Program, 2/3 on February 9, 2022, and 1/3 on February 1, 2023. The 2021 LTIP Stock Options vest in equal installments on February 1, 2022, 2023 and 2024. (3) The exercise price of the stock options is the closing price of Delta common stock on the NYSE on the applicable grant date. (4) These shares of restricted stock vest as follows: 2019 LTIP : In equal installments on February 1, 2020, 2021 and 2022. 2019 Restricted Stock grant to Mr. Carter: In equal installments on December 4, 2020, 2021 and 2022. 2020 LTIP: In equal installments on February 1, 2021, 2022 and 2023. 2021 Restricted Stock grant to Mr. Bellemare. In equal installments on January 25, 2022, 2023 and 2024. 2021 LTIP: 1/2 on February 1, 2022 and 1/4 on February 1, 2023 and 2024. 2021 Restricted Stock grant to Mr. Janki: In equal installments on July 19, 2022, 2023 and 2024. Restricted stock is subject to forfeiture in certain circumstances. (5) In accordance with SEC rules, the amounts in this column for the market value of restricted stock are based on the $39.08 closing price of Delta common stock on the NYSE on December 31, 2021. (6) This table does not include the performance award component of the 2020 LTIP and 2019 LTIP because (i) these award opportunities are denominated in dollars and (ii) the payout, if any, earned by the named executive officers that are executive vice presidents or more senior officers on the payment date will be made in stock based on achievement of the pre-established performance measures during the measurement periods for each program. Any payouts to all other participants will be made in cash. |
| ir.delta.com | 2022 PROXY STATEMENT | 44 |
The following table provides information regarding the exercise of stock options and the vesting of stock for the named executive officers in 2018.2021.
Name | Option Awards |
| Stock Awards | Option Awards |
| Stock Awards | ||||
Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)(1) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(2) | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($) | Number of Shares Acquired on Vesting (#) | Value Realized on Vesting ($)(1) | |||
Edward H. Bastian | 60,000 | 1,146,612 |
| 187,068 | 9,816,340 | - | - |
| 172,119 | 7,096,488 |
Glen W. Hauenstein | - |
| 163,848 | 8,593,092 | - |
| 92,495 | 3,815,111 | ||
W. Gil West | - |
| 132,206 | 6,943,521 | ||||||
Paul A. Jacobson | 81,000 | 4,211,401 |
| 111,700 | 5,867,974 | |||||
Alain M. Bellemare | - |
| - | |||||||
Peter W. Carter | - |
| 82,313 | 4,258,404 | - |
| 45,206 | 1,853,898 | ||
(1) The value realized on exercise is based on the difference between the market price on the date of exercise and the exercise price of the options. (2) The value realized on vesting is based on the closing price of Delta common stock on the NYSE on the applicable vesting date. These amounts represent the vesting of award opportunities granted in 2015, 2016 and 2017. | ||||||||||
Daniel C. Janki | - |
| - | |||||||
William C. Carroll | - |
| 7,886 | 298,249 | ||||||
Garrett L. Chase | - |
| 7,333 | 277,334 | ||||||
(1) The value realized on vesting is based on the closing price of Delta common stock on the NYSE on the applicable vesting date. These amounts represent the vesting of award opportunities granted in 2018, 2019 and 2020. | (1) The value realized on vesting is based on the closing price of Delta common stock on the NYSE on the applicable vesting date. These amounts represent the vesting of award opportunities granted in 2018, 2019 and 2020. | |||||||||
2019 PROXY STATEMENT 45
Defined Benefit Pension Benefits
The Delta Retirement Plan (Retirement Plan) is a broad-based, non-contributory qualified defined benefit pension plan for Delta’s ground and flight attendant employees. To participate in the Retirement Plan, an employee must have completed 12 months of service before the plan was frozen on December 31, 2005. As a result, Mr. Bastian and Mr. Jacobson areis eligible to participate in the Retirement Plan, but Mr. Carter, Mr. Hauenstein and Mr. Westthe other named executive officers are not. We do not offer any supplemental executive retirement plans or deferred compensation plans to the named executive officers.
Eligible ground and flight attendant employees hired (or rehired) on or before July 1, 2003, receive Retirement Plan benefits based on a final average earnings (FAE) formula. Effective July 1, 2003, the Retirement Plan transitioned to a cash balance plan and benefits for ground and flight attendant employees hired (or rehired) after that date are generally based solely on the cash balance formula. Retirement Plan participants who were employed on July 1, 2003, receive Retirement Plan benefits based on the higher of the FAE and cash balance formulas.
Under the cash balance formula, 6% of a participant’s pay (base salary and, if any, eligible annual incentive compensation) was credited annually until January 1, 2006, to a hypothetical account, which account is credited with an annual interest credit based on a market rate of interest. Interest credits will continue to be credited annually regardless of the plan’s frozen status. At termination of employment, an amount equal to the balance of the participant’s cash balance account is payable to the participant, at his or her election, in the form of an immediate or deferred lump sum or equivalent monthly benefit.
Benefits under the FAE formula are based on a participant’s (1) final average earnings; (2) years of service prior to January 1, 2006; (3) age when benefit payments begin (but not before age 52); and (4) primary Social Security benefit. Final average earnings are the average of the participant’s highest average monthly earnings (base salary and, if any, eligible annual incentive compensation) for the 36 consecutive months in the 120-month period preceding the earlier of termination of employment and January 1, 2006. The monthly retirement benefit at the normal retirement age of 65 equals 60% of the participant’s final average earnings, reduced for years of service less than 30 (determined as of December 31, 2005) and by 50% of the participants’ primary Social Security benefit (also reduced for less than 30 years of service). Benefits determined under the FAE formula are paid in the form of a monthly annuity.
| 2022 PROXY STATEMENT | 45 |
The table below shows certain pension benefit information for Mr. Bastian and Mr. Jacobson as of December 31, 2018.2021.
Name | Plan Name | Number of Years of Credited Service (as of December 31, | Present Value of Accumulated Benefits ($)(2) | Payments During Last Fiscal Year |
Mr. Bastian(3) | Delta Retirement Plan | 6 years, 10 months | FAE Formula: Cash Balance Formula: |
|
|
|
|
| 0 |
(1) As discussed above, the Retirement Plan was frozen effective December 31, 2005, and no additional service credit will accrue after that date. All years of service reflected in this column include service until December 31, 2005. (2) Benefits were calculated using interest rate and mortality rate assumptions consistent with those used in our financial statements (see “Assumptions” in Note (3) Mr. Bastian resigned from Delta as of April 1, 2005, and rejoined Delta in July 2005. His years of credited service include the 6 years, 5 months of service he had completed as of April 1, 2005. As a result, the portion of his benefit calculated under the FAE formula was determined under the rules applicable to vested employees who terminate their service with Delta prior to early retirement age instead of under the rules applicable to retirees at early retirement age. Accordingly, Mr. Bastian’s benefit is smaller than it would have been had he retired at early retirement age. All benefits earned by Mr. Bastian after he rejoined Delta in July 2005 are based solely on the cash balance formula.
| ||||
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Potential Post-Employment Benefits upon Termination or Change in Control
This section describes the potential benefits the named executive officers may receive under certain termination of employment scenarios, including in connection with a change in control, assuming termination of employment on December 31, 2018.2021.
The definitions of “cause,” “change in control,” “disability,” “good reason” and “retirement,” as such terms are used in the following sections, are summarized below.
Officers and director level employees are generally eligible to participate in Delta’s Officer and Director Severance Plan (Severance Plan), which may be amended at any time by Delta. The following chart summarizes the principal benefits the named executive officers are eligible to receive under the Severance Plan.
Name | Termination Without Cause (no Change in Control)(1) | Resignation for Good Reason (no Change in Control)(1) | Termination without Cause or Resignation for Good Reason in Connection with a Change in Control(1)(2) |
Mr. Bastian | › 24 months base salary › 200% target MIP › 24 months healthcare benefit and Flight Benefits(3)continuation › outplacement services | › 24 months base salary › 200% target MIP › 24 months healthcare benefit and Flight Benefits continuation › outplacement services | › 24 months base salary › 200% target MIP › 24 months healthcare benefit and Flight Benefits continuation › outplacement services |
Mr. Hauenstein
| › 24 months base salary › 200% target MIP › 24 months healthcare benefit and Flight Benefits continuation › outplacement services | › None | › 24 months base salary › 200% target MIP › 24 months healthcare benefit and Flight Benefits continuation › outplacement services |
Mr. Bellemare, Mr. Carter and | › 18 months base salary › 150% target MIP › 18 months healthcare benefit and Flight Benefits continuation › outplacement services | › None | › 18 months base salary › 150% target MIP › 18 months healthcare benefit and Flight Benefits continuation › outplacement services |
Mr. Carroll and Mr. Chase | › 15 months base salary › 125% target MIP › 15 months healthcare benefit and Flight Benefits continuation › outplacement services | › None | › 15 months base salary › 125% target MIP › 15 months healthcare benefit and Flight Benefits continuation › outplacement services |
(1) The cash severance amount (base salary plus target MIP) is paid in a lump sum following termination of employment. Outplacement services fees are limited to $5,000. (2) These benefits apply if the termination of employment occurs during the two-year period after a change in control. (3) See footnote 6(d) to the Summary Compensation Table on page 39 for a description of Flight Benefits. | |||
| ir.delta.com | 2022 PROXY STATEMENT | 46 |
To receive benefits under the Severance Plan, participants must enter into a general release of claims against Delta and non-competition, non-solicitation, non-disparagement and confidentiality covenants for the benefit of Delta.
The Severance Plan does not provide for any excise tax gross-ups for benefits received in connection with a change in control. If a participant is entitled to benefits under the Severance Plan in connection with a change in control, the amount of such benefits will be reduced to the statutory safe harbor under Section 4999 of the Internal Revenue Code if this results in a greater after-tax benefit than if the participant paid the excise tax.
LONG-TERM INCENTIVE PROGRAMSLong-Term Incentive Programs
The following chart summarizes the treatment of performance awards, restricted stock and, performanceas applicable, stock options awarded under Delta’s long-term incentive programs (LTIP) for 2016, 20172019, 2020 and 20182021 and a restricted stock award provided to Mr. Bellemare, Mr. Carter and Mr. Janki under various termination of employment scenarios.
Termination Scenario |
| |
Termination without Cause or Resignation for Good Reason without a Change in Control and Retirement | Mr. Bastian, Mr. Hauenstein and Mr. | The named executive officer will remain eligible to receive his performance award, restricted stock award and |
Mr. Mr. | The named executive officer will receive a prorated performance award and, as applicable, a prorated | |
2019 PROXY STATEMENT 47
|
| |
Resignation without Good Reason | Mr. Bastian, Mr. Hauenstein and Mr. | The named executive officer will remain eligible to receive his performance award, restricted stock award and |
Mr. Mr. | The named executive officer’s performance award, restricted stock award and, as applicable, | |
Termination for Cause | The named executive officer’s performance award, restricted stock award and, as applicable, | |
TerminationduetoDeath orDisability | The named executive officer’s performance award, restricted stock award and, as applicable, | |
Termination without | The named executive officer’s performance award, restricted stock award and, as applicable, | |
(1)
In order for the named executive officer to be eligible for this treatment, his termination of employment must have occurred on or after (i) October 1, In consideration for this treatment, these named executive officers entered into award agreements containing enhanced non-competition and non-solicitation covenants for the benefit of Delta. In the event the executive breaches such covenants during the two-year period following employment, he will forfeit any outstanding awards. | ||
| 2022 PROXY STATEMENT | 47 |
ANNUAL INCENTIVE PLANBack to Contents
Delta’s 20182021 Management Incentive Plan (MIP) generally provides that a participant whose employment with Delta terminates prior to the end of the workday on December 31, 20182021 is not eligible for a 20182021 MIP payment. If, however, the participant’s employment is terminated (1) due to death or disability; (2) due to retirement; or (3) by Delta without cause or for any other reason that would entitle the participant to benefits under the Severance Plan, the participant is eligible for a pro rata 20182021 MIP payment based on (a) the number of monthsdays during 20182021 the participant was employed in a MIP-qualified position and (b) the terms and conditions of the 20182021 MIP that would have applied if his or her employment had continued through December 31, 2018.
2021.
TRIGGERING EVENTSTriggering Events
As noted above, eligibility for severance benefits and acceleration of the vesting of equity awards are triggered by certain events. The terms “cause,” “change in control,” “disability,” “good reason” and “retirement,” as they apply to the named executive officers, are summarized below.
Cause means, in general, a person’s (1) continued, substantial failure to perform his duties with Delta; (2) misconduct which is economically injurious to Delta; (3) conviction of, or plea of guilty or no contest to, a felony or other crime involving moral turpitude, fraud, theft, embezzlement or dishonesty; or (4) material violation of any material Delta policy or rule regarding conduct. A person has ten business days to cure, if curable, any of the events which could lead to a termination for cause. For executive vice presidents or more senior executives, a termination for cause must be approved by a 2/3 vote of the entire Board of Directors.
Change in control means, in general, the occurrence of any of the following events: (1) any person becomes the beneficial owner of more than 35% of Delta common stock; (2) during a period of 12 consecutive months, the Board of Directors at the beginning of the period and their approved successors cease to constitute a majority of the Board; (3) the consummation of a merger or consolidation involving Delta, other than a merger or consolidation which results in the Delta common stock outstanding immediately before the transaction continuing to represent more than 65% of the Delta common stock outstanding immediately after the transaction; or (4) a sale, lease or other transfer of Delta’s assets that have a total gross fair market value greater than 40% of the total gross fair market value of Delta’s assets immediately before the transaction.
Disability means long-term or permanent disability as determined under the applicable Delta disability plan.
Good reason means, in general, the occurrence of any of the following without a person’s written consent: (1) a material diminution of a person’s authorities, duties or responsibilities, other than an insubstantial and inadvertent act that is promptly remedied by Delta after written notice by the person; (2) the relocation of a person’s office by more than 50 miles; (3) a material reduction in a person’s base salary or target annual bonus opportunities, other than pursuant to a uniform percentage salary or target annual bonus reduction for similarly situated persons; or (4) a material breach by Delta of any material term of a person’s employment. An event constitutes good reason only if a person gives Delta certain written notice of his intent to resign and Delta does not cure the event within a specified period.
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Retirement means a termination of employment (1) at or after age 52 with ten years of service completed since a person’s most recent hire date or (2) on or after the date he or she has completed at least 25 years of service since his or her most recent hire date regardless of age. In addition, for purposes of the Retiree Flight Benefits described below, retirement also means (1) a termination of employment by Delta without cause or for any other reason that would entitle the person to benefits under the Severance Plan if the person is at least age 45 and has at least 10 years of service and such combined age and years of service equal 60 or more and (2) for Mr. Carter and Mr. Carroll only, a termination of employment at or after age 62 with five years of service completed since his most recent hire date.
RETIREE FLIGHT BENEFITSPost-Employment Flight Benefits
A named executive officer who retires from Delta at or after age 52 with at least ten yearsunder the definition of service or with at least 25 years of service regardless of age,retirement described above may continue to receive Flight Benefits (see footnote 7(d)6(d) to the Summary Compensation Table on page 4239 for a description of Flight Benefits including survivor travel benefits) during retirement, except the unused portion of the two annual allowances will not accumulate into succeeding years (Retiree Flight Benefits).
Notwithstanding the above, a person who is first elected an officer on or after June 8, 2009, will not receive reimbursement for taxes for Retiree Flight Benefits. Delta also does not provide reimbursement for taxes associated with travel by the surviving spouse or domestic partner of any officer.
In exchange for certain non-competition, non-solicitation, non-disparagement and confidentiality covenants for the benefit of Delta and a general release of claims against Delta, an officer who served in that capacity during the period beginning on the date Delta entered into the merger agreement with Northwest Airlines and ending on the date the merger occurred, or who joined Delta from Northwest on the date the merger occurred and who had been a Northwest officer on the date Delta entered into the merger agreement, will receive, on his termination of employment (other than by death or by Delta for cause), a vested right to Retiree Flight Benefits, regardless of the officer’s age and years of service at his termination of employment.
A named executive officer who (1) does not meet the definition of retirement and (2) becomes eligible for benefits under the Severance Plan will receive an allotment of 32 one-way positive-space flight passes after the expiration of the Flight Benefits provided under the Severance Plan. This allotment will continue until the fifth anniversary of the named executive officer's severance date or, if the officer has less than five years of service with Delta, the number of months the officer was employed with Delta.
| ir.delta.com | 2022 PROXY STATEMENT | 48 |
Table Regarding Potential Post-Employment Benefits upon Termination or Change in Control
The following table describes the termination benefits for each named executive officer, assuming termination of employment on December 31, 2018.2021. Also included is a columnrow that describes the benefits, if any, each named executive officer would have received in connection with a change in control (CIC). Further, because termination is deemed to occur at the end of the workday on December 31, 2018,2021, the named executive officer would have earned his 20182021 MIP award and, as applicable, the performance award under the 20162019 LTIP, to the extent otherwise payable. Accordingly, these awards are unrelated to the termination of employment.
We have not included in this section any benefit that is available generally to all employees on a non-discriminatory basis such as payment of retirement, disability and death benefits. See “Defined Benefit Pension Benefits” above,on page 45, for a discussion of the benefits accrued for eligible named executive officers under the Delta Retirement Plan. On December 31, 2018,2021, only Mr. Bastian, Mr. Hauenstein and Mr. WestCarroll (for purposes of Retiree Flight Benefits only) were eligible to retire under the definition of retirement described above. The other named executive officers are not eligible to retire under these requirements and, therefore, are not eligible for any retirement-related compensation or benefits.
2019 PROXY STATEMENT 49
Name | Termination Scenario | Severance Payment ($)(1) |
| Equity ($) |
| Other Benefits ($)(5) | Termination Scenario | Severance |
| Equity/Long-Term Non-Equity Incentive Awards ($) |
| Other | ||||
Performance Awards(2) | Performance Stock Options(3) | Restricted Stock(4) | Performance |
Stock | Restricted | |||||||||||
Mr. Bastian | Without Cause | 5,400,000 |
| 7,310,000 | 441,677 | 7,180,909 |
| 824,050 | Without Cause | 5,700,000 |
| 8,340,625 | - | 6,941,390 |
| 654,643 |
Resignation for Good Reason | 5,400,000 |
| 7,310,000 | 441,677 | 7,180,909 |
| 824,050 | Resignation for Good Reason | 5,700,000 |
| 8,340,625 | - | 6,941,390 |
| 654,643 | |
For Cause | 0 |
| 0 |
| 0 | For Cause | - |
| - |
| - | |||||
Resignation without Good Reason | 0 |
| 7,310,000 | 441,677 | 7,180,909 |
| 795,212 | Resignation without Good Reason | - |
| 8,340,625 | - | 6,941,390 |
| 622,300 | |
Retirement | 0 |
| 7,310,000 | 441,677 | 7,180,909 |
| 795,212 | Retirement | - |
| 8,340,625 | - | 6,941,390 |
| 622,300 | |
Death | 0 |
| 7,310,000 | 441,677 | 7,180,909 |
| 0 | Death | - |
| 8,340,625 | - | 6,941,390 |
| - | |
Disability | 0 |
| 7,310,000 | 441,677 | 7,180,909 |
| 795,212 | Disability | - |
| 8,340,625 | - | 6,941,390 |
| 622,300 | |
CIC – Termination without Cause/Resignation for Good Reason | 5,400,000 |
| 7,310,000 | 441,677 | 7,180,909 |
| 824,050 | CIC – Termination without Cause/Resignation for Good Reason | 5,700,000 |
| 8,340,625 | - | 6,941,390 |
| 654,643 | |
Mr. Hauenstein | Without Cause | 3,850,000 |
| 4,080,000 | 47,085 | 4,408,316 |
| 589,710 | Without Cause | 3,850,000 |
| 4,503,938 | - | 3,748,554 |
| 477,390 |
Resignation for Good Reason | 0 |
| 4,080,000 | 47,085 | 4,408,316 |
| 570,620 | Resignation for Good Reason | - |
| 4,503,938 | - | 3,748,554 |
| 456,325 | |
For Cause | 0 |
| 0 |
| 0 | For Cause | - |
| - |
| - | |||||
Resignation without Good Reason | 0 |
| 4,080,000 | 47,085 | 4,408,316 |
| 570,620 | Resignation without Good Reason | - |
| 4,503,938 |
| 3,748,554 |
| 456,325 | |
Retirement | 0 |
| 4,080,000 | 47,085 | 4,408,316 |
| 570,620 | Retirement | - |
| 4,503,938 | - | 3,748,554 |
| 456,325 | |
Death | 0 |
| 4,080,000 | 47,085 | 4,408,316 |
| 0 | Death | - |
| 4,503,938 | - | 3,748,554 |
| - | |
Disability | 0 |
| 4,080,000 | 47,085 | 4,408,316 |
| 570,620 | Disability | - |
| 4,503,938 |
| 3,748,554 |
| 456,325 | |
CIC – Termination without Cause/Resignation for Good Reason | 3,850,000 |
| 4,080,000 | 47,085 | 4,408,316 |
| 589,710 | CIC – Termination without Cause/Resignation for Good Reason | 3,850,000 |
| 4,503,938 |
| 3,748,554 |
| 477,390 | |
Mr. West | Without Cause | 3,850,000 |
| 4,035,000 | 31,213 | 4,144,494 |
| 227,667 | ||||||||
Resignation for Good Reason | 0 |
| 4,035,000 | 31,213 | 4,144,494 |
| 178,669 | |||||||||
For Cause | 0 |
| 0 |
| 0 | |||||||||||
Resignation without Good Reason | 0 |
| 4,035,000 | 31,213 | 4,144,494 |
| 178,669 | |||||||||
Retirement | 0 |
| 4,035,000 | 31,213 | 4,144,494 |
| 178,669 | |||||||||
Death | 0 |
| 4,035,000 | 31,213 | 4,144,494 |
| 4,080 | |||||||||
Disability | 0 |
| 4,035,000 | 31,213 | 4,144,494 |
| 178,669 | |||||||||
CIC – Termination without Cause/Resignation for Good Reason | 3,850,000 |
| 4,035,000 | 31,213 | 4,144,494 |
| 227,667 | |||||||||
Mr. Jacobson | Without Cause | 2,062,500 |
| 1,520,000 | 12,661 | 2,346,747 |
| 508,325 | ||||||||
Resignation for Good Reason | 0 |
| 1,520,000 | 12,661 | 2,346,747 |
| 470,643 | |||||||||
For Cause | 0 |
| 0 |
| 0 | |||||||||||
Resignation without Good Reason | 0 |
| 0 |
| 470,643 | |||||||||||
Death | 0 |
| 3,040,000 | 23,780 | 3,202,881 |
| 10,305 | |||||||||
Disability | 0 |
| 3,040,000 | 23,780 | 3,202,881 |
| 470,643 | |||||||||
CIC – Termination without Cause/Resignation for Good Reason | 2,062,500 |
| 3,040,000 | 23,780 | 3,202,881 |
| 508,325 | |||||||||
Mr. Bellemare | Without Cause | 2,437,500 |
| 548,625 | - | 2,904,227 |
| 61,110 | ||||||||
Resignation for Good Reason | - |
| 548,625 | - | 2,904,227 |
| - | |||||||||
For Cause | - |
| - |
| - | |||||||||||
Resignation without Good Reason | - |
| - |
| - | |||||||||||
Death | - |
| 1,645,875 | - | 4,650,129 |
| - | |||||||||
Disability | - |
| 1,645,875 | - | 4,650,129 |
| - | |||||||||
CIC – Termination without Cause/Resignation for Good Reason | 2,437,500 |
| 1,645,875 | - | 4,650,129 |
| 61,110 | |||||||||
Mr. Carter | Without Cause | 1,856,250 |
| 969,000 | 12,109 | 1,496,152 |
| 37,998 | Without Cause | 2,062,500 |
| 2,311,825 | - | 3,482,341 |
| 120,835 |
Resignation for Good Reason | 0 |
| 969,000 | 12,109 | 1,496,152 |
| 0 | Resignation for Good Reason | - |
| 2,311,825 | - | 3,482,341 |
| - | |
For Cause | 0 |
| 0 |
| 0 | For Cause | - |
| - |
| - | |||||
Resignation without Good Reason | 0 |
| 0 |
| 0 | Resignation without Good Reason | - |
| 2,311,825 | - | 3,482,341 |
| - | |||
Death | 0 |
| 1,938,000 | 15,162 | 2,041,858 |
| 0 | Death | - |
| 2,311,825 | - | 3,482,341 |
| - | |
Disability | 0 |
| 1,938,000 | 15,162 | 2,041,858 |
| 0 | Disability | - |
| 2,311,825 | - | 3,482,341 |
| - | |
CIC – Termination without Cause/Resignation for Good Reason | 1,856,250 |
| 1,938,000 | 15,162 | 2,041,858 |
| 37,998 | CIC – Termination without Cause/Resignation for Good Reason | 2,062,500 |
| 2,311,825 | - | 3,482,341 |
| 120,835 | |
(1) The severance payment, if applicable, represents the following for each named executive officer: (i) Mr. Bastian: 24 months of base salary and 200% of his MIP target award, which is 200% of his base salary; (ii) Mr. Hauenstein: 24 months of base salary and 200% of his MIP target award, which is 175% of his base salary; (iii) Mr. West: 24 months of base salary and 200% of his MIP target award, which is 175% of his base salary; (iv) Mr. Jacobson: 18 months of base salary and 150% of his MIP target award, which is 150% of his base salary; and (v) Mr. Carter: 18 months of base salary and 150% of his MIP target award, which is 125% of his base salary. (2) The value of the performance awards in the tables is based on payment at the target level. | ||||||||||||||||
| 49 |
Name | Termination Scenario | Severance |
| Equity/Long-Term Non-Equity Incentive Awards ($) |
| Other | ||
Performance |
Stock | Restricted | ||||||
Mr. Janki | Without Cause | 2,681,250 |
| 274,313 | 11,715 | 1,973,032 |
| 68,558 |
Resignation for Good Reason | - |
| 274,343 | 11,715 | 1,973,032 |
| - | |
For Cause | - |
| - | - | - |
| - | |
Resignation without Good Reason | - |
| - | - | - |
| - | |
Disability | - |
| 1,645,875 | 38,340 | 6,196,916 |
| - | |
Death | - |
| 1,645,875 | 38,340 | 6,196,916 |
| - | |
CIC – Termination without Cause/Resignation for Good Reason | 2,681,250 |
| 1,645,875 | 38,340 | 6,196,916 |
| 68,558 | |
Mr. Carroll | Without Cause | 1,068,750 |
| 424,625 | - | 521,875 |
| 326,381 |
Resignation for Good Reason | - |
| 424,625 | - | 521,875 |
| 326,381 | |
For Cause | - |
| - | - | - |
| - | |
Resignation without Good Reason | - |
| - | - | - |
| - | |
Retirement | - |
| - | - | - |
| 326,381 | |
Death | - |
| 843,875 | - | 707,074 |
| 52,850 | |
Disability | - |
| 843,875 | - | 707,074 |
| 326,381 | |
CIC – Termination without Cause/Resignation for Good Reason | 1,068,750 |
| 843,875 | - | 707,074 |
| 326,381 | |
Mr. Chase | Without Cause | 1,125,000 |
| 424,625 | - | 500,864 |
| 118,939 |
Resignation for Good Reason | - |
| 424,625 | - | 500,864 |
| - | |
For Cause | - |
| - | - | - |
| - | |
Resignation without Good Reason | - |
| - | - | - |
| - | |
Death | - |
| 843,875 | - | 685,463 |
| - | |
Disability | - |
| 843,875 | - | 685,463 |
| - | |
CIC – Termination without Cause/Resignation for Good Reason | 1,125,000 |
| 843,875 | - | 685,463 |
| 118,939 | |
(1) The severance payment, if applicable, represents the following for each named executive officer: (i) Mr. Bastian: 24 months of base salary and 200% of his MIP target award, which is 200% of his base salary; (ii) Mr. Hauenstein: 24 months of base salary and 200% of his MIP target award, which is 175% of his base salary; (iii) Mr. Bellemare: 18 months of base salary and 150% of his MIP target award, which is 150% of his base salary; (iv) Mr. Carter: 18 months of base salary and 150% of his MIP target award, which is 150% of his base salary; (v) Mr. Janki: 18 months of base salary and 150% of his MIP target award, which is 175% of his base salary; (vi) Mr. Carroll: 15 months of base salary and 125% of his MIP target award, which is 80% of his base salary; and (vi) Mr. Chase: 15 months of base salary and 125% of his MIP target award, which is 80% of his base salary. (2) The value of the performance awards (except with respect to the portion of the 2021 LTIP attributable to the 2021 performance period) in the tables is based on payment at the target level. As actual performance for the 2021 performance period under the 2021 LTIP was below the target level, the value of such portion of the 2021 LTIP is based on payment at 88.75% of the target level. (3) We used intrinsic value for the stock options. The exercise price for the unexercisable stock options outstanding on December 31, 2021 was (1) $50.52 for the options granted on February 6, 2019; (2) $58.89 for the options granted on February 5, 2020; (3) $39.78 for the options granted on February 3, 2021; and (4) $38.56 for the options granted on July 19, 2021. (4) As required by SEC rules, the values in these tables for restricted stock are based on the $39.08 closing price of Delta common stock on the NYSE on December 31, 2021. (5) Other benefits include company-paid healthcare coverage, outplacement services and, for Mr. Bastian, Mr. Hauenstein and Mr. Carroll only, Retiree Flight Benefits. The Retiree Flight Benefits reflected for each named executive officer were determined by using the following assumptions for each officer: (1) Flight Benefits continue for the life expectancy of the officer or the joint life expectancy of the officer and, as applicable, his spouse, measured using a mortality table that calculates the average life expectancy to be 27.1 years; (2) the level of usage of Retiree Flight Benefits for each year is the same as the officer’s and his spouse’s actual usage of Flight Benefits during 2021; (3) the incremental cost to Delta of Retiree Flight Benefits for each year is the same as the actual incremental cost incurred by Delta for the officer’s Flight Benefits in 2021; and (4) the value of Retiree Flight Benefits includes a tax gross up equal to 60% of the lesser of (i) the officer’s actual usage of Flight Benefits in 2021 and (ii) except for Mr. Carroll, the annual tax reimbursement allowance (as described in footnote 6(d) to the Summary Compensation Table) (surviving spouses do not receive reimbursement for taxes associated with Retiree Flight Benefits). On the basis of these assumptions, we determined the value of Retiree Flight Benefits for each named executive officer by calculating the present value of the benefit over the officer’s life expectancy (or joint life expectancy with his spouse) using a discount rate of 2.65%. | ||||||||
| 2022 PROXY STATEMENT | 50 |
Under rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, we are required to calculate and disclose the total compensation paid to our median employee as well as the ratio of the pay of our Chief Executive Officer to the median employee. Because of a change in the employment status of the median employee that we identified as of December 31, 2017 and the sale of our wholly-owned subsidiary DAL Global Services, LLC in December 2018, we identified a new median employee as of December 31, 2018, the last day of our fiscal year.
For 2018:2021:
the annual total compensation of the employee identified at median of all our employees other than our Chief Executive Officer was $81,355;$70,240;
the annual total compensation of our Chief Executive Officer, Ed Bastian, was $14,982,448;$12,360,420; and
the ratio of the annual total compensation of our Chief Executive Officer to the median of the total annual compensation of all our employees was estimated to be 184176 to 1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records, using the methodology described below. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported here, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
ToIn 2021, Delta hired approximately 11,000 new employees, representing over 13% of our workforce. As a result we concluded it was appropriate to identify a new median employee for purposes of presenting the 2021 CEO pay ratio.
In identifying the median of the annual total compensation of our employees, we used the following methodology and the material assumptions, adjustments, and estimates that we used were as follows:of December 31, 2021:
Because less than 5% of our employees reside in other countries, we excluded all 2,9922,255 of our international employees using the de minimis exemption permitted under SEC rules.(1)
After applying the de minimis exemption, we had 96,07292,767 U.S. employees. This includesemployees, including the employees of all of our subsidiaries and all part-time, seasonal temporary and ready reservetemporary employees.
To identify the median employee, we utilized information from Box 5 of Form W-2 as we believe this measure reflects the most comparable measure of compensation across our diverse workgroups.
In reviewing this information, weWe annualized the compensation of permanent employees on an unpaid leave of absence during 2021 and of permanent full-time and part-time employees who were hired in 20182021 and remained employed as of December 31, 2018.2021, as expressly permitted by SEC rules.
After identifying the median employee, we calculated the annual total compensation for our median employee usingbased on the rules used whenfor calculating our Chief Executive Officer’s compensation for purposes ofin the Summary Compensation Table, as required. The Summary Compensation Table calculation for both our Chief Executive Officer and our median employee included a change in pension value of $0 due to reduced valuation caused largely by an increase in interest and discount rates. Because the SEC'sSEC rules require us to include the value of certain benefits we provide in the Summary Compensation Table calculation, the compensation reported for the median employee is higher than the compensation reported in Box 5 of the employee’s W-2.
None of the members of the Personnel & Compensation Committee is a former or current officer or employee of Delta or has any interlocking relationships as set forth in applicable SEC rules.
The non U.S. countries and the number of employees in each of those countries is as follows: Argentina – 11;- 7; Aruba – 3; Australia – 5;3; Bahamas – 4;3; Belgium – 17;19; Belize – 1; Bermuda – 13;11; Brazil – 189;103; Canada – 358;297; Cayman Islands – 2; Chile – 35;25; China – 107;38; Colombia – 10;7; Costa Rica – 43; Czech Republic – 2; Denmark – 1;29; Dominican Republic – 18;10; Ecuador – 7;4; El Salvador – 10;9; France – 84;72; Germany – 42;35; Ghana – 3;2; Greece – 4; GrenadaGuatemala – 21; Honduras – 1; Guatemala – 29; Honduras – 6; Hong Kong – 4; Hungary –- 1; India – 3;–185; Ireland – 19;13; Israel – 4; Italy – 46;44; Jamaica – 7;6; Japan – 572;375; South Korea – 31;19; Mexico – 372; Netherlands Antilles303; Nicaragua – 1; Nicaragua – 19; Nigeria – 8;4; Panama – 10;5; Peru – 22;16; Philippines – 59;7 Portugal – 1; Puerto Rico – 108; Russia – 1; Senegal – 2; Singapore – 491;422; South Africa – 3; Spain – 36;34; St. Lucia – 2;1; St. Maarten - 1; Switzerland – 2;–1; The Netherlands – 80;48; Turks and Caicos – 1; UAE – 1; United Kingdom – 79; US Virgin Islands – 250
2019 PROXY STATEMENT 51
| 2022 PROXY STATEMENT | 51 |
Non-employee director compensation is approved by the Board of Directors, based on recommendations of the Corporate Governance Committee. AgainThe Board members received compensation in 2018,2021 at the Committee engaged outside compensation consultant Meridian Compensation Partners, LLC to assist the Committee in a competitive assessment of the compensation program for outside directors. Meridian reviewed our director compensation against the same 21 companies (including three airlines) in the peer group used for executive compensation purposes by our Personnel & Compensation Committee. Meridian recommended no increase over the levellevels set in 2017, for compensationwhich other than the voluntary waiver of the Board and the non-executive Chairman of the Board. The Board of Directors accepted the recommendation, and no changeretainers in Board compensation was made in 2018.2020, have not been adjusted since that time. The Performance Compensation Plan limits equity awards to non-employee directors to $1 million. Employee directors continuedcontinue to receive no additional pay for Board service.
Non-employee directors are eligible to receive the following for their service on the Board of Directors:
| |
Annual Board Retainer: | $100,000 (payable in quarterly installments) |
Annual Board/New Board Member Equity Grant: | $175,000 in restricted stock that vests at or shortly before the next annual meeting of shareholders, subject to the director’s continued service on the Board of Directors on the vesting date. Dividends, to the extent approved, accrue on these awards and are paid upon vesting of the restricted stock. |
Annual Committee Chair Cash Retainer: | $20,000, except $25,000 for Audit Committee |
Annual Non-executive Chairman of the | $130,000 in restricted stock with the same vesting schedule as the annual Board equity grant. |
Expense Reimbursements: | Reimbursement of reasonable expenses incurred in attending meetings. |
|
|
As is common in the airline industry, Delta provides complimentary travel and certain Delta Sky Club® privileges for members of the Board of Directors; the director’s spouse, domestic partner or designated companion; the director’s children and parents; and, to a limited extent, other persons designated by the director (Director Flight Benefits). Complimentary travel for such other persons is limited to an aggregate imputed value of $20,000 per year. Delta reimburses the director for associated taxes on complimentary travel with an imputed tax value of up to $25,000 per year. Unused portions of the annual allowances described in the previous two sentences accumulate and may be carried into succeeding years during Board service. Mr. Hazleton is not eligible to receive flight benefits other than those he receives as a Delta employee.
Complimentary travel is provided to an eligible director’s surviving spouse or domestic partner after the eligible director’s death. Delta will not reimburse the surviving spouse or domestic partner for associated taxes on complimentary travel under the survivor travel benefit.
A director who retires from the Board at or after age 52 with at least ten years of service as a director, at or after age 68 with at least five years of service as a director, or at his or her mandatory retirement date, may continue to receive Director Flight Benefits during retirement, except the unused portion of the annual allowances does not accumulate into succeeding years (Retired Director Flight Benefits). A and the director who served on the Board of Directors during the period beginning on the date Delta entered into the merger agreement with Northwest and ending on the date the merger occurred, or who joined the Board at the closing of the merger on October 29, 2008, will not receive at the completion of his or her Board service (other than due to death or removal by shareholdersreimbursement for cause), a vested right to receivetaxes for Retired Director Flight Benefits, regardless of the director’s age and years of service when his or her Board service ends.Benefits. A director is not eligible to receive Retired Director Flight Benefits if the director engages in certain wrongful acts.
Notwithstanding the above, a person who is first elected to the Board of Directors on or after June 8, 2009, will not receive reimbursement for taxes for Retired Director Flight Benefits. Directors and retired directors may also purchase private jet flights from a Delta subsidiary by paying the incremental cost of the flights. Mr. Ralph and Mr. Hazleton are not eligible to receive flight benefits other than those received as Delta employees.
| ir.delta.com |
| 52 |
The following table sets forth the compensation paid to non-employee members of Delta’s Board of Directors for 2018.2021.
Name(1) | Fees Earned or Paid in Cash ($) | Stock Awards(2) ($) | Option Awards ($) | Non-Equity Incentive Plan Compensation ($) | Nonqualified Deferred Compensation Earnings ($) | All Other Compensation(3) ($) |
| Total ($) | Fees | Stock | Option | Non-Equity | Nonqualified | All Other |
| Total ($) |
Francis S. Blake | 120,000 | 305,000 | 0 | 34,307 |
| 459,307 | 120,000 | 305,000 | 0 | 546 |
| 425,546 | ||||
Daniel A. Carp | 120,000 | 175,000 | 0 | 10,788 |
| 305,788 | ||||||||||
Ashton B. Carter | 100,000 | 175,000 | 0 | 12,632 |
| 287,632 | 100,000 | 175,000 | 0 | 3,295 |
| 278,295 | ||||
David G. DeWalt | 110,000 | 175,000 | 0 | 15,341 |
| 300,341 | 120,000 | 175,000 | 0 | 7,779 |
| 302,779 | ||||
William H. Easter III | 125,000 | 175,000 | 0 | 1,062 |
| 301,062 | 125,000 | 175,000 | 0 | 133 |
| 300,133 | ||||
Mickey P. Foret | 60,000 | -0- | 0 | 35,695 |
| 95,695 | ||||||||||
Michael P. Huerta | 75,000 | 350,000 | 0 | 4,278 |
| 429,278 | 100,000 | 175,000 | 0 | 4,310 |
| 279,310 | ||||
Jeanne P. Jackson | 100,000 | 175,000 | 0 | 20,282 |
| 295,282 | 100,000 | 175,000 | 0 | 33,579 |
| 308,579 | ||||
George N. Mattson | 120,000 | 175,000 | 0 | 129,392 |
| 424,392 | 120,000 | 175,000 | 0 | 42,350 |
| 337,350 | ||||
Sergio A. L. Rial | 100,000 | 175,000 | 0 | 1,193 |
| 276,193 | 120,000 | 175,000 | 0 |
| 295,000 | |||||
David S. Taylor | 100,000 | 175,000 | 0 | 8,780 |
| 283,780 | ||||||||||
Kathy N. Waller | 100,000 | 175,000 | 0 | 5,388 |
| 280,388 | 100,000 | 175,000 | 0 | 1,428 |
| 276,428 | ||||
(1) As Delta employees, Mr. Bastian, and Mr. Ralph were not separately compensated for their service on the Board of Directors in 2018. Mr. Bastian’s compensation is included in the Summary Compensation Table on page 41. Mr. Ralph’s compensation is described in “Proposal 1 — Election of Directors” on page 14. (2) On June 29, 2018, the Board of Directors granted 3,520 shares of restricted stock to each non-employee director at that date. This award vests on June 20, 2019, subject to continued Board service on that date. Mr. Blake received an additional grant of 2,610 shares as compensation for service as non-executive Chairman of the Board, subject to vesting on the same schedule as described above. Mr. Huerta was elected to the Board in April 2018 and received a grant of 3,160 shares of restricted stock in connection with joining the Board. Mr. Foret retired at the 2018 Annual Meeting of Shareholders. The “Stock Awards” column shows the fair value of the restricted stock granted to each non-employee director in 2018 as determined under FASB ASC Topic 718, based on date of the grant. (3) The amounts in this column for each non-employee director represent reimbursement of taxes associated with Director Flight Benefits. The amount for Mr. Blake represents the incremental cost of Director Flight Benefits of $11,060 and reimbursement of taxes associated with this benefit of $23,247. The amount for Mr. Foret represents the incremental cost of $7,022 for Director Flight Benefits and $10,509 in reimbursement under a benefit plan he had with Northwest Airlines, which Delta is required to honor as a result of its merger with Northwest. It also includes for Mr. Foret $18,164 in reimbursement of taxes associated with Director Flight Benefits and the benefit plan. The amount for Mr. Mattson includes $15,801 in reimbursement of taxes associated with Director Flight Benefits, $13,591 in Director Flights Benefits and $100,000 in annual compensation for acting on Delta’s behalf as director of Air France-KLM Group. No other non-employee director received perquisites or other personal benefits with a total incremental cost of $10,000 or more, the threshold for reporting under SEC rules. From time to time, directors attend events sponsored by Delta at no incremental cost to Delta. | ||||||||||||||||
(1) As Delta employees, Mr. Bastian and Mr. Hazleton were not separately compensated for their service on the Board of Directors in 2021. Mr. Bastian’s compensation is included in the Summary Compensation Table on page 38. Mr. Hazleton’s compensation is described in “Proposal 1 — Election of Directors” on page 54. (2) On June 17, 2021, the Board of Directors granted 3,930 shares of restricted stock to each non-employee director at that date. This award vests on June 17, 2022, subject to continued Board service on that date. Mr. Blake received an additional grant of 2,920 shares as compensation for service as non-executive Chairman of the Board, subject to vesting on the same schedule as described above. The “Stock Awards” column shows the fair value of the restricted stock granted to each non-employee director in 2021 as determined under FASB ASC Topic 718, based on date of the grant. (3) The amounts in this column for each non-employee director represent reimbursement of taxes associated with Director Flight Benefits. The amount for Ms. Jackson also includes the incremental cost of Director Flight Benefits of $12,987. The amount for Mr. Mattson also includes the incremental cost of Director Flight Benefits of $7,491 and $25,000 in compensation for acting on Delta’s behalf as director of Air France-KLM Group through February 2021. No other non-employee director received perquisites or other personal benefits with a total incremental cost of $10,000 or more, the threshold for reporting under SEC rules. From time to time, directors attend events sponsored by Delta at no incremental cost to Delta. | (1) As Delta employees, Mr. Bastian and Mr. Hazleton were not separately compensated for their service on the Board of Directors in 2021. Mr. Bastian’s compensation is included in the Summary Compensation Table on page 38. Mr. Hazleton’s compensation is described in “Proposal 1 — Election of Directors” on page 54. (2) On June 17, 2021, the Board of Directors granted 3,930 shares of restricted stock to each non-employee director at that date. This award vests on June 17, 2022, subject to continued Board service on that date. Mr. Blake received an additional grant of 2,920 shares as compensation for service as non-executive Chairman of the Board, subject to vesting on the same schedule as described above. The “Stock Awards” column shows the fair value of the restricted stock granted to each non-employee director in 2021 as determined under FASB ASC Topic 718, based on date of the grant. (3) The amounts in this column for each non-employee director represent reimbursement of taxes associated with Director Flight Benefits. The amount for Ms. Jackson also includes the incremental cost of Director Flight Benefits of $12,987. The amount for Mr. Mattson also includes the incremental cost of Director Flight Benefits of $7,491 and $25,000 in compensation for acting on Delta’s behalf as director of Air France-KLM Group through February 2021. No other non-employee director received perquisites or other personal benefits with a total incremental cost of $10,000 or more, the threshold for reporting under SEC rules. From time to time, directors attend events sponsored by Delta at no incremental cost to Delta. | |||||||||||||||
The non-employee director stock ownership guidelines require each non-employee director to own shares of Delta common stock equal to or greater than (1) shares with a value of five times the annual Board cash retainer paid to the director or (2) 35,000 shares. Non-employee directors must achieve this ownership level within five years after initial election to the Board. For this purpose, stock ownership includes restricted stock and restricted stock units; shares owned directly or by a spouse or dependent children; shares held in trust by or for the director or an immediate family member who resides in the same household as the director (an immediate family member); or shares owned by an entity wholly-owned by the director or an immediate family member. It does not include shares a director has the right to acquire through the exercise of stock options.
In addition, each non-employee director must hold at least 50% of all “net shares” received through restricted stock vesting or realized through stock option exercises until the stock ownership guidelines are achieved. For this purpose, “net shares” means all shares retained after any applicable withholding of any shares for tax purposes.
As of December 31, 2018,2021, all non-employee directors exceeded the required stock ownership level except twolevel.
The non-employee directors are also subject to the company's prohibition against the hedging and pledging of Delta securities as described in the “Compensation Discussion and Analysis” section of the proxy statement under “Executive Compensation Policies — Anti-Hedging and Anti Pledging Policy” on page 36.
| 2022 PROXY STATEMENT | 53 |
 | WHAT AM I VOTING ON? |
We are seeking your support for the election of 14 director nominees whom the Board, acting on the recommendation of the Corporate Governance Committee, has nominated to serve on the Board of Directors for a one-year term.
All Delta directors are elected annually. At the annual meeting, each director will be elected by the vote of whom was first elected in 2017 or 2018.a majority of the votes cast. This means the number of votes cast “for” a director must exceed 50% of the votes cast with respect to that director (excluding abstentions). Each director has five years fromwho is elected will hold office until the datenext annual meeting of shareholders and the election and qualification of his or her successor, or until such director's earlier death, disqualification, resignation or removal. See pages 68 to 70 for more information about voting at the annual meeting.
Delta’s Bylaws provide that any director not receiving a majority of the votes cast at the annual meeting must offer to tender his or her resignation to the Board of Directors. The Corporate Governance Committee will make a recommendation to the Board of Directors whether to accept the resignation. The Board will consider the recommendation and publicly disclose its decision within 90 days after the certification of the election results.
After considering the recommendations of the Corporate Governance Committee, the Board set the number of directors to continue at 14 as of the date of the annual meeting and nominated all current directors to stand for re-election.
The Board believes that each of the nominees is qualified to serve as a director and will be able to stand for election. If not, the Board may name a substitute nominee or reduce the number of directors. If a substitute is named, the proxies will vote for the substitute nominee. In addition to the specific skills and experience for each independent director nominee listed in the chart on the following pages, qualifications of each nominee that were considered by the Board follow each nominee’s biographical description on the following pages.
Delta, the Air Line Pilots Association, International (ALPA), the collective bargaining representative for Delta pilots, and the Delta Master Executive Council, the governing body of the Delta unit of ALPA (Delta MEC), have an agreement whereby Delta agrees (1) to cause the election to achieve the required ownership levelBoard of Directors of a Delta pilot designated by the Delta MEC who is not a member or officer of the Delta MEC or an officer of ALPA (Pilot Nominee); (2) at any meeting of shareholders at which the Pilot Nominee is subject to election, to re-nominate the Pilot Nominee or nominate another qualified Delta pilot designated by the Delta MEC to be elected to the Board of Directors and to use its reasonable best efforts to cause such person to be elected to the Board; and (3) in the event of the Pilot Nominee’s death, disability, resignation, removal or failure to be elected, to elect promptly to the Board a replacement Pilot Nominee designated by the Delta MEC to fill the resulting vacancy.
Pursuant to this provision, the Delta MEC has designated Christopher A. Hazleton to be nominated for election to the Board at the annual meeting.
The compensation of Mr. Hazleton as a Delta pilot is determined under the non-employeecollective bargaining agreement between Delta and ALPA. During 2021, Mr. Hazleton received $391,296 in compensation (which includes: $336,374 in flight earnings, $950 in shared rewards/profit sharing payments and $53,972 in Delta contributions related to a defined contribution plan). As a Delta pilot representative on the Board, Mr. Hazleton is not separately compensated for his service as a director.
| ir.delta.com | 2022 PROXY STATEMENT | 54 |
The following chart shows the specific skills and experiences the Board currently believes are important for independent nominees collectively to possess for effective governance of Delta in the current business environment. The matrix also provides a high level summary of the important skills and experiences of our independent nominees to the Board, which contribute to the sound governance of Delta. It is not an exhaustive list of each nominee's contributions to the Board. The Board is committed to having a membership that reflects diversity, including with respect to gender, race and ethnicity. This commitment is illustrated by the fact that the Board currently includes five directors who are racially or ethnically diverse and three female directors.
The Board believes that the combination of backgrounds, skills and experiences of the nominees produces a Board that is well-equipped to exercise oversight responsibilities on behalf of our shareholders and other stakeholders. In addition to the chart above, we provide information on the following pages about each nominee for director, stock ownership guidelines.including certain experiences that led the Board to conclude the nominee should serve as a director of Delta.
| 2022 PROXY STATEMENT | 55 |
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES: |
| EDWARD H. BASTIAN | ||
 Age: 64 Joined Delta’s Board: | BIOGRAPHY: Mr. Bastian has been the Chief Executive Officer of Delta since May 2016. He served as the President of Delta from 2007 to May 2016. Mr. Bastian was also Chief Financial Officer of Delta from 2007 to 2008; Executive Vice President and Chief Financial Officer of Delta from 2005 to 2007; Chief Financial Officer of Acuity Brands from June 2005 to July 2005; Senior Vice President — Finance and Controller of Delta from 2000 to 2005 and Vice President and Controller of Delta from 1998 to 2000. QUALIFICATIONS: Mr. Bastian has over twenty years of experience as a Delta officer, including serving as Delta’s Chief Executive Officer, President and Chief Financial Officer. Mr. Bastian’s accounting and finance background also provides financial and strategic expertise to the Board of Directors. PUBLIC DIRECTORSHIPS: Grupo Aeroméxico, S.A.B. de C.V. (2012 - 2022) AFFILIATIONS: Member, Board of Trustees of The Woodruff Arts Center | |
| FRANCIS S. BLAKE | ||
 Age: 72 Joined Delta’s Board: Committees: | BIOGRAPHY: Mr. Blake is the non-executive Chairman of Delta’s Board of Directors and previously served as the lead director of Delta’s Board from May 2016 to October 2016. He served as the Chairman and Chief Executive Officer of The Home Depot from 2007 until November 2014, and thereafter as Chairman of the Board of Directors until his retirement in February 2015. He previously served as Vice Chairman of the Board of Directors of The Home Depot and as Executive Vice President. Mr. Blake joined The Home Depot in 2002 as Executive Vice President — Business Development and Corporate Operations. He was previously the deputy secretary for the U.S. Department of Energy and served in a variety of executive positions at General Electric Company, including as Senior Vice President, Corporate Business Development in charge of all worldwide mergers, acquisitions and dispositions. QUALIFICATIONS: Mr. Blake has extensive experience as the Chairman and Chief Executive Officer of a complex retail organization and prior leadership positions in business and government. He has also served on boards of directors of public companies in the energy industry. At other public companies, Mr. Blake has experience as a member of the audit, compensation and governance committees. PUBLIC DIRECTORSHIPS: Macy’s, Inc. The Procter & Gamble Company (2015 - 2021) AFFILIATIONS: Member, Board of Georgia Aquarium Member, Board of Agnes Scott College Member, Board of Curators of the Georgia Historical Society | |
| ASHTON B. CARTER | ||
 Age: 67 Joined Delta’s Board: Committees: | BIOGRAPHY: Secretary Carter is Director of the Belfer Center for Science and International Affairs at Harvard University’s John F. Kennedy School of Government and an Innovation Fellow at MIT. Secretary Carter served as U.S. Secretary of Defense from 2015 to 2017. He served as Senior Executive at the Markle Foundation and as a Distinguished Visiting Fellow at Stanford University from 2014 to 2015. In prior service in the Department of Defense, Secretary Carter served as Deputy Secretary of Defense from 2011 to 2013, functioning as the department’s chief operating officer, and as Undersecretary of Defense of Acquisition, Technology and Logistics from 2009 to 2011. Secretary Carter served as the Chair of the International and Global Affairs Faculty and Professor of Science and International Affairs at Harvard’s Kennedy School from 2000 to 2009. QUALIFICATIONS: Secretary Carter has substantial experience in government and security matters, having served directly and indirectly under 11 Secretaries of Defense in both Democratic and Republican administrations. As Secretary of Defense, Secretary Carter managed a complex and diverse organization. PUBLIC DIRECTORSHIPS General Electric Company AFFILIATIONS: Board Member, Council on Foreign Relations Fellow, American Academy of Arts and Sciences | |
| ir.delta.com | 2022 PROXY STATEMENT | 56 |
| GREG CREED | ||
 Age: 64 Joined Delta’s Board: Committees: Audit; Personnel & Compensation | BIOGRAPHY: Mr. Creed served as Chief Executive Officer of Yum! Brands, Inc., a global operator of quick service restaurants, from January 2015 until his retirement in December 2019. He also served as a member of the Board of Directors of Yum! Brands from November 2014 to May 2020. Mr. Creed served as Chief Executive Officer of Taco Bell Division from January 2011 to December 2014 and as President and Chief Concept Officer of Taco Bell U.S. from December 2006 to December 2010 after holding various other positions of increasing responsibility with the company since 1994. Mr. Creed is the founder of Creed UnCo, a consulting business focused on culture and leadership, brand building and franchising. He also currently serves as advisor to the Chief Executive Officer and Board of Directors of Thanx Inc. QUALIFICATIONS: Mr. Creed has extensive experience in marketing and operations as a former senior executive at a leading operator of quick service restaurants operating globally. Additionally, Mr. Creed has experience as a member of the boards of directors of other public companies where he serves on the human resources and finance committees. Mr. Creed was recommended to the Board’s Corporate Governance Committee as a new director by another director. PUBLIC DIRECTORSHIPS: Whirlpool Corporation Aramark Corporation Sow Good Inc. (2020 - 2022) Yum! Brands, Inc. (2014 - 2020) AFFILIATIONS: Director, Girls Inc. of Orange County Director, Aging Mind Foundation Member, American Society of Corporate Executives (ASCE) | |
| DAVID G. DEWALT | ||
 Age: 58 Joined Delta’s Board: Committees: Safety & Security | BIOGRAPHY: Mr. DeWalt is the Founder and Managing Director of NightDragon Security and Managing Director of AllegisCyber Capital. Mr. DeWalt is also the Chairman of NightDragon Acquisition Corp, a special purpose acquisition company formed for the purpose of completing a business combination in the cybersecurity, safety, security and privacy sector. Mr. DeWalt previously served as the Executive Chairman of FireEye, Inc., a global network cybersecurity company. He served as FireEye’s Chief Executive Officer from November 2012 to June 2016 and Chairman of the Board from June 2012 to January 2017. Mr. DeWalt was President and Chief Executive Officer of McAfee, Inc., a security technology company, from 2007 until 2011 when McAfee, Inc. was acquired by Intel Corporation. From 2003 to 2007, Mr. DeWalt held executive positions with EMC Corporation, a provider of information infrastructure technology and solutions, including serving as Executive Vice President and President-Customer Operations and Content Management Software. QUALIFICATIONS: Mr. DeWalt has substantial expertise in the information technology security industry and has strategic and operational experience as the former Chief Executive Officer of FireEye, Inc. and McAfee, Inc. Mr. DeWalt has served on the audit, compensation and governance committees of the boards of other public companies. PUBLIC DIRECTORSHIPS: NightDragon Acquisition Corp Five9, Inc. ForgeRock Inc. FireEye, Inc. (2012 – 2017) Forescout Technologies, Inc. (2015 – 2020) AFFILIATIONS: Member, National Security Telecommunications Advisory Committee | |
| 2022 PROXY STATEMENT | 57 |
| WILLIAM H. EASTER III | ||
 Age: 72 Joined Delta’s Board: Committees: | BIOGRAPHY: Mr. Easter was Chairman, President and Chief Executive Officer of DCP Midstream, LLC (formerly Duke Energy Field Services, LLC) from 2004 until his retirement in 2008. Previously employed by ConocoPhillips for 32 years, Mr. Easter served as Vice President of State Government Affairs from 2002 to 2004 and as General Manager of the Gulf Coast Refining, Marketing and Transportation Business Unit from 1998 to 2002. QUALIFICATIONS: Mr. Easter has over 36 years of leadership and operational experience in natural gas, crude oil and refined product supply, transportation, refining and marketing with ConocoPhillips and DCP Midstream, LLC. Additionally, Mr. Easter has experience as a member of the boards of directors of other public companies where he served on the audit, corporate governance, compensation and finance committees. Since his retirement from DCP Midstream, LLC, Mr. Easter has been involved in private investments. PUBLIC DIRECTORSHIPS: Emerson Electric Co. Grupo Aeroméxico, S.A.B. de C.V. (2017 - 2022) Concho Resources, Inc. (2008 - 2021) Baker Hughes, Inc. (2014 - 2017) AFFILIATIONS: Chairman, Board of Memorial Hermann Health System, Houston, Texas | |
| LESLIE D. HALE | ||
 Age: 50 Joined Delta’s Board: April 21, 2022 Committees: Finance; Safety & Security | BIOGRAPHY: Ms. Hale has been President and Chief Executive Officer of RLJ Lodging Trust, a publicly-traded lodging real estate investment trust, since August 2018. She previously served as Chief Operating Officer, Chief Financial Officer and Executive Vice President of RLJ Lodging Trust from 2016 to 2018, and Chief Financial Officer, Executive Vice President and Treasurer from 2011 to 2016. Ms. Hale served as Chief Financial Officer and Senior Vice President of Real Estate and Finance of RLJ Development from 2007 until the formation of RLJ Lodging Trust in 2011 and Vice President (and previously Director) of Real Estate and Finance for RLJ Development from 2005 to 2007. From 2002 to 2005, she held various positions of increasing responsibility within the global financial services divisions of General Electric Company. QUALIFICATIONS: Ms. Hale has substantial leadership experience as a senior executive in the lodging real estate industry, with skills in real estate, corporate finance, mergers and acquisitions, capital markets, strategic planning and other public company matters. Ms. Hale also has experience as a member of the boards of directors of public companies where she has served on the audit and finance committees. Ms. Hale was recommended to the Board’s Corporate Governance Committee as a new director by another director. PUBLIC DIRECTORSHIPS: Macy’s Inc. RLJ Lodging Trust AFFILIATIONS: Member, Board of Trustees of Howard University Director, Federal Reserve Bank of Richmond (Baltimore Branch) | |
| CHRISTOPHER A. HAZLETON | ||
 Age: 54 Joined Delta’s Board: June 20, 2019 Committee: Safety & Security | BIOGRAPHY: Mr. Hazleton is a Delta pilot and currently a Captain flying the Airbus 321 aircraft. Mr. Hazleton was a Northwest Airlines pilot from 1999 until he became a Delta pilot upon Northwest’s merger with Delta. He was nominated by the Delta MEC as the Pilot Nominee. He also previously served as the Chairman of the Delta MEC Strategic Planning Committee. QUALIFICATIONS: As a pilot designated by the Delta MEC to serve on the Board of Directors, Mr. Hazleton provides a unique perspective into the operations of the airline industry and related labor relations matters. AFFILIATIONS: Member, Board of the Delta Pilots Charitable Fund | |
| ir.delta.com | 2022 PROXY STATEMENT | 58 |
| MICHAEL P. HUERTA | ||
 Age: 65 Joined Delta’s Board: Committees: | BIOGRAPHY: Mr. Huerta currently serves as a transportation industry consultant, including acting as a Senior Advisor to Macquarie Capital. Mr. Huerta completed a five-year term as Administrator of the Federal Aviation Administration (FAA) in January 2018. Before being named as Administrator, Mr. Huerta served as Acting Administrator of the FAA from 2011 to 2013 and FAA Deputy Administrator from 2010 to 2011. Mr. Huerta served as Executive Vice President and Group President of the Transportation Solutions Group at Affiliated Computer Services, Inc. (now Conduent) from 2008 to 2009 and Senior Vice President and Managing Director, Transportation Solutions of ACS Government Solutions from 2002 to 2008. QUALIFICATIONS: As head of the FAA, Mr. Huerta led a complex organization responsible for the safety and efficiency of civil aviation in the U.S. Throughout his career, he has held key transportation industry roles in both the public and private sectors. PUBLIC DIRECTORSHIPS: Verra Mobility Corporation AFFILIATIONS: Fellow of the Royal Aeronautical Society Member, Board of Managers of Park City Ski & Snowboard | |
2019 PROXY STATEMENT 53
| JEANNE P. JACKSON | ||
 Age: 70 Joined Delta’s Board: Committees: | BIOGRAPHY: Ms. Jackson retired as senior strategic advisor to the chief executive officer of NIKE, Inc. effective August 2017. She served as NIKE’s President, Product and Merchandising from July 2013 until April 2016 and President, Direct to Consumer from 2009 until July 2013. Ms. Jackson joined the NIKE Executive team in 2009 after serving on its Board of Directors for eight years. She founded and served as the Chief Executive Officer of MSP Capital, a private investment company from 2002 to 2009, and has resumed the role since retiring from NIKE. Ms. Jackson served as Chief Executive Officer of Walmart.com, a private e-commerce enterprise, from 2000 to 2002. Ms. Jackson previously served in various leadership positions in many organizations, including the Gap Inc., Banana Republic, Victoria’s Secret, Saks Fifth Avenue and Federated Department Stores, Inc., all clothing retailers, and Walt Disney Attractions, Inc., the theme parks and vacation resorts division of The Walt Disney Company. QUALIFICATIONS: Ms. Jackson has extensive experience as a senior executive for several major consumer retailers, with expertise in consumer product and direct to consumer marketing. She has also served on boards of directors of public companies in the consumer product industry where she has served on audit, compensation, corporate governance and finance committees. PUBLIC DIRECTORSHIPS: Monster Beverage Corporation The Kraft Heinz Company (2015 - 2020) McDonald’s Corporation (1999 - 2019) AFFILIATIONS: Member, Foundation Board of Trustees of U.S. Ski & Snowboard Association | |
| 2022 PROXY STATEMENT | 59 |
| GEORGE N. MATTSON | ||
 Age: 56 Joined Delta’s Board: Committees: Finance (Chair); | BIOGRAPHY: Mr. Mattson is a private investor in public and private companies and was the co-founder and co-Chairman of NextGen Acquisition Corp. and NextGen Acquisition Corp. II, both special purpose acquisition companies, prior to their mergers in 2021 with Xos, Inc. and Virgin Orbit Holdings, respectively. Mr. Mattson previously served as a partner and co-head of the Global Industrials Group in Investment Banking at Goldman, Sachs & Co. from 2002 to 2012, during which time his responsibilities included leading the Transportation and Airline practices. Mr. Mattson held various other positions at Goldman, Sachs & Co. from 1994 to 2002, prior to which he held various sales and marketing positions at IBM Corp. from 1987 to 1993. QUALIFICATIONS: Mr. Mattson has experience in strategy, shareholder value creation, mergers and acquisitions, corporate finance, and capital markets. In addition, Mr. Mattson has knowledge of the airline industry and other global industries from his 18 years at Goldman, Sachs & Co. and his 10 years as a private investor in public and private companies. Mr. Mattson has also served on the boards of other public companies, including in the aerospace and airline industries. At other public companies, Mr. Mattson has experience as chairman, lead independent director, and chair of the audit and governance committees, in addition to as a member of the audit, compensation and governance committees. PUBLIC DIRECTORSHIPS: Virgin Galactic Holdings, Inc. Virgin Orbit Holdings Xos, Inc. NextGen Acquisition Corp. (2020 - 2021) NextGen Acquisition Corp. II (2021) Air France-KLM Group (2017 - 2021) AFFILIATIONS: Former Chairman, and Emeritus Member of the Board of Visitors of the Engineering School of Duke University Board of Trustees, Saint Andrew’s School Operating Partner, Star Mountain Capital Executive Partner, Comvest Partners | |
| SERGIO A. L. RIAL | ||
 Age: 61 Joined Delta’s Board: Committees: | BIOGRAPHY: Mr. Rial is Non-Executive Chairman of the Board of Banco Santander (Brasil), a subsidiary of Banco Santander. He also serves as Vice Chairman of the Board of BRF S.A., a global food processing company based in Brazil. He previously served as the Chief Executive Officer and Vice-Chairman of the Board of Banco Santander (Brasil) from 2016 to 2021, and as Chairman of the Board from February 2015 until January 2016. From 2012 to February 2015, Mr. Rial was Chief Executive Officer of Marfrig Global Foods, one of the world’s largest meat companies with operations in Brazil and 15 other countries. Prior to joining Marfrig in 2012, Mr. Rial served in various leadership capacities with Cargill, Inc., a Minneapolis-based global provider of food, agriculture, financial and industrial products and services. At Cargill, Mr. Rial served as Chief Financial Officer from 2009 to 2011 and Executive Vice President from 2011 to 2012. He was also a member of Cargill’s board of directors from 2010 to 2012. From 2002 to 2004, Mr. Rial was a senior managing director and co-head of the Investment Banking Division at Bear Stearns & Co. in New York after serving at ABN AMRO Bank for 18 years. QUALIFICATIONS: Mr. Rial has extensive managerial and board-level experience at global businesses, particularly in the key market of Latin America, and has substantial financial experience as a former chief financial officer of a global corporation. He has also served on boards of directors of public companies in the food and agricultural industry. PUBLIC DIRECTORSHIPS: Banco Santander Brasil S.A. and Banco Santander S.A. BRF S.A. AFFILIATIONS: Member, Co-Chair of the Latin America Conservation Council (The Nature Conservancy) | |
| ir.delta.com | 2022 PROXY STATEMENT | 60 |
| DAVID S. TAYLOR | ||
 Age: 64 Joined Delta’s Board: August 7, 2019 Committees: Finance; Safety & | BIOGRAPHY: Mr. Taylor is Executive Chairman of the Board of Directors of The Procter & Gamble Company. He previously served as President and Chief Executive Officer of Procter & Gamble from 2015 to November 2021 and as Chairman of the Board from 2016 to November 2021. Mr. Taylor joined Procter & Gamble in 1980 and, since that time, has held numerous positions of increasing responsibility in North America, Europe and Asia, including serving as Group President-Global Beauty, Grooming & Healthcare, Group President-Global Health & Grooming, Group President-Global Home Care and President-Global Family Care. Mr. Taylor also serves as the Chairperson of The Alliance to End Plastic Waste, an initiative to advance solutions to eliminate unmanaged plastic waste in the environment. QUALIFICATIONS: Mr. Taylor has extensive leadership experience, including as the executive chairman of the Board and former chief executive officer of Procter & Gamble, and extensive experience in a complex global business particularly in the key market of Europe. As part of this experience, Mr. Taylor has developed expertise in marketing, innovation and consumer trends. Mr. Taylor also served on the board of directors of a global automotive systems supplier, giving him additional insight into complex global operations. PUBLIC DIRECTORSHIPS: The Procter & Gamble Company AFFILIATIONS: Member, Board of US-China Business Council Member, Board of Catalyst | |
| KATHY N. WALLER | ||
 Age: 63 Joined Delta’s Board: Committees: | BIOGRAPHY: Ms. Waller is the Executive Director of the Atlanta Committee for Progress. Ms. Waller has served as an executive coach for The ExCo Group (f/k/a Merryck & Co.) since 2019. From 2014 until her retirement in March 2019, Ms. Waller served as Executive Vice President and Chief Financial Officer of The Coca-Cola Company. From May 1, 2017 until her retirement, Ms. Waller assumed expanded responsibility for Coca-Cola’s strategic governance areas when she was also appointed to serve as President, Enabling Services. Ms. Waller joined Coca-Cola in 1987 as a senior accountant and assumed roles of increasing responsibility during her career, including Vice President, Finance and Controller. QUALIFICATIONS: Ms. Waller has extensive financial experience with a global business enterprise, including her role as Chief Financial Officer. Ms. Waller’s accounting and finance background provides financial and strategic expertise to the Board of Directors. PUBLIC DIRECTORSHIPS: Beyond Meat, Inc. CGI Inc. Cadence Bancorporation Monster Beverage Corporation (2015 - 2019) Coca-Cola FEMSA S.A.B. de C.V. (2015 - 2017) AFFILIATIONS: Member, Advisory Committee for Bain Consulting Member, Board of Trustees of Spelman College Member, Board of Trustees of University of Rochester Member, Governing Board of Woodruff Arts Center | |
| 2022 PROXY STATEMENT | 61 |
| WHAT AM I VOTING ON? |
As required by SEC rules, we are seeking your support for the compensation of our named executive officers.
Shareholders have the opportunity to approve, on an advisory, nonbinding basis, the compensation of the named executive officers, as disclosed in this proxy statement. This is commonly referred to as a “say on pay” advisory vote. We hold our say on pay advisory vote every year. The Board of Directors recommends that you vote “FOR” this proposal.
As discussed in greater detail in the “Compensation Discussion and Analysis” section of this proxy statement, the compensation of the named executive officers in 2021 reflects the following principles of our executive compensation program:
Links pay with performance by placing a substantial majority of total compensation at risk.
For 2021, at-risk compensation constituted 94% of the targeted compensation for the Chief Executive Officer and 90% for the other named executive officers.
Utilizes stretch performance measures that provide incentives to deliver value to our shareholders and align the interests of management with frontline employees and shareholders.
Many of the same performance measures are used in both our executive and broad-based employee compensation programs.
Provides compensation opportunities that assist in motivating and retaining existing talent and attracting new talent as needed.
This vote is advisory in nature, which means that it is not binding on Delta, its Board of Directors or the Personnel & Compensation Committee. However, the Personnel & Compensation Committee intends to give careful consideration to the vote results and is committed to taking any actions it deems necessary and appropriate in light of those results.
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL. |
| ir.delta.com | 2022 PROXY STATEMENT | 62 |
| WHAT AM I VOTING ON? |
We are asking you to vote on a proposal to ratify the appointment of a firm of independent auditors to serve as Delta’s independent auditors. The Audit Committee of the Board of Directors has appointed Ernst & Young LLP (EY) as Delta’s independent auditors for 2022, subject to ratification by our shareholders.
Representatives of EY, which also served as Delta’s independent auditors for 2021, are expected to be present at the annual meeting, will have an opportunity to make a statement if they desire and will be available to respond to questions. EY has served as our independent auditors since 2006. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the external independent auditors. The Audit Committee has ultimate responsibility for audit fee negotiations associated with the work of EY.
In determining whether to reappoint EY as Delta’s independent auditors for 2022, subject to shareholder ratification, the Audit Committee took into consideration a number of factors. These factors include the length of time the firm has been engaged by Delta; EY’s familiarity with Delta’s operations and industry, accounting policies, financial reporting process, and internal control over financial reporting; its skills, expertise and independence; the quality of the Audit Committee’s ongoing discussions with EY; a review of external data related to EY’s legal risks and proceedings, audit quality and recent public portions of PCAOB reports; an assessment of the professional qualifications of EY, the performance of the lead engagement partner and the other professionals on the Delta account; the reasonableness of EY’s fees for the services provided to Delta; management’s relationship with EY and its assessment of EY’s performance; the Audit Committee’s views on the performance of EY in light of the foregoing matters and the Audit Committee’s belief that continuing to retain EY is in the best interest of Delta and its shareholders. The Audit Committee periodically considers whether there should be a change in the independent auditors. When the lead engagement partner of the independent auditors is required to rotate off the Delta engagement, the Audit Committee and its Chair are directly involved in selecting a new lead engagement partner.
Delta’s Certificate of Incorporation and Bylaws do not require that shareholders ratify the selection of EY as the independent auditors. We are submitting the selection of the independent auditors for shareholder ratification (as we have done in prior years) because we believe it is a matter of good corporate governance. If shareholders do not ratify the selection of EY, the Audit Committee will reconsider the selection of the independent auditors.
| THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL. |
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The following table shows the aggregate fees and related expenses for professional services rendered by Delta’s independent auditors for 2021 and 2020.
Description of Fees | Amount 2021($) | Amount 2020($) |
Audit Fees(1) | 4,073,000 | 5,718,000 |
Audit-Related Fees(2) | 699,000 | 452,000 |
Tax Fees(3) | 365,000 | 647,000 |
All Other Fees(4) | 7,000 | 8,000 |
(1) Represents fees for the audit and quarterly reviews of the consolidated financial statements (including an audit of the effectiveness of internal control over financial reporting); assistance with and review of documents filed with the SEC; and accounting and financial reporting consultations and research work necessary to comply with generally accepted auditing standards. (2) Represents fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include an audit of subsidiaries and accounting consultations related to proposed transactions. (3) Represents fees for professional services provided for the review of tax returns prepared by the company; assistance with domestic and international tax compliance; and assistance related to the tax impact of proposed and completed transactions. (4) Represents fees for online technical resources. | ||
The charter of the Audit Committee provides that the Committee is responsible for the pre-approval of all audit and permitted non-audit services to be performed for Delta by the independent auditors. The Audit Committee has adopted a policy for the pre-approval of all services provided by the independent auditors.
Each year management requests Audit Committee pre-approval of the annual audits, statutory audits, quarterly reviews and any other engagements of the independent auditors known at that time. In connection with these requests, the Audit Committee may consider information about each engagement, including the budgeted fees; the reasons management is requesting the services to be provided by the independent auditors; and any potential impact on the auditors’ independence. As additional proposed audit and non-audit engagements of the independent auditors are identified, or if pre-approved services exceed the pre-approved budgeted amount for those services, the Audit Committee will consider similar information in connection with the pre-approval of such engagements or services. If Audit Committee pre-approvals are required between regularly scheduled Committee meetings, the Audit Committee has delegated to the Chair of the Audit Committee, or an alternate member of the Audit Committee, the authority to grant pre-approvals. Pre-approvals by the Chair or the alternate member are reviewed with the Audit Committee at its next regularly scheduled meeting.
| ir.delta.com | 2022 PROXY STATEMENT | 64 |
The Audit Committee presently consists of sixfive independent directors and represents and assists the Board of Directors in a number of duties. These duties include oversight of the following, among other matters: the integrity of Delta’s financial statements, including a review of significant accounting policies and estimates; compliance with legal and certain regulatory requirements; cybersecurity and risks associated with the security and operations of the information technology systems; the performance of the internal audit function; and the financial reporting process. In addition, the Committee appoints, oversees and reviews the performance of the independent auditors, who report directly to the Committee. The Committee has the resources and authority it deems appropriate to discharge its responsibilities. The Committee operates pursuant to a written charter, which lists specific duties and responsibilities, and is available at https://ir.delta.com/governance/.
The Board of Directors has determined that each of Mr. Easter, Mr. Blake, Mr. DeWalt, and Ms. Waller has the necessary experience to qualify as an “audit committee financial expert” under SEC rules, has agreed to be designated, and has so designated each of them. All Committee members are considered financially literate as defined by the NYSE, but none is an auditor or an accountant for Delta or performs accounting field work, and none is employed by Delta. In accordance with the SEC’s safe harbor relating to audit committee financial experts, a person designated as an audit committee financial expert will not be deemed an “expert” for purposes of the federal securities laws. In addition, this designation does not impose on a person any duties, obligations or liabilities that are greater than those otherwise imposed on the person as a member of the Audit Committee and Board of Directors, and does not affect the duties, obligations or liabilities of the Board of Directors.
Management is responsible for Delta’s system of internal control over financial reporting, the preparation of its consolidated financial statements in accordance with accounting principles generally accepted in the United States (GAAP), and the financial reporting process, including management’s assessment of internal control over financial reporting. The independent auditors, Ernst & Young LLP (EY), are responsible for performing an independent audit of our consolidated financial statements and for expressing an opinion, based on the results of their audit, as to whether the consolidated financial statements are fairly presented, in all material respects, in conformity with GAAP.
It is not the responsibility of the Audit Committee to prepare consolidated financial statements nor is it to determine that the consolidated financial statements and disclosures are complete and accurate and prepared in accordance with GAAP and applicable rules and regulations. These tasks are the responsibility of management. It is also not the responsibility of the Audit Committee to plan or conduct an independent audit of the consolidated financial statements. These tasks are the responsibility of the independent auditors. In carrying out its oversight responsibilities, the Audit Committee is not providing any expert, professional or special assurance as to the consolidated financial statements or any professional certification. The Audit Committee relies on the information provided by and representations made to it by management, and also on the report on our consolidated financial statements that it receives from the independent auditors.
In discharging its duties, the Audit Committee reviewed and discussed with management and the independent auditors the overall scope and process for the audit of the consolidated financial statements and internal control over financial reporting. The Committee discussed with the independent auditors the matters required to be discussed by Auditing Standard No. 1301 (Communications with Audit Committees) issued byapplicable requirements of the Public Company Accounting Oversight Board (PCAOB). In addition, the committee received from the independent auditors the written disclosures and the letter required by applicable PCAOB requirements regarding the independent auditors’ communications with the Audit Committee concerning independence, and discussed with the independent auditors their independence from Delta and its management. The committee also determined that the independent auditors’ provision of non-audit services in 20182021 to Delta was compatible with the auditors’ independence.
The Audit Committee met in private sessions as required by its charter with representatives of EY and members of Delta’s management, including the Chief Executive Officer, the Chief Financial Officer, the Controller the Chiefand Principal Accounting Officer, the Chief Legal Officer, the Chief Compliance Officer and the Vice President-Corporate Audit.head of the Corporate Audit and Enterprise Risk Management department. The Audit Committee and other attendees discussed and reviewed the following, among other matters: Delta SEC filings; information technology and cybersecurity matters; the scope, resources and work of the internalcorporate audit function; the financial reporting process; new accounting standards; the consolidated financial statements and related notes; the scope and progress of testing of Delta’s internal control over financial reporting; management’s assessment of the effectiveness of Delta’s internal control over financial reporting; enterprise risk management (ERM); legal and regulatory matters; accounting standards; accounting and controls related to specific company functions and strategic investments, subsidiaries and accounts;investments; critical audit matters; and tax matters.
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In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors that the audited consolidated financial statements and management’s assessment of the effectiveness of Delta’s internal control over financial reporting be included in Delta’s 20182021 Form 10-K filed with the SEC. The Audit Committee also appointed EY as Delta’s independent auditors for 2019,2022, subject to shareholder ratification.
THE AUDIT COMMITTEE
William H. Easter III, ChairFrancis S. Blake
Ashton B. Carter
David G. DeWalt
Michael P. Huerta
Kathy N. Waller
2019 PROXY STATEMENT 55
PROPOSAL 2 — ADVISORY VOTE ON EXECUTIVE COMPENSATION
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We are seeking your support for compensation of our named executive officers.
Shareholders have the opportunity to approve, on an advisory, nonbinding basis, the compensation of the named executive officers, as disclosed in this proxy statement. This is commonly referred to as a “say on pay” advisory vote. The Board of Directors recommends that you vote “FOR” this proposal.
As discussed in greater detail in the “Compensation Discussion and Analysis” section of this proxy statement, the compensation paid to the named executive officers reflects the following principles of our executive compensation program:
Links pay with performance by placing a substantial majority of total compensation at risk.
For 2018, at-risk compensation constituted 94% of the targeted compensation for the Chief Executive Officer and 89% for the other named executive officers.
Utilizes stretch performance measures that provide incentives to deliver value to our shareholders.
The payout opportunities for named executive officers under our annual and long-term incentive plans depend on Delta’s financial, operational and customer service performance as well as the value of our common stock.
Closely aligns the interests of management with frontline employees and shareholders.
Many of the same performance measures are used in both our executive and broad-based employee compensation programs.
Provides compensation opportunities that assist in motivating and retaining existing talent and attracting new talent as needed.
This vote is advisory in nature, which means that it is not binding on Delta, its Board of Directors or the Personnel & Compensation Committee. However, the Personnel & Compensation Committee intends to give careful consideration to the vote results and is committed to take any actions it deems necessary and appropriate in light of those results.
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PROPOSAL 3 — RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS
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We are asking you to vote on a proposal to ratify the appointment of a firm of independent auditors to serve as Delta’s independent auditors until the next annual meeting. The Audit Committee of the Board of Directors has appointed Ernst & Young LLP (EY) as Delta’s independent auditors for 2019, subject to ratification by the shareholders.
Representatives of EY, which also served as Delta’s independent auditors for 2018, are expected to be present at the annual meeting, will have an opportunity to make a statement if they desire and will be available to respond to questions. EY has served as our independent auditors since 2006. The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the external independent auditors. The Audit Committee has ultimate responsibility for audit fee negotiations associated with the work of EY.
In determining whether to reappoint EY as Delta’s independent auditors for 2019, subject to shareholder ratification, the Audit Committee took into consideration a number of factors. These factors include the length of time the firm has been engaged by Delta; EY’s familiarity with Delta’s operations and industry, accounting policies, financial reporting process, and internal control over financial reporting; its skills, expertise and independence; the quality of the Audit Committee’s ongoing discussions with EY; a review of external data related to EY’s legal risks and proceedings, audit quality and recent public portions of PCAOB reports; an assessment of the professional qualifications of EY, the performance of the lead engagement partner and the other professionals on the Delta account; the reasonableness of EY’s fees for the services provided to Delta; management’s relationship with EY and its assessment of EY’s performance; the Audit Committee’s views on the performance of EY in light of the foregoing matters and the Audit Committee’s belief that continuing to retain EY is in the best interest of Delta and its shareholders. The Audit Committee periodically considers whether there should be a change in the independent auditors. When the lead engagement partner of the independent auditors is required to rotate off the Delta engagement, the Audit Committee and its Chair are directly involved in selecting a new lead engagement partner.
Delta’s Certificate of Incorporation and Bylaws do not require that shareholders ratify the selection of EY as the independent auditors. We are submitting the selection of the independent auditors for shareholder ratification (as we have done in prior years) because we believe it is a matter of good corporate governance. If shareholders do not ratify the selection of EY, the Audit Committee will reconsider the selection of the independent auditors.
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2019 PROXY STATEMENT 57
The following table shows the aggregate fees and related expenses for professional services rendered by Delta’s independent auditors for 2018 and 2017.
Description of Fees | Amount 2018 ($) | Amount 2017 ($) |
Audit Fees(1) | 4,650,000 | 4,561,000 |
Audit-Related Fees(2) | 607,000 | 1,062,000 |
Tax Fees(3) | 648,000 | 1,048,000 |
All Other Fees(4) | 8,000 | 2,000 |
(1) Represents fees for the audit and quarterly reviews of the consolidated financial statements (including an audit of the effectiveness of internal control over financial reporting); attestation services required by statute or regulation; assistance with and review of documents filed with the SEC; and accounting and financial reporting consultations and research work necessary to comply with generally accepted auditing standards. (2) Represents fees for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” These services include an audit of subsidiaries, employee benefit plan audits and accounting consultations related to proposed transactions. (3) Represents fees for professional services provided for the review of tax returns prepared by the company; assistance with domestic and international tax compliance; and assistance related to the tax impact of proposed and completed transactions. (4) Represents fees for online technical resources. | ||
Pre-Approval of Audit and Non-Audit Services
The charter of the Audit Committee provides that the Committee is responsible for the pre-approval of all audit and permitted non-audit services to be performed for Delta by the independent auditors. The Audit Committee has adopted a policy for the pre-approval of all services provided by the independent auditors.
Each year management requests Audit Committee pre-approval of the annual audits, statutory audits, quarterly reviews and any other engagements of the independent auditors known at that time. In connection with these requests, the Audit Committee may consider information about each engagement, including the budgeted fees; the reasons management is requesting the services to be provided by the independent auditors; and any potential impact on the auditors’ independence. As additional proposed audit and non-audit engagements of the independent auditors are identified, or if pre-approved services exceed the pre-approved budgeted amount for those services, the Audit Committee will consider similar information in connection with the pre-approval of such engagements or services. If Audit Committee pre-approvals are required between regularly scheduled Committee meetings, the Audit Committee has delegated to the Chair of the Audit Committee, or an alternate member of the Audit Committee, the authority to grant pre-approvals. Pre-approvals by the Chair or the alternate member are reviewed with the Audit Committee at its next regularly scheduled meeting.
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| WHAT AM I VOTING ON? |
A shareholder has submitted a proposal requesting the ability for shareholders to act by written consent.a report on Delta’s lobbying policies, practices and oversight. TheBoardrecommendsthatyouvoteAGAINSTthisproposal.
SHAREHOLDER PROPOSALShareholder Proposal
Mr. John Chevedden, who holds 100 shares of common stock, has submitted the following proposal, and supporting statement and graphic, for which we take no responsibility, and has given notice that he intends to present the proposal at the annual meeting. We will promptly provide Mr. Chevedden’s address upon a shareholder’s oral or written request to Delta’s Corporate Secretary at Law Department, Delta Air Lines, Inc., Department 981, P.O. Box 20574, Atlanta, Georgia, 30320.
Proposal 4 - Shareholder RightTransparency in Lobbying
Whereas, I believe in full disclosure of Delta’s direct and indirect lobbying activities and expenditures to Actassess whether its lobbying is consistent with its expressed goals and in shareholders’ best interests.
Resolved, shareholders request the preparation of a report, updated annually, disclosing:
Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
Payments by Written ConsentDelta used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
Description of management’s and the Board’s decision-making process and oversight for making payments described in section 2 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Delta is a member.
Shareholders requestBoth “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the local, state and federal levels.
The report shall be presented to the Corporate Governance Committee and posted on Delta’s website.
Delta fails to provide an annual report specifying its lobbying payments by federal, individual states and social welfare groups (SWGs), as requested. Delta spent $33,833,554 from 2010-2020 on federal lobbying. This does not include state lobbying, where Delta also lobbies but disclosure is uneven or absent. For example, Delta spent $388,106 on lobbying in New York from 2019 and 2020.
Companies can give unlimited amounts to third party groups that our board of directors undertake such steps asspend millions on lobbying and undisclosed grassroots activity. These groups may be necessaryspending “at least double what’s publicly reported.”(1) Delta has third party lobbying disclosure gaps, failing to permit written consent by shareholders entitleddisclose its payments to casttrade associations and SWGs or the minimum numberamounts of votes that would be necessaryits payments to authorizeSWGs used for lobbying, including grassroots, and leaving out memberships in trade associations like the action at a meeting atGeorgia Chamber of Commerce.(2) Delta serves on the boards of Airlines for America and the Chamber of Commerce and belongs to the Business Roundtable (BRT) and International Air Transport Association, which all shareholders entitledaltogether spent $207,814,400 on federal lobbying for 2019 and 2020.
Delta’s lack of lobbying disclosure presents reputational risks when its lobbying contradicts company public positions or takes controversial positions. Delta is committed to vote thereon were presentprotect worker health and voting. This written consent issafety, yet its CEO lobbied to be consistent with applicable lawcut COVID quarantine time for employees.(3) Delta’s lobbying against limiting baggage and consistent with giving shareholdersticket change fees has attracted scrutiny.(4) While Delta believes in addressing climate change, the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any valid topic for written consent.
This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67%-support at both AllstateChamber and Sprint. This 67%-support wouldBRT have been higher if all shareholders had access to independent proxy voting advice. Hundredslobbied against passage of major companies enable shareholder action by written consent.
Taking action by written consent in place of a meeting is a means shareholders can use to raise important matters outsidelandmark climate legislation.(5) And Delta has spoken out against state voter restrictions, yet the normal annual meeting cycle.Chamber lobbied against the For the People Act.(6)
Please vote yes:
ShareholderRightProposal 4 - Transparency in Lobbying
https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publicly-reported/
https://www.nytimes.com/2021/03/15/us/voting-rights-advocates-filibuster.html
https://www.npr.org/202l/12/29/1068731487/delta-ceo-asks-cdc-to-cut-quarantine
https://www.inc.com/bill-murphy-jr/american-airlines-united-delta-made-billions-selling-1-simple-thing-passengers-truly-hate-a-key-victory-in-washington-made-it-all-possible.html
https://www.commondreams.org/news/2021/10/01/companies-vowing-climate-action-also-back-lobby-groups-trying-kill-landmark-climate
https://thehill.com/business-a-lobbying/business-a-lobbying/ 554430-watchdog-group-launches-campaign-to-pressure
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Back toActbyWrittenConsent-Proposal4
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STATEMENT INStatement in OPPOSITION
The Board of Directors strongly supports the principles that the Board should be accountable to all shareholders and that shareholders should be able to raise important matters. The current governance practices and policieshas considered this proposal in light of our Board achieve these principles in many ways, including through shareholders’ ability to call special meetings, “proxy access” rights and our shareholder engagement program. As a result, the proposal is unnecessary given Delta’s current governance practicesdisclosure and isbelieves that this proposal does not inserve the best interests of Delta nor its shareholders and therefore recommends a vote AGAINST it.
Delta already provides significant disclosure regarding its political and lobbying activities.
Delta is committed to transparently disclosing its political and lobbying activities above and beyond what federal, state and local laws require. Our 2021 Political Contributions & Activity Report(1) reflects our shareholders as a whole.
CommitmenttoStrongandEvolvingGovernancePractices. The Board regularly reviews our corporate governance practices and adjusts as necessarycommitment to maintain leading governance practices. Our governance program includes the following leading practices:transparency by describing:
Annual election of all directors;Delta’s policies and processes for political contributions, including Board oversight;
Majority votingactivity of the DeltaPAC, a non-partisan political action committee that provides an opportunity for directorseligible employees to participate in uncontested elections;the political process;
Independent chairmanoversight of state and separation of chairmanlocal political contributions and CEO roles;links to information we provide to states;
Proxy accesslistings of contributions for director candidates nominated by eligible shareholders;
Holders of 20% of outstanding common stock have the ability to call special meetings of shareholders;
No shareholder rights plans or super-majority voting;
Robust annual self-evaluation of the Board and Board committees;
Ongoing Board refreshment and succession planning;
Meaningful stock ownership and retention guidelines;last four years; and
Additional avenuesadvocacy activities, including lobbying activities, participation in trade and industry associations, and grassroots activities.
As a result of our extensive disclosure in our 2020 report, which was further enhanced in the 2021 report, Delta was ranked among the First Tier of S&P 500 companies for political transparency and accountability in 2021 by the Center for Political Accountability (CPA) Zicklin Index of Corporate Political Accountability and Disclosure. The CPA-Zicklin Index benchmarks the political disclosure and accountability policies and practices of leading U.S. public companies.
At the direction of Delta’s Board and in direct response to a proposal that received shareholder input, includingsupport at Delta’s 2021 annual meeting, Delta also released its Climate Lobbying Report in 2022.(2) The Climate Lobbying Report, which meaningfully enhances Delta’s disclosure regarding lobbying activities in this area, provides:
Delta’s governance of environmental sustainability;
Ability to suggest director nominees to the Corporate Governance Committee;an overview of our climate goals;
Ability to communicate directly with the non-management directors;a description of our climate policy principles; and
Regular shareholder engagement.the climate lobbying activities in which Delta has engaged both directly and indirectly through trade associations in 2021, which were informed by our goals and principles.
2019 PROXY STATEMENT 59
As an example of the Board’s regular review ofwhich Delta is subject as described in our governance practices, the Board approved an amendment2021 Political Contributions & Activity Report. We include links to Delta’s Bylawsreports we file in February 2019 to reduce the percentage of voting powercompliance with federal and state requirements in our Political Contributions & Activity Report. Any lobbying firms we hire are also required to call a special meeting offile similar reports, and the trade associations we belong to are subject to public disclosure obligations regarding their lobbying efforts.
Delta’s Investor Relations website – ir.delta.com – and public policy website – deltatakingaction.com – provide additional resources for shareholders from 40%who wish to 20%.learn more about Delta’s engagement in advocacy activities.
ShareholdersHavetheAbilitytoRaiseMattersandActOutsidetheAnnualMeetingCycle. In additionDelta has procedures in place to the abilitypromote transparency and accountability, and to present matters at annual meetings, the right of shareholders’ to call a special meeting, along with Delta’s established shareholder communication and engagement practices, provides shareholders with meaningful opportunities to raise important matters and, if necessary, pursue actions for shareholder consideration outside the annual meeting process. The reduced threshold of 20% of the outstanding shares needed to call a special meeting provides shareholders with a meaningful ability to call a special meeting.effectively oversee its participation in lobbying activities.
As described in detail in our Political Contributions & Activity Reports, we have appropriate oversight procedures in place to oversee our lobbying activities. Management of our advocacy activities is the summary sectionresponsibility of this proxy statement, wethe Executive Vice President, Chief Legal Officer in conjunction with the Senior Vice President – Government Affairs, and the Vice President – State Government Affairs. Delta’s Leadership Committee and the Board’s Corporate Governance Committee (which includes several members with experience in government affairs) receive annual reports on advocacy activity and priorities. Management regularly engageconsults with our investorsoutside counsel to learnensure Delta’s advocacy activities comply with applicable laws. In addition to controls in place at the management level, employees engaged in lobbying activity receive regular training on lobbying and understand their views. Through direct and regular presentations, conversation with shareholders and active monitoring of communications from shareholders,ethics regulations.
The Board of Directors believes that Delta should be an effective participant in the political process, including through lobbying activities and participation in trade and industry associations. Our business is subject to extensive regulations in the United States and abroad, which have a significant impact on our executive compensation programs, ESGbusiness. As a leader in the aviation industry, our participation in advocacy activities allows us to advocate for our policy positions, share our business expertise and sustainability matters,be part of public education efforts regarding issues facing our industry and strategythe business community. We participate in trade and risk management.
These rightsindustry associations that may support our public advocacy efforts and practices provide meaningful, year-round opportunities forare also a member of various chambers of commerce at the state and local level. While we do not always agree with the views of these groups, we are fully committed to engaging in the collaborative problem-solving process and to working with our industry peers in these political frameworks. We believe that engagement in advocacy activities is essential to Delta’s success and is in the best interest of Delta’s shareholders.
Delta’s existing disclosure provides shareholders to bring matters to the attention of company management,with ample information regarding Delta’s lobbying activities. Accordingly, the Board and other shareholders.
OurCurrentPracticesareEfficientandProtectallShareholders. The transparency ofbelieves that the annual and special meeting process offers important protections and advantages for shareholders that are absent fromreport requested in the written consent process. Shareholder meetings and votes take place transparently on a specified date and with a specified agenda that is publicly announced well in advance, giving all interested shareholders an opportunity to consider proposed actions and express their views. Accurate and complete information about proposed actions is widely distributed in a proxy statement before the meeting, which promotes a well-informed consideration on the merits of the proposed actions. Shareholder meetings provide shareholders with a forum for discussion and consideration of the proposed action. In addition, the Board is able to analyze and provide a recommendation with respect to actions proposed to be taken at a shareholder meeting.
In contrast, adoption of this written consent proposal would make it possible for the holders of a simple majority of outstanding shares of Delta’s common stockrequire company time and resources while providing only minimal additional information to take significant corporate action without any prior notice to the company, and without giving all shareholders an opportunity to consider, deliberate, and vote on shareholder actions that may have important ramifications for both Delta and all shareholders. The proposed written consent process would effectively disenfranchise all shareholders who do not have (or are not given) the opportunity to participate in the written consent.
In summary, the Board continues to believe that the strong corporate governance practices already in place, including the shareholders’ ability to call a special meeting, the robust set of rights and demonstrated responsiveness to shareholders, provide the appropriate means to advance shareholders’ interests without potentially disenfranchising some shareholders. These rights and practices allow the Board to oversee the business and affairs of Delta for the benefit of all shareholders while avoiding the governance risk associated with the right to act by written consent. For these reasons, we believe the ability to act by written consentBoard has concluded that this proposal is neither necessary nor inadvances the shareholders’ best interests.interests of Delta’s shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
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The Political Contributions & Activity Report is available on the governance tab of our investor relations website at ir.delta.com. It can also be accessed at: https://s2.q4cdn.com/181345880/files/doc_downloads/governance/2022/Delta-Air-Lines-Political-Contributions-Report-2021-FINALv3.pdf
The Climate Lobbying Report is available on the governance tab of our investor relations website at ir.delta.com. It can also be accessed at: https://s2.q4cdn.com/181345880/files/doc_downloads/governance/2022/Delta-Climate-Lobbying-FINAL-03.01.2022.pdf
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All of our proxy materials (including our 20182021 Form 10-K) are made available to our shareholders on the Internet, rather than mailing paper copies to each shareholder. If you received a Notice Regarding the Availability of Proxy Materials (the Notice) by U.S. or electronic mail, you will not receive a paper copy of these proxy materials unless you request one. Instead, the Notice tells you how to access and review the proxy materials and vote your shares. If you would like to receive a paper copy of our proxy materials free of charge, follow the instructions in the Notice. The Notice will be distributed to our shareholders beginning on or about May 10, 2019.6, 2022.
The Board of Directors set April 30, 201929, 2022 as the record date for the meeting. This means that our shareholders as of the close of business on that date are entitled to notice of and to vote at the annual meeting. On April 15, 2019, 654,646,26922, 2022, 641,058,015 shares of Delta common stock were outstanding, and we do not expect the number of shares will change materially as of the record date. The common stock is the only class of securities entitled to vote at the meeting. Each outstanding share entitles its holder to one vote.
The quorum at the annual meeting will consist of a majority of the votes entitled to be cast by the holders of all shares of common stock that are outstanding and entitled to vote. Abstentions from voting and broker non-votes, if any, will be counted in determining whether a quorum is present. The meeting will not commence if a quorum is not present.
It is important that you vote in order to play a part in the future of the company. Please carefully review the proxy materials and follow the instructions below to cast your vote.
Shares of Common Stock Registered in Your Name or Held under Plans
The control number you receive in your Notice (or Notices) only covers shares of common stock in any of the following forms:
common stock registered in your name (registered shares);
common stock held in your account under the Delta 401(k) Retirement Plan for Pilots Savings Plan (Pilot Plan);
common stock allocated to your account under the Delta Family-Care Savings401(k) Retirement Plan or the Delta Family-Care Saving401(k) Retirement Plan for Ready Reserves (collectively referred to as the Family-Care401(k) Retirement Plans); or
unvested restricted common stock granted under the Delta Air Lines, Inc. Performance Compensation Plan.
If you are a Delta employee participating in the Employee Stock Purchase Plan, any control number you receive in your Notice does not cover shares of common stock purchased pursuant to the Plan.plan. These shares are held for your benefit by Fidelity in street name and you must instruct Fidelity regarding voting these shares on your behalf. See “Shares Held in Street Name” on page 62.69.
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Ifyouholdsharesinmorethanoneofthewayslisted,youmayreceivemorethanoneNoticewithseparatecontrolnumbers.Youwillneedtosubmitvotinginstructionsforsharesassociatedwitheachcontrolnumberinordertovoteallofyourshares.
Your submission of voting instructions for registered shares results in the appointment of a proxy to vote those shares. In contrast, your submission of voting instructions for common stock held in Pilot Plan accounts or allocated to Family-Care401(k) Retirement Plans accounts, or for unvested restricted common stock granted under the Delta Air Lines, Inc. Performance Compensation Plan, instructs the applicable plan trustee or administrator how to vote those shares, but does not result in the appointment of a proxy. You may submit your voting instructions regarding all shares coveredbythesamecontrolnumberbefore the meeting by using our Internet or telephone system or by completing and returning a proxy card, as described below.below. As noted above, if you hold shares in more than one way, you will need to vote the shares associated with each control number separately. You may vote in one of the following ways:
VotingbytheInternetorTelephone. You may vote using the Internet or telephone by following the instructions in the Notice to access the proxy materials and then following the instructions provided to allow you to record your vote. After accessing the proxy materials, to vote by the Internet, go to www.proxyvote.com and follow the instructions, or to vote by telephone call 1-800-690-6903. The Internet and telephone voting procedures are designed to authenticate votes cast by using a personal identification number. These procedures enable shareholders to confirm their instructions have been properly recorded.
VotingbyProxyCard. If you obtained a paper copy of our proxy materials, you may also vote by signing, dating and returning your instructions on the proxy card in the enclosed postage-paid envelope. Please sign the proxy card exactly as your name appears on the card. If shares are owned jointly, each joint owner should sign the proxy card. If a shareholder is a corporation or partnership, the proxy card should be signed in the full corporate or partnership name by a duly authorized person. If the proxy card is signed pursuant to a power of attorney or by an executor, administrator, trustee or guardian, state the signer’s full title and provide a certificate or other proof of appointment.
Tobeeffective,instructionsregardingsharesheldinyourPilotPlanaccountorallocatedtoyourFamily-CarePlan 401(k) Retirement Plans accountmustbereceivedby before 5:00 p.m.EasternDaylightTimeonJune18,2019. 14, 2022. Instructionsregardingregisteredsharesorunvestedrestrictedcommonstockmustbereceivedby before 11:59 p.m.EasternDaylightTimeonJune19,2019. 15, 2022.
You may also vote registered shares by attending the annual meeting and voting in person by ballot; this will revoke any proxy you previously submitted.
Note that you may not vote shares of unvested restricted common stock, shares held in your Pilot Plan account or shares allocated to your Family-Care Plan401(k) Retirement Plans account in person at the meeting. If you do not submit voting instructions in a timely manner regarding shares of unvested restricted common stock, shares held in your Pilot Plan account or shares allocated to your Family-Care Plan401(k) Retirement Plans account, they will not be voted. See “Shares Held in Street Name” below for information about voting Employee Stock Purchase Plan shares.
All properly submitted voting instructions, whether submitted by the Internet, telephone or U.S. mail, will be voted at the annual meeting according to the instructions given, provided they are received prior to the applicable deadlines described above. All properly submitted proxy cards not containing specific instructions will be voted in accordance with the Board of Directors’ recommendations set forth on page 64.70. The members of Delta’s Board of Directors designated to vote the proxies returned pursuant to this solicitation are Edward H. Bastian and Francis S. Blake and Daniel A. Carp.Blake.
If your shares are held in the name of a broker, bank or other record holder (that is, in street name), refer to the instructions provided by the record holder regarding how to vote your shares or to revoke your voting instructions. This includes any shares purchased through the Employee Stock Purchase Plan. You may also obtain a proxy from the record holder permitting you to vote in person at the annual meeting. Without a proxy from the record holder, you may not vote shares held in street name by returning a proxy card or by voting in person at the annual meeting. Ifyouholdyoursharesinstreetname,itiscriticalthatyouprovideinstructionsto,orobtainaproxyfrom, otherwise follow therecordholder instructions provided to you in the Notice, voting instruction form or other information provided to you by the broker, bank or other nominee that holds your shares, ifyouwantyoursharestocountintheelectionofdirectors(Proposal (Proposal 1),theadvisoryvoteonexecutivecompensation(Proposal (Proposal 2)andtheshareholderproposal(Proposal (Proposal 4). As described in the next section of this proxy statement, regulations prohibit your bank or broker from voting your shares on these proposals, but they may vote your shares on Proposal 3 without instructions.
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If you hold registered shares, unvested restricted common stock, shares in Pilot Plan accounts or shares allocated to Family-Care401(k) Retirement Plans accounts, you may revoke your proxy or voting instructions prior to the meeting by:
providing written notice to Delta’s Law Department at Delta Air Lines, Inc., Dept. No.Department 981, 1030 Delta Boulevard, Atlanta, Georgia 30354, Attention: CorporateSecretary; or
submitting later-dated instructions by the Internet, telephone or U.S. mail.
Tobeeffective,revocationofinstructionsregardingsharesheldinPilotPlanaccountsorallocatedtoFamily-Care 401(k) Retirement Plansaccountsmustbereceivedby before 5:00 p.m.EasternDaylightTimeonJune18,2019. 14, 2022. Revocationofinstructionsregardingregisteredsharesorunvestedrestrictedcommonstockmustbereceivedby before 11:59 p.m.EasternDaylightTimeonJune19,2019. 15, 2022.
You may also revoke your proxy covering registered shares by attending the annual meeting and voting in person by ballot. Attending the meeting will not, by itself, revoke a proxy.
Under New York Stock Exchange (NYSE) rules, brokerage firms may vote in their discretion on certain matters on behalf of clients who do not provide voting instructions at least 15 days before the date of the annual meeting. Generally, brokerage firms may vote to ratify the appointment of independent auditors and on other “discretionary” items. Because Proposals 1, 2 and 4proposals other than Proposal 3 are not discretionary items, brokers are not permitted to vote your shares on these proposals unless you provide voting instructions. Accordingly, if your shares are held in a brokerage account and you do not return voting instructions to your broker by its deadline, your shares may be voted by your broker on Proposal 3, but not the other proposals described in this proxy statement. Broker non-votes will not be considered in connection with Proposals 1, 2 and 4. Therefore,weurgeyoutogivevotinginstructionstoyourbrokeronallproposals.
At an annual meeting at which a quorum is present, the following votes will be necessary on each of the proposals:
Each director shall be elected by the vote of a majority of the votes cast with respect to the director. For purposes of this vote, a majority of the votes cast means that the number of shares voted “for” a director must exceed 50% of the votes with respect to that director (excluding abstentions).
The advisory vote to approve executive compensation (say on pay) requires the affirmative vote of the majority of shares present and entitled to vote at the meeting. Abstentions have the same effect as votes against the proposal. While this is a non-binding advisory vote, the Board values the opinions of our shareholders and the Personnel & Compensation Committee of the Board of Directors will review and consider the voting results when making future decisions regarding executive compensation.
Ratification of the appointment of Ernst & Young LLP as independent auditors for the year ending December 31, 20192022 requires the affirmative vote of the majority of shares present and entitled to vote at the meeting. Abstentions have the same effect as votes against the proposal.
Approval of the shareholder proposal described in this proxy statement requires the affirmative vote of the majority of shares present and entitled to vote. Abstentions have the same effect as votes against the proposal.
Broker non-votes, if any, will be handled as described under “Limitation on Brokers’ Authority to Vote Shares” above.
2019 PROXY STATEMENT 63
The Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting as follows:
2019.2022.
All properly submitted proxy cards not containing specific instructions will be voted in accordance with the Board’s recommendations.
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Delta is not aware of any business to be transacted at the annual meeting other than as described in this proxy statement. If any other item or proposal properly comes before the meeting (including, but not limited to, a proposal to adjourn the meeting in order to solicit votes in favor of any proposal contained in this proxy statement), the proxies received will be voted at the discretion of the directors designated to vote the proxies.
To attend the annual meeting, you will need to show you are either a Delta shareholder as of the record date, or hold a valid proxy from such a Delta shareholder.
If your shares are registered in street name, or are held in a Pilot Plan or Family-Care401(k) Retirement Plans account, please bring evidence of your stock ownership, such as your most recent account statement.
If you own unvested restricted common stock, please bring your Delta-issued identification card; we will have a list of the holders of unvested restricted common stock at the meeting.
All shareholders should also bring valid picture identification; employeesidentification (employees may use their Delta-issued identification card.card). If you do not have valid picture identification and proof that you own Delta stock, you may not be admitted to the meeting.
In addition, the venue for the annual meeting requires proof of COVID-19 vaccination for entry. The CDC considers individuals to be “fully vaccinated” either (a) 2 weeks after their second dose in a 2-dose series, such as the Pfizer or Moderna vaccines, or (b) 2 weeks after a single-dose vaccine, such as Johnson & Johnson’s Janssen vaccine. Acceptable proof of vaccination includes a vaccination card (original or two-sided photo or copy) or proof via the NY Excelsior app (or an equivalent app).
Please do not attend the annual meeting in person if you have tested positive for COVID-19 in the prior 10 days and are still required to remain in isolation under applicable CDC guidance or are experiencing a runny nose, cough, sore throat, headache, fever, chills, shortness of breath or any other symptom of COVID-19. Additionally, any person who has tested positive for COVID-19 in the prior 10 days (but who is permitted to exit isolation consistent with applicable CDC guidance) or who has been in close contact with a confirmed case of COVID-19 within the last 10 days must wear a face covering at all times.
As permitted by the 1934 Act, only one copy of this proxy statement is being delivered to shareholders residing at the same address, unless the shareholders have notified Delta of their desire to receive multiple copies of the proxy statement. This is known as householding.
Delta will promptly deliver, upon oral or written request, a separate copy of the proxy statement to any shareholder residing at an address to which only one copy was mailed. Requests for additional copies for the current year or future years should be directed to Delta’s Investor Relations toll freetoll-free at (866) 715-2170.
Shareholders of record residing at the same address and currently receiving multiple copies of the proxy statement may contact our registrar and transfer agent, EQ Shareowners Services, to request that only a single copy of the proxy statement be mailed in the future. Contact EQ by phone at (800) 259-2345 or by mail at P.O. Box 64854, St. Paul, MN 55164-0854.
If you hold your shares in street name, you should contact Broadridge Investor Communication Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, NY 11717 or by calling 1-866-540-7095 to request that only a single copy of the proxy statement be mailed in the future.
Delta will pay the cost of soliciting proxies. We have retained Innisfree to solicit proxies, by telephone, in person or by mail, for a fee of $20,000$25,000 plus certain expenses. In addition, certain Delta officers and employees, who will receive no compensation for their services other than their regular salaries, may solicit proxies.
Delta will also reimburse banks, brokers and other nominees for their costs in forwarding proxy materials to beneficial owners of Delta stock. Other proxy solicitation expenses that we will pay include those for preparing, mailing, returning and tabulating the proxies.
2019 PROXY STATEMENT 65
| 2022 PROXY STATEMENT | 71 |
To be considered for inclusion in our proxy statement for the 20202023 annual meeting, shareholder proposals other than a director nomination must comply with the requirements under SEC Rule 14a-8 and must be submitted in writing and received by us no later than 5:00 p.m., local time, on January 10, 2020,6, 2023, at the following address:
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Delta Air Lines, Inc.
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Under certain circumstances, shareholders may also submit nominations for directors for inclusion in our proxy materials by complying with the requirements in Article II, Section 9 of our Bylaws. Director nominations to be considered for inclusion in proxy materials for the 20202023 annual meeting must be received by us at the address above no earlier than December 11, 20197, 2022 and no later than January 10, 2020.6, 2023.
In addition, a shareholder may only bring business before the 20202023 annual meeting, other than a proposal included in the proxy statement, or may submit nominations for directors, if the shareholder complies with the requirements specified in Article II, Section 8 of our Bylaws.
The requirements include:
providing written notice that is received by Delta’s Corporate Secretary between February 20, 202016, 2023 and March 22, 202018, 2023 (subject to adjustment if the date of the 20202023 annual meeting is moved by more than 30 days, as provided in Article II, Section 8(b) of the Bylaws); and
supplying the additional information listed in Article II, Section 8(b) of the Bylaws.
Delta’s Bylaws are available at http://ir.delta.com/governance/.
In addition to satisfying the foregoing requirements under our Bylaws, to comply with the universal proxy rules (once effective), shareholders who intend to solicit proxies in support of director nominees other than Delta’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the 1934 Act no later than April 17, 2023.
A proxy granted by a shareholder will give discretionary authority to the proxies to vote on any matters introduced pursuant to the notice provision in our Bylaws, subject to the applicable rules of the Securities and Exchange Commission.
The Corporate Governance Committee evaluates potential nominees for director suggested by shareholders on the same basis as all other potential nominees. To recommend a potential nominee, you may:
e-mail nonmgmt.directors@delta.com or
send a letter addressed to Delta’s Law Department at Delta Air Lines, Inc., Dept. No.Department 981, 1030 Delta Boulevard, Atlanta, Georgia 30354, Attention: CorporateSecretary.
Each potential nominee is reviewed by the Committee, which decides whether to recommend a candidate for consideration by the full Board.
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Supplemental Information about Financial Measures
We sometimes use information that is derived from our Consolidated Financial Statements but that is not presented in accordance with accounting principles generally accepted in the U.S. (GAAP). Certain of this information is considered “non-GAAP financial measures” under SEC rules. The non-GAAP financial measures may be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. The tables below show reconciliations of non-GAAP financial measures used in this proxy statement to the most directly comparable GAAP financial measures. Reconciliations may not calculate correctly due to rounding.
We adjust pre-tax income for mark-to-market (“MTM”) adjustments and settlements on fuel hedge contracts, the MTM adjustments recorded by our equity method investees, Virgin Atlantic and Aeroméxico, and unrealized gains/losses on our equity investments accounted for at fair value, to determine pre-tax income, adjusted.
MARK-TO-MARKET (“MTM”) ADJUSTMENTS AND SETTLEMENTS
MTM adjustments are defined as fair value changes recorded in periods other than the settlement period. Such fair value changesthat are not necessarily indicativehistorical facts, including statements about our estimates, expectations, beliefs, intentions, projections or strategies for the future, may be “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or our present expectations. We describe known material risks and uncertainties applicable to Delta that could cause actual results and events to differ materially in our most recently filed periodic reports on Form 10-K, Form 10-Q and subsequent filings, including under the heading “Risk Factors.” All forward-looking statements speak only as of the actual settlement value of the underlying hedge in the contract settlement period. Settlements represent cash receiveddate made, and we undertake no obligation to publicly update or paid on hedge contracts settled during the period.
EQUITY INVESTMENT MTM ADJUSTMENTS
We record our proportionate share of earnings/loss from our equity investments in Virgin Atlantic and Aeroméxico in non-operating expense. We adjust for our equity method investees' MTM adjustmentsrevise any forward-looking statements to allow investors to better understand and analyze our core financial performance in the periods shown.
UNREALIZED GAIN/LOSS ON INVESTMENTS
We record the unrealized gains/losses on our equity investments accounted for at fair value in non-operating expense. Adjusting for these gains/losses allows investors to better understand and analyze our core operational performance in the periods shown.
(in millions) |
| Year Ended December 31 |
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| 2018 |
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| 2017 |
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Pre-tax income | $ | 5,151 |
| $ | 5,500 |
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Adjusted for: |
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MTM adjustments and settlements |
| (53 | ) |
| (259 | ) |
Equity Investment MTM adjustments |
| 29 |
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| 8 |
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Unrealized gain/loss on investments |
| (14 | ) |
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Total Adjustments |
| (38 | ) |
| (251 | ) |
PRE-TAX INCOME, ADJUSTED | $ | 5,113 |
| $ | 5,250 |
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2019 PROXY STATEMENT 67
After-Tax Return on Invested Capital
We present after-tax return on invested capital as management believes this metric is helpful to investors in assessing the company's ability to generate returns using its invested capital and as a measure against the industry. Return on invested capital is adjusted total operating income, after-tax, divided by average invested capital. All adjustments to calculate ROIC are intended to provide a more meaningful comparison of our results to the airline industry and other high-quality industrial companies.
(in millions, except % of return) |
| Year Ended December 31 |
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| 2018 |
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| 2017 |
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| 2016 |
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Adjusted book value of equity | $ | 21,040 |
| $ | 20,980 |
| $ | 18,830 |
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Average gross debt |
| 11,090 |
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| 10,991 |
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| 9,872 |
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Average invested capital | $ | 32,130 |
| $ | 31,971 |
| $ | 28,702 |
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Adjusted total operating income | $ | 5,965 |
| $ | 6,345 |
| $ | 6,880 |
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Tax effect |
| (1,395 | ) |
| (2,189 | ) |
| (2,328 | ) |
Tax-effected adjusted total operating income | $ | 4,570 |
| $ | 4,156 |
| $ | 4,552 |
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AFTER-TAX RETURN ON INVESTED CAPITAL |
| 14.2% |
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| 13.0% |
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| 15.9% |
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We present operating cash flow, adjusted because management believes adjusting for the following items provides a more meaningful measure for investors. Adjustments include:
During the March 2016 quarter, we deferred settlement of a portion of our hedge portfolio until 2017 by entering into transactionsreflect events or circumstances that excluding market movements frommay arise after the date of inception, would provide approximately $300 millionthis report except as required by law.
Website links included in cash receipts duringthis proxy statement are for convenience only. The content of any website link and the second halfmaterials and reports available on or through them are not incorporated by reference into this proxy statement and do not constitute a part of 2016 and require approximately $300 million in cash payments in 2017. Operating cash flow is adjusted to include the impact of these deferral transactions in order to allow investors to understand the net impact of hedging activities in the period shown.
REIMBURSEMENTS RELATED TO BUILD-TO-SUIT FACILITIES AND OTHER
Management believes investors should be informed that these reimbursements for build-to-suit leased facilities effectively reduce net cash provided by operating activities and related capital expenditures.
(in millions) | Year Ended December 31, 2018 |
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Net cash provided by operating activities | $ | 7,014 |
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Adjusted for: |
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Hedge deferrals |
| (19 | ) |
Reimbursements related to build to suit facilities and other |
| (96 | ) |
NET CASH PROVIDED BY OPERATING ACTIVITIES, ADJUSTED | $ | 6,899 |
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this proxy statement.
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We present net capital expenditures because management believes investors should be informed that a portion of these capital expenditures are reimbursed by a third party.
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2019 PROXY STATEMENT 69
