UNITED STATES
SECURITIES AND 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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| Preliminary Proxy Statement |
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| Definitive Proxy Statement |
| Definitive Additional Materials |
| Soliciting Material Pursuant to § 240.14a-12 |
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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| Fee paid previously with preliminary materials. |
| Fee computed on table |
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NOTICEOF THE ANNUAL MEETING OF SHAREHOLDERS
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TIME AND DATE: |
| RECORD DATE: |
Thursday, June 7:30 a.m. Eastern Daylight Time | The 450 Lexington Avenue, New York, New York | 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 |  |
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|  | 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 attendthemeetingvirtually, please see the instructions on page 7671 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 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 |
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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 |
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 7, 2021.6, 2022.
Pleasereadourattachedproxystatementcarefullyandsubmityourvoteassoonaspossible.Yourvoteisimportant.YoucanensurethatyoursharesarevotedatthemeetingbyusingourInternetortelephonevotingsystem,orbycompleting,signingandreturningaproxycard.
Atlanta, Georgia
May 7, 2021
6, 2022
 | 1 |
LETTER FROM THE NON-EXECUTIVE CHAIRMAN OF THE BOARD
In his letter, Ed will describe to youLetter from the tremendous workNon-Executive
Chairman of the entire Delta family during the courseBoard
FRANCIS S. BLAKE
Chairman of the COVID-19 pandemic. On behalf of the Board it has been a privilege
We are looking forward to oversee, encourage and support the management teamonce again being with our shareholders in person at Delta’s upcoming annual meeting.
As we reflect on 2021, Delta made significant progress in its strong and thoughtful response torecovery from the impact of the pandemic on Delta.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.
As is described in more detail inWith the proxy statement,company’s business continuing to recover from the Board has been extremely engaged throughout the crisis on your behalf, discussing with management as frequently as twice a week in the early daysdepths 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 us on these topics over the last year and continuing with bi-weekly updates through the first half of this year. We formally met as a board 13 times in 2020, monitoring the impact
In light of the pandemic and the company’sBoard’s continuing focus on taking care of its employeesESG topics, we have revisited and customers, protecting its liquidity and preparing for recovery.
The committees ofclarified the Board held numerous special meetings and received updates in addition to regular meetings. In addition to the routine areasallocation of oversight responsibilities among our committees. As is discussed in greater detail in this proxy statement, oversight over ESG matters aligns with the general responsibilities of our existing committees took on expanded duties or had increased activity during the year.as follows:
The Audit Committee actively monitored the company’shas oversight of corporate ethics and standards of conduct, cybersecurity risks and aspects of reporting in the challenging remote working environment.of environmental sustainability and social matters.
The Corporate Governance committee received updates on the company’s commitment to carbon neutralityCommittee has responsibility for governance practices and the ongoing developmentprocedures as well as oversight of the environmental sustainability strategy.opportunities and risks, political engagement and contributions and charitable contributions.
The Finance Committee received numerous updateshas oversight of significant investments, including acquisition of new, more fuel efficient aircraft and provided oversight on the company’s financial condition, liquidity and financing transactions.significant investments in new technologies.
The Personnel & Compensation Committee closely monitoredhas oversight of talent development and evaluated the impact of the pandemic on 2020 compensation and engaged withhuman capital management, on efforts to improveincluding diversity, equity and inclusion.inclusion and general wellbeing.
The Safety & Security Committee expanded its rolehas 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 response to the pandemic to oversee the company’s protectionoversight of the health of the company’s employees and customers.
The foundation of good governance practices reflected in all of our activity in 2020 has served us well andESG matters. We will continue to do so as recovery accelerates. monitor our structure to make sure that oversight responsibilities are appropriately assigned.
“ The combinationBoard remains appreciative of the depthdedication and hard work of leadership experience among ourall Delta employees.”
We are excited that Greg Creed and Leslie Hale have joined the Delta Board members and specific experience in areas such as cybersecurity, energy, risk management and global security has long been cruciallook forward to our collective oversight of the management team.
Even so, wetheir contributions for years to come. We continue to evaluate our own performance and composition regularly. We remain mindful of the need for the Board to possessfocus on bringing a wide range of strong experiences, skills, qualifications, experiences and background. In particular, while fivebackgrounds to the Board. We are also committed to continuing the enhancement of the membersdiversity of the Board.
Because of the unusual circumstances of the past two years, the Board are diverse from a racial, ethnic or gender standpoint, the events of last summer remind us that we can and shouldhas asked me to continue to improveserve for one more year. I am very grateful to Bill Easter that he has agreed to continue his service as well. The dedication and enhance diversity inhard work of the boardroom.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 thisthe year and Delta’s continued progress on its recovery, we welcome your engagement on issues of importance to you and the challenges that remain ahead for Delta, the Board welcomes your engagement.company. We encourage you to share suggestions and concerns with us. In particular, we encourage you to review this proxy statement, and vote in the upcoming meeting.
As always, we deeply appreciate your support as shareholders and customers.
Sincerely,
| ir.delta.com | | 2 |
LETTER FROM THELetter from
the CEO
EDWARD H. BASTIAN
Chief Executive Officer
20202021 was truly 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 history books. We beganhorizon.
While the year at our company’s highestwas more turbulent than many had hoped, with new variants complicating the recovery, it nonetheless marked a major turning point outlining our visionand laid the groundwork for significant progress in 2022 as the future of travel atworld moves past the pandemic era toward treating COVID as a CES keynote; paying a record $1.6 billion in profit sharing to our people; and announcing a 10-year investment toward becoming a carbon neutral airline.manageable virus.
Within weeks of those events, a national emergency was declared over the COVID-19 pandemic, and our business fell to the lowest of lows. Travel demand vanished overnight, our revenues evaporated and our future, at least in the short term, looked uncertain.
As they have so often in the past,Once again, the people of Delta stepped up and led the way as we navigatedindustry throughout a year that was marked by remarkable accomplishments amid the darkest days of the pandemic and moved toward recovery. Thanks to their hard work and dedication, during 2020 Delta:slow but steady recovery, including:
ImplementedRestarting the operation to accommodate an unprecedented safetyinflux of returning customers ahead of a robust and health program that included extensive cleaning, employee testing,successful summer travel season, and mask requirements for our planes several months beforeadding 15,000 new team members since the federal mask mandate, protecting our employees and customers.start of 2021.
Avoided involuntary furloughs ofManaging our U.S. employees thanksnetwork and policies to accommodate travel demand in an often-volatile environment, ensuring that flights were available to desired destinations while providing customers the sacrifices of our people, who took early retirements and departure packages at unprecedented rates, volunteeredflexibility to take unpaid leaves of absence and worked reduced hours for much of the year.book Delta with confidence.
Raised more than $25 billionImproving Delta’s status as the No. 1 premium airline by widening the gap with the competition in capital to bolstercustomer service and premium product offerings, including high-speed Wi-Fi, on-board food and beverage choices, expanded digital tools, and the delivery of our liquidity – a critical action that, when coupled with much-needed government support to protect airline employee jobs, ensures that Delta is well-positioned as demand returns.first state-of-the-art A321neo aircraft.
Outperformed our competitors on passenger revenue generation despite having fewer seats for sale, as the only U.S. airline to block the middle seat through the end of 2020Accelerating critical airport capital projects, including new and into 2021.
Our culture demands that we always put people first, with the safety of our employees, customers and communities the first priorityenhanced terminals in every decision. With positive customer feedback at record levels during the pandemic, we believe our approach is building loyalty that will reward Delta for years to come.
As the pace of vaccinations accelerates, our customers are reclaiming their lives. Air travel will be central as people reconnect with loved ones and business colleagues, replacing their screens with real human touchpoints as they venture out of their homes and communities to experience the world again.
We see the second half of 2021 as the continuation of a meaningful recovery that will grow over the next few years, with Delta leading the way as economies reopen and flourish.
Our efforts to transform the air travel experience remain underway – in fact, we’ve sped up the timeline by accelerating our fleet renewal plans and airport construction projects inSalt Lake City, Los Angeles, New York and elsewhere.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.
And our commitmentLooking ahead, the recovery continues to environmental sustainability and addressing climate change remainsaccelerate in full force through a plan that seeks2022, with consumers returning to balance near-term and long-term solutions and encompasses carbon reduction and removal, stakeholder engagement and coalition building. We plan to spend more than $30 million this year on verified offsets to mitigate 13 million metric tons of carbon dioxide emissions from our airline business from March 1, 2020 through the end of 2020.
We also were motivated in 2020 to take a hard look at diversity, equity and inclusion at Delta. While we have a lot to be proud of, we know that we can do better. That’s why we’ve committed to a slate of actions to create more opportunities for our Blacktravel, international borders reopening, corporate offices welcoming back employees and help makebusiness travelers reclaiming the skies. The investments Delta a truly just, equitablehas made over the past two years in our people, our customers and anti-racist company.
From any standpoint, 2020 was the hardest year in Delta’s history. But it was also among our proudest moments. 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. Thanks”
While we continue to lead in the experiencesrecovery and lessonsbuild the future of 2020,air travel, it’s clear that our path forward must be a sustainable one. That’s why amid the challenges of the pandemic, Delta that we’re rebuilding todayhas 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 strongeravailable 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 more successfultheir never-ending drive to Keep Climbing, are reshaping the future of air travel for many yearsgenerations 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,
| | 3 |
| ir.delta.com | | 4 |
As a global airline based in the U.S., Delta connectswe connect customers across our expansive global network. In 2019, prior to the onset of the COVID-19 pandemic, we connected overserved approximately 200 million customers toand were the world’s largest airline by total revenues and the most profitable, with five consecutive years of $5 billion or more than 300 destinations in over 50 countries. 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 due toin 2020. We made significant progress in restoring our network in 2021, as travel restrictions eased and the declinevaccine programs became widespread both domestically and in demand. We nonetheless served approximately 70 million customers during 2020, many of them prior to the onset of the pandemic.international markets.
Our achievements over the last decade produced a strong financial foundation, record customer satisfaction scores, diversified revenue streamsWith operational excellence, best-in-class service and a scale advantage throughcommitment to ensuring the transformationhealth and safety of our global network – living upcustomers, we have continued to earn our brand promise of connectingcustomers’ trust and preference by delivering the diverse people and communities of the world better than any other airline. Our proven track record positioned Delta to navigate the crisis and emerge as a stronger, more resilient airline.“Delta Difference.” We have five competitive advantages that support our trusted consumer brand.
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 | GLOBAL NETWORK | |
We and our We believe that our globalnetwork has the best domestic connecting hub complex 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. | ||
 | OPERATIONAL RELIABILITY | |
Our reliability was a key component to Delta being named the Top U.S. Airline of 2021 by the Wall Street Journal in its annual airline scorecard rankings. This achievement recognizes the consistent efforts of our people to safely deliver reliable, on-time service while providing an exceptional customer experience. 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 | ||
 | CUSTOMER LOYALTY | |
In 2021, we were recognized as No. 1 in customer satisfaction among airlines in North America by J.D. Power, underscoring the professionalism, care and humanity that our people delivered during one of the most stressful periods for travel in modern history. We were also ranked No. 18 on Fortune Magazine’s World’s Most Admired Companies list and Our trusted, global brand and strongrelationship with American Express® combine to | ||
 | FINANCIAL FOUNDATION | |
Over the
will produce a competitive cost structure. | ||
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At the Annual Meeting, shareholders will be asked to vote on the election of the 12 directors shown below. The Board’s recommendation is to voteFOReach nominee. See pages 58-64 for more information.Directors
 | EDWARD H. BASTIAN
CEO of Delta
|  | FRANCIS S. BLAKE
Non-Executive Chairman of the Board of Delta; former Chairman and CEO of The Home Depot
|  | ASHTON B. CARTER
Director of the Belfer Center for Science and International Affairs at Harvard Kennedy School
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| Age: 63 | Age: 71 | INDEPENDENT | Age: 66 | INDEPENDENT | |||||||||
| Director since | 2010 | Director since | 2014 | Director since | 2017 | ||||||||
| Other Public Boards: 1 | Other Public Boards: 2 | COMMITTEES: Corporate Governance★, Finance and Personnel & Compensation | Other Public Boards: 1 | COMMITTEES: Audit and Safety & Security
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 | DAVID G. DEWALT
Chairman of NightDragon Acquisition Corp; Founder and Managing Director of NightDragon Security; former Executive Chairman and CEO of FireEye
|  | WILLIAM H. EASTER III
Former Chairman, President and CEO of DCP Midstream
|  | CHRISTOPHER A. HAZLETON
Captain, Airbus 321, Delta
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| Age: 57 | INDEPENDENT | Age: 71 | INDEPENDENT | Age: 53 | |||||||||
| Director since | 2011 | Director since | 2012 | Director since | 2019 | ||||||||
| Other Public Boards: 2 | COMMITTEES: Audit, Corporate Governance and Safety & Security★
| Other Public Boards: 2 | COMMITTEES: Audit★, Corporate Governance and Safety & Security
| Other Public Boards: 0 | COMMITTEES: Safety & Security
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 | MICHAEL P. HUERTA
Former Administrator of the Federal Aviation Administration
|  | JEANNE P. JACKSON
Former President, Senior Strategic Advisor to the CEO of NIKE
|  | GEORGE N. MATTSON
Co-Chairman of NextGen Acquisition Corp I and II; former Partner of Goldman Sachs
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| Age: 64 | INDEPENDENT | Age: 69 | INDEPENDENT | Age: 55 | INDEPENDENT | ||||||||
| Director since | 2018 | Director since | 2017 | Director since | 2012 | ||||||||
| Other Public Boards: 0 | COMMITTEES: Audit and Safety & Security
| Other Public Boards: 1 | COMMITTEES: Finance and Personnel & Compensation
| Other Public Boards: 3 | COMMITTEES: Corporate Governance, Finance★ and Personnel & Compensation
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 | SERGIO A.L. RIAL
CEO of Banco Santander Brazil
|  | DAVID S. TAYLOR
Chairman, President and CEO of The Procter & Gamble Company
|  | KATHY N. WALLER
Former Executive Vice President, CFO and President, Enabling Services, of The Coca-Cola Company
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| Age: 60 | INDEPENDENT | Age: 63 | INDEPENDENT | Age: 62 | INDEPENDENT | ||||||||
| Director since | 2014 | Director since | 2019 | Director since | 2015 | ||||||||
Other Public Boards: 2 (parent-sub)
| COMMITTEES: Corporate Governance, Finance
| Other Public Boards: 1 | COMMITTEES: Finance and Personnel & Compensation
| Other Public Boards: 3 | COMMITTEES: Audit, Corporate Governance and Personnel & Compensation
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★ Committee Chair
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 | |||||
| ir.delta.com | | 6 |
Shareholders will also be asked to vote on the following proposals:
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ITEM 2 | Advisory vote on executive compensation | | FOR |
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ITEM 3 | Ratification of Ernst & Young LLP as independent auditors for | | FOR |
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ITEM 4 | Shareholder proposal | | AGAINST |
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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. Consistent with past years,
Last year, the Personnel & Compensation Committee set rigorous performance measures and goals under our annual and long-term incentive programs in February 2020, priordecided not to the declaration of the COVID-19 pandemic by the World Health Organization. Following the onset of the pandemic, the Committee monitored the impact of COVID-19 on these measures and goals.
Our leadership team has shown exceptional performance in managing the company in the face of the unprecedented challenges resulting from the pandemic. Notwithstanding these significant accomplishments, due to the impact of the pandemic on our business and our focus on compensation that is both performance-based and employee-aligned, the following actions were taken with respect to 2020 executive compensation:
Reduced base salaries of our officers from April 1 through December 31, 2020
Eliminated annual incentive plan payouts despite attainment of certain performance measures under the plan because no payouts were made to our frontline employees under the company’s broad-based employee profit sharing program (Profit Sharing Program)
Did not alter the performance measures or goals forof 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 thesethe changes to our annual and long-term incentive plans and other decisions regarding 20202021 executive compensation, see the “Compensation Discussion and Analysis” section beginning on page 2423 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. TheseOur engagement efforts allowallows us to better understand our shareholders’ priorities, perspectives and concerns, and positionpositions us to effectively address issues that are important to our shareholders. During 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. 2020,despiteThis represented engagement with institutions holding 83% of theCOVID-19pandemic,wemetvirtually,orinitiatedcontact,withshareholdersrepresentingapproximately70% shares held by all ofouroutstandingshares,includingactivelymanagedfunds,indexfunds,publicpensionfunds,andsociallyresponsibleinvestmentfunds. institutional shareholders. We also have dedicated resources to engage with our shareholders, including individual shareholders, through monitoring of communications received by our investor relations and sustainability departments, which collectively responded to more than 100150 inquiries during 2020.2021. The table below summarizes key aspects of these engagement efforts during 2020.2021.
| ir.delta.com | | 8 |
We are committed to taking care of our people, being a good steward of the environment taking care of our people and being a positive force in our communities. This commitment is based on our culture of putting people first in all we do -— whether it’s our employees, the millions of customers who trust us with their travel each year, or the millions who make up the communities where we live, work and serve.
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 responsible business, we remain mindfulvariety of the impact of our global decisions. Nowhere is this clearer than in our visionthese matters.
ENVIRONMENTAL SUSTAINABILITY PROGRAM OVERSIGHT
The oversight of our environmental sustainability program is guided by the following:
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ACTIONS TOWARD VISION OF ZERO-IMPACT AVIATION
The aviation industry accounts for roughly 2 percent of global carbon emissions. Our carbon footprint is our largest environmental impact, with 98 percent of carbon emissions from our air transportation business coming from jet fuel. In February 2020, we committed $1 billion over a 10-year period for the purpose of advancing our goal of carbon neutrality. Despite the COVID-19 pandemic, we have made progress toward - and reiterated our focus on - achieving this ambitious goal. In March 2021, we announced our long-term vision of zero-impact aviation, which we define as air travel that does not damage the environment directly or indirectly via greenhouse gas emissions, noise, waste generation or other environmental impacts. Our environmental sustainability plan, which is guiding our efforts with respect to achieve carbon neutrality, is focused on three areas: carbon reduction and removal, stakeholder engagement and coalition building, each of which is described in further detail below.
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We plan to report our environmental sustainability practicesESG matters through an annual ESG report that is mapped toinformed by the SASBTask Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB) and TCFDthe Global Reporting Initiative (GRI) frameworks and indicators,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 is intended to build on the key themes addressedwill be described in the corporate responsibility reportsour 2021 ESG Report. In addition, we have issued in prior years.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 2020,2021, we also prepared and reviewed reports related to numerous customer, industry and rating agency ESG disclosures, including Sustainalytics and MSCI, while engagingregularly engaged with shareholders and other organizationsstakeholders on ESG trends and opportunities.
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More For more information abouton ESG matters, including with respect to our environmental sustainability practices can be found inclimate strategy, risks, opportunities, metrics and targets, please see our 20202021 ESG report, which will beReport, available at www.delta.com/sustainability. This website and the materials available on or through it are not incorporated by reference into this proxy statement.sustainability.
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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. The dedication and determinationIn 2021, as our business began to recover from the impact of Delta people in response to the unprecedented challenges we faced due to the COVID-19 pandemic, enabled us to avoid involuntary furloughs of U.S.we hired approximately 11,000 new full-time employees with over 50,000 employees volunteering to take unpaid leaves of absence, approximately 18,000 employees participating in early retirementacross our business, including pilots, flight attendants, and voluntary separation programsgate and from April 1 through December 31, 2020, most employees working reduced hours. Throughout the pandemic, the Delta people have driven record net promoter scoresreservation agents.
The safety and health of our employees and customers is paramount. 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 and& Security Committee.Committee of our Board of Directors. We have led the airline industry for many years in employee safety and seek to achievestrive 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.
FollowingDuring 2021, we also continued to prioritize the onsetsafety 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 pandemic, we createdstate 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, symptoms, diagnosed, exposed to or at high risk for severe illness from COVID-19 and established a notification process for potential COVID-19 exposure. We also assembled a COVID-19 task force to develop a series of safety measures in an effort to protect our employees and customers, including offering on-site rapid COVID-19 testing in most locations and making at-home testing availablefree flu shots for all U.S.-based employees, and offering a return-to-work safety training program.U.S. employees. In earlyFebruary 2021, we began offering vaccination resources tohired Dr. Henry Ting as our employees at various U.S. locations and hired our first Chief Health Officer to lead Delta’s efforts to reimagine our approach to health and well-being as well aswellbeing. We have a framework in place to oversee our ongoing drive to reduce workplace injurieswellbeing strategy, which includes oversight from our Wellbeing Council and accommodate the physical and mental health needsPersonnel & Compensation Committee of our people over the entire span of their time at Delta.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. We haveIn 2021, we safely transported more than 135 million customers system wide. Following the onset of the COVID-19 pandemic, we intensified our focus on ensuring the safetyhealth and healthsafety of our customers, since March 2020, including through 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.aircraft through the use of science-backed cleaning technologies and protocols.
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DIVERSITY, EQUITY AND INCLUSIONDiversity, 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 diverse 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 operation,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.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.
During 2020, weWe remain focused on our strengthened our commitment to be an anti-racist, anti-discrimination organization.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 realizedrive this goalvision 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 help 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.
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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.
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As we connect people with communities, experiences and each other, we are dedicatedcommitted to doing our part to build a better world. Giving back to the communities where we live, work and serve is part of our culture and we have maintained this commitment throughout the COVID-19 pandemic.at Delta. The graphic below illustrates some of the numerous ways in which Delta and its people gave back in 2020.
2021:
DELTA’S COMMUNITY IMPACT
Our focus on advancing diversity, equity and inclusion extends into the communities around us. During 2020, we announced our efforts to create more opportunities for underrepresented groups and to support Black business partners in the following ways:
Establishing new partnerships with organizations driving systemic change, primarily in the areas of social injustice, economic empowerment and wealth development
Continuing our partnership with Operation HOPE by supporting business literacy and coaching those in underrepresented communities
Diversifying our supply chain and doubling our spending with Black-owned businesses by 2025, while seeking diverse business partners for Delta’s COVID-19 recovery strategy
Requiring each bidding and request-for-proposal process for new business relationships to include participation from minority-owned businesses
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Delta has a history of a strong, independent Board, composed of seasonedexperienced members who are diverse with respect to background, skills, experiences, gender, race and ethnicity. The Board is committed to sound corporate governance in line with evolving best practices.
After pausing the refreshment of the Board during the pandemic, Leslie D. Hale and Greg Creed have recently joined the Board, bringing strong experience and skills. In order to provide continuity as we continue to recover from the impact of the pandemic, the Board has waived the retirement age for Mr. Blake and Mr. Easter. As the Chair of the Board and of the Corporate Governance Committee, Mr. Blake’s leadership of the Board has been critical during the pandemic. Likewise, Mr. Easter has played a crucial role in leading the Audit Committee. Their ongoing service will enable the Board to continue to function efficiently and effectively as leadership responsibilities transition.
CORPORATE GOVERNANCE HIGHLIGHTSCorporate Governance Highlights
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During 2020,2021, the Board of Directors met 13nine times. Each director who served on the Board during 20202021 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 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 2020.2021. During the year, the Board routinely held executive sessions without the Chief Executive Officer. Mr. Blake presided at these sessions as non-executive Chairman of the Board.
In addition to formal meetings, the Board members participated in 17bi-monthly update calls with management during 2020 and have continued to participate in frequent calls during the first half of 2021.2021 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, the Chief Executive Officer and the Chief Legal Officer, scheduling Board meetings, 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 interest
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 held by each of these committees in 20202021 and the committee’s primary responsibilities are listed beginning on the next page.
A detailed 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/. Our Certificate of Incorporation, Bylaws, Corporate Governance Principles, codes of ethics and business conduct and director independence standards are also available in the corporate governance section of our website at ir.delta.com/governance/. This website and the materials available through it are not incorporated by reference into this proxy statement.
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All membersIn early 2022, the Board reviewed and, as appropriate, updated the allocation of the Audit, Corporate Governance, Finance and Personnel & Compensation Committeesoversight responsibilities for various ESG matters. These responsibilities are non-employee directors who are independent, as definedidentified in bold type in the New York Stock Exchange (NYSE) listing standards and Delta’s director independence standards. Prior to his retirement from the Board in 2020, Dan Carp was also independent. 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).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 |
*Audit Committee Financial Experts | TheAuditCommitteeReportcanbefoundonpage |
CORPORATE GOVERNANCE COMMITTEECorporate Governance Committee
Members | Primary Responsibilities |
Francis S. Blake (Chair) Ashton B. Carter 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 risks, and efforts and progress with respect to these matters › periodically reviews reports on our corporate and PAC political contributions and charitable contributions made by Delta or |
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FINANCE COMMITTEEFinance Committee
Members | Primary Responsibilities |
George N. Mattson (Chair) Francis S. Blake 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 |
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PERSONNELPersonnel & COMPENSATION COMMITTEECompensation Committee
Members | Primary Responsibilities |
Sergio A. L. Rial (Chair) Francis S. Blake Greg Creed Jeanne P. Jackson George N. Mattson
Kathy N. Waller 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 |
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 David S. Taylor 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 › 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).
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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:
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For many years our Board of Directors and each of its committees have annually engaged in comprehensive self-evaluations.
The Board believes this annual evaluation process supports its effectiveness and continuous improvement.
The Board of Directors has ultimate responsibility to oversee Delta’s enterprise risk management program (ERM). Coordinated by the 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 functionalcross-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 nature of the risk, the responsibility for oversight of selected risks may be delegated to appropriate committees of the Board, with material findings reported to and discussed with the full Board.
The Board’s oversight of risk management is managed through delegation to each of the Board’s committees.committees with regular reporting to the full Board.
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Delta’s ERM process is a journey of continuous improvement and iteration to meet the evolving needs of our business. Leaders of the business divisions, working closely with the ERM leader, have responsibility for risk identification, development of business risk mitigation plans, and monitoring and reporting progress of their implementation. Delta’s leadership structure, combined with the roles of the Board, its committees, and the Delta Risk Council, (DRC), provide appropriate leadership for effective risk oversight.
The senior management level, cross-divisional Risk Council 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 Health Officer, Controller, Chief Information Security Officer, Chief Sustainability Officer and the head of the Corporate Audit & Enterprise Risk Management department, among others. As appropriate, various officers and employees attend meetings of the Risk Council and follow up on issues addressed within the Risk Council. The Risk Council |
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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.
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The following table sets forth the number of shares of Delta common stock beneficially owned as of April 15, 2021,22, 2022, by each director and director nominee, each person named in the Summary Compensation Table in this proxy statement, including two former executive officers of Delta who left Delta during 2020, 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 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 | - | |
Christopher A. | 300 |
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Michael P. Huerta |
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Jeanne P. Jackson |
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George N. Mattson |
| (5) |
Sergio |
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David S. Taylor |
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Kathy N. Waller |
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NamedExecutiveOfficers: |
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Glen W. Hauenstein |
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Alain M. Bellemare | 158,530 | (2) |
Peter W. Carter |
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William C. Carroll |
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Garrett L. Chase |
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(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 |
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Name | Number of Shares |
Edward H. Bastian |
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Glen W. Hauenstein |
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Alain M. Bellemare | 22,687 |
Peter W. Carter |
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William C. Carroll |
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Garrett L. Chase |
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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. Mattson’s adult son, over which Mr. Mattson has shared investment power and which is not required to be reported on a Form 4.
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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, 2021.22, 2022.
Name and Address of Beneficial Owner | Amount and Nature of Beneficial Ownership | Percentage of Class |
TheVanguardGroup |
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| 66,966,728(1) | 10.4% |
BlackRock,Inc. |
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| 38,133,128(2) | 5.9% |
(1) Based on an amendment to Schedule 13G filed on February (2) Based on an amendment to Schedule 13G filed on | ||
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Note from the Chairman of the Personnel & Compensation Committee
At this time last year my predecessor addressed the impact of COVID-19 on Delta’s business, as well as actions the Board and Delta management took on executive compensation in the early stages of the pandemic. We initially hoped these actions would be short-term, but they continued throughout 2020. Thanks to their sacrifices and aided by relief the U.S. government provided through the CARES Act, we avoided involuntary furloughs of our U.S. employees. Today I share with you decisions made since April 2020 involving executive compensation.
As our pay for performance philosophy demands, Delta’s executive compensation program appropriately rewards exceptional performance, but with a large majority of pay at risk and subject to market-based valuations. After many years of record financial, operational and customer service results, the COVID-19 pandemic devastated the airline industry, making the performance measures and goals we approved in early February 2020, as well as those under our 2018 and 2019 long-term plans, effectively obsolete.
In the process of determining how best to handle the up Eliminate space ending of our annual and long-term incentive plans, the Committee focused on two guiding principles developed with the executive leadership team. First, to continue the alignment of pay for performance between frontline employees and management – especially given no profit sharing for 2020. Second, to keep a meaningful portion of total compensation at risk for our senior management. Consistent with these principles, senior management took voluntary reductions in pay (with Ed Bastian taking no salary and all other officers taking a 50% reduction from April on) and recommended elimination of payouts under the annual incentive plan. These principles also led the Committee to make no changes to the annual and 2020 long term incentive plans. As a result, by December, a significant portion of the intended value of the 2020 long-term incentive awards had evaporated. For example, the value of our CEO’s 2020 compensation at year-end decreased by 68 percent when compared to his 2019 summary compensation table pay and decreased by over 57 percent when compared to its value in early February 2020.
Over this same period, senior management’s unwavering belief in and care for our people led to their redoubling of efforts to retain the best talent in industry, preserve Delta’s culture and ensure the organization’s successful recovery. In alignment with Delta’s compensation philosophy, they also focused on the financial impact the COVID-19 pandemic had on the earned compensation of all employee groups by conducting a comprehensive pay review and ensuring the financial sacrifices experienced by all employees were equally shared on a percentage basis.
Throughout 2020, the actions by both the Committee and senior management remained principle-based and aligned with Delta’s compensation philosophy. Yet, the Committee also knew the decision to maintain the status quo for 2020 would require us to develop a program for 2021 to reward the hard work and maintain the loyalty of our executives, recognize the overall reduction of their outstanding incentive compensation opportunities and comply with the compensation limitations of the CARES Act.
It was an eventful time to begin my tenure as Chairman, but I am confident the Committee is providing the necessary support and oversight for management as it leads Delta through its recovery and into its bright future.
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This section of the proxy statement describes the compensation of our named executive officers for 2020.2021. It also discusses how our executive compensation program reflects our compensation philosophy and objectives, including the importance of linking pay to performance.
20202021 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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| ALAIN M. BELLEMARE | Executive Vice President & President - International | |
PETER W. CARTER | Executive Vice President & Chief Legal Officer and Corporate Secretary |
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| Executive Vice President & Chief | |
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Effective November 15, 2020, Paul A. Jacobson resigned asJuly 19, 2021, Daniel C. Janki became Delta’s Chief Financial Officer and Mr.Officer. William C. Carroll and Mr.Garrett L. Chase becameconcluded their service as Interim Co-Chief Financial Officers as of November 16, 2020. Effective October 2,that date.
We started 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, W. Gil West retired as Senior Executive Vice President & Chief Operating Officer.
Delta began2021 would not be predictable. We expected to see two distinct phases over the year. The first looking like 2020 with high expectations: gearingtravel 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 exceeddrive our decisions over the record-breaking $1.6 billion payout madeyear:
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 Profitcompany’s broad-based profit-sharing program (Profit Sharing Program for 2019, launching our commitment to becoming the world’s first carbon neutral airline and unveiling technological innovations to transform the air travel experience at CES 2020. Instead, the company faced the greatest challengesProgram).
The progress Delta made in its history withrecovery from the COVID-19impact of the pandemic the resulting global economic crisis and the global call for racial equity and social justice, which has greatly affected our employees, customers, communities and shareholders. In the face of these challenges, the company quickly pivoted from our initial 2020 Flight Plan and focused on three key priorities:
Protecting the health and safety of our employees and our customers
Securing our liquidity position
Defining Delta’s recovery path
The actions we took to meet these priorities arein 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.
As DeltaThrough mask mandates, new variants and pandemic fatigue, COVID-19 continued to be challenging to the rest of the world navigated a new normalairline industry in 2020, one thing remained unchanged: our belief2021. Our employees once again proved that Delta’s most important competitive advantage is ourits people. We were humbled by the dedication and determination of our people in response to the challenges Delta faced asAs a result of the COVID-19 pandemic. We will forever be grateful for the sacrificestheir resilience and dedication, we were ready to welcome back our employees made to sustain the airline during these extraordinary times. By our people taking the following actions,customers as they steadily resumed air travel. During 2021, we avoided involuntary furloughs of our U.S.-based employees:
Beginning April 1 and continuing for the remainder of 2020, a majority of hourly ground-based and merit employees’ scheduled work hours were reduced by 25 percent.
Over 50,000 employees volunteered to take unpaid leaves of absence ranging from 30 days to one year in duration.
Nearly 20 percent of our workforce (approximately 18,000 employees) participated in Delta’s enhanced early retirement and voluntary departure programs.
We have long known that our people and our culture are the foundations for the company’s success and the sacrifices they have made during this time are a true testament to the Delta difference. In return, we have supported our employees through this crisis in a variety of ways, as described below. We were also able to returnreturned all of our people to full schedules in 2021, despite runningand began rebuilding our workforce by welcoming approximately 11,000 new employees to Delta, while continuing our commitment to promote a culture of open, honest and direct communications and building an operationenvironment that is still significantly reduced.
All Delta people were affected in numerous respects by the worst year in our history, including financially. As we analyzed the impact of the COVID-19 pandemic on our operation, we were also mindful of the impact on earned compensation for all employee groupsencompasses diversity, equity and employment levels. In early 2021, we conducted a comprehensive pay review to ensure that the earned compensation of all our people in 2020 was comparable on a percentage basis so that the financial sacrifices experienced by our employees were shared equally.inclusion.
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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. | |
Diversity, Equity and Inclusion
AmidOur 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 inequalityinequity and injustice, we looked inward and strengthened our commitment in 2020 to be an anti-racist and anti-discrimination organization that reflects the diversityfosters our employees’ sense of the communities we serve throughout the world. While Delta’s diversity, equity and inclusion efforts are not new,belonging at Delta. In 2021, we accelerated these efforts in 2020 and committedour actions to closingclose 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. 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 and Our Communities”People” starting on page 119 for more information about Delta’s diversity, equity and inclusion efforts.
The Personnel & Compensation Committee oversees the company’s progress in meeting these goals and includes diversity updates as a standing meeting agenda item. In addition to the Committee’s oversight responsibilities, members of the Board of Directors have actively engaged with employees to share their perspectives on this important topic. In October 2020, Committee member Kathy Waller and fellow Board member, Bill Easter participated in a virtual “Let’s Talk About It” session with Delta employees to share their views on the importance of prioritizing diversity, equity and inclusion as part of a successful business strategy and the role corporations play in driving societal change.
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 made this effort a high priority in 2020 and it will continuealso continues to be the highest priority in 2021.place significant focus on executive talent planning. The Board of Directors is regularly updated on key talent indicators for our senior leaders, including recruiting, development and developmentsuccession planning programs. The Board members interact withThey are also exposed to potential future executive leaders through formal presentationsboard meetings and prior to the pandemic, informal events.
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Executive Compensation in 20202021
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 traditionally performsmet extensively with its annualcompensation 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 review in February. Consistent with past years, it approvedprogram 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 compensation plan design, including setting rigorousplans. However, due to the continued uncertainty of the pandemic’s ongoing impact on our business and the complexity of determining performance measures and goals in early February 2020 priorsuch an environment, the Committee made adjustments to better link compensation with performance through the onsetexpected 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 COVID-19 pandemic. The Personnel & Compensation Committee monitored theunique impact of COVID-19 throughout the year, holding frequent meetings with company management and its compensation consultant. pandemic.
In addition to other actions taken by the Committee in 2020 as described in this Compensation Discussion and Analysis, the following executive compensation actions were taken in responsewith respect to COVID-19:our annual and long-term incentive plans for 2021:
ReducedBaseSalariesBifurcated Performance Periods. The Personnel & Compensation Committee supported Mr. Bastian’s requestDue to forgo 100%the continued uncertainty of his base salary for nine months beginning April 1, 2020. In addition, all company officers, including the other named executive officers, took a 50% decrease in their base salaries for the same period.
NoAnnualIncentivePlanPayout. Because there would be no payouts under the Profit Sharing Programpandemic’s ongoing impact to our frontline employees for 2020,business and the complexity of determining performance goals in such an environment, the Personnel & Compensation Committee and company management believed that no payments should be made to any management employeeestablished two separate performance periods under our 2020 annual incentive plan. Therefore, at company management’s recommendation, the Committee exercised its discretion and eliminated payouts underboth the annual and long-term incentive plan, notwithstanding the attainment of certain performance measures.plans.
NoChangestoOutstandingLong-TermIncentiveAwards. The effects ofFor the pandemic impactedannual plan, the performance measures includedperiod was divided in our outstanding long-term incentive awards. Results fortwo six-month periods (rather than a single 12-month performance period).
For the performance award component of the 2018 long-term incentive program, (LTIP) were certified at 100% of target but were trending at over 160% in early 2020 prior to the impact of COVID-19. Results for the 2019typical three-year performance period was divided into separate one-year (2021) and 2020 LTIPs are currently trending near or below target. two-year periods (2022-2023).
The Personnel & Compensation Committee reinstated the full twelve-month and company management discussedthree-year performance periods for our 2022 incentive plans.
Reduced Number of Performance Measures. To concentrate our named executive officers’ focus on the meritselements most beneficial to our recovery efforts, the Personnel & Compensation Committee simplified the annual and long-term incentive plans by reducing the number of adjusting or resettingperformance 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 measures or goalsaward 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 outstanding LTIPs to recognize that such plans were developed through the lens of Delta’s record financial performance over the three years prior to 2020 and did not reflect the current state of the airline. While acknowledging that the named executive officers would likely never realize the full value of their outstanding long-term incentive opportunities, the Committee ultimately determined not to modify any outstanding awards.year.
The CARES Act and Executive Compensation in 2021
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 are expected to provideprovided approximately $6.4 billion in payroll support payments. All of the payroll support funds mustwere required to be used exclusively for the payment of employee wages, salaries and benefits and arewere conditioned on Delta agreeing, among other things, to refrain from conducting involuntary employee layoffs or furloughs from the date of the agreement through dates specified in each agreement, the last of which is September 30, 2021, or the date on which Delta has expended all of the payroll support whichever is later.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 (the end date under the third payroll support program) 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. As explained earlier, the Personnel & Compensation Committee determined our named executive officers’ 2020 compensation in February 2020, before
Delta has designed compliance processes for the CARES Act compensation limitations, went into effect. Accordingly, the target award opportunities provided under the 2020 LTIP are not eligible for inclusionincluding, in the CARES Act compensation calculation and are not subjectcertain cases, making adjustments to the CARES Act compensation limitations.
Company managementcomposition of an individual’s long–term incentive awards, and has designed processesprovided periodic comprehensive reports to ensure compliance with the CARES Act compensation limitations. As ofTreasury Department, as required by the date of this proxy statement, the total compensation provided to our named executive officers (and all other employees to which these limitations apply) for the 12-month period ending March 23, 2021, is within these limitations.
We are continuing with our current short-term and long-term incentive compensation plans for 2021. In February 2021, the Personnel & Compensation Committee approved annual target compensation levels for our named executive officers that are consistent with 2020 levels and within the CARES Act compensation limitations. The Committee believes that it has never been more important to motivate and retain our entire management team while they lead the company’s recovery efforts. Yet, it agreed, as in prior years and consistent with our pay for performance philosophy, that the substantial portion of the named executive officers’ 2021 compensation remain at risk—dependent on Delta’s achievement of its performance goals and stock price performance.
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Back to ContentsPSP 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 program › 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 strategies relating to talent development and human capital management, including diversity, equity and inclusion › Making recommendations to the Board of Directors on the appointment of officers › Reviewing tally sheets, competitive market data for our peer group and individual contributions to establish target compensation for our executive officers |
INDEPENDENT COMPENSATION CONSULTANT |
In |
| › Providing advice regarding Delta’s executive compensation program based on the company’s business strategy, compensation philosophy, prevailing market practices and relevant regulatory mandates › Providing annual recommendations directly to the Personnel & Compensation Committee on Chief Executive Officer compensation › 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 FW Cook’s advice when determining executive compensation plan design and award levels in | |
DELTA MANAGEMENT |
Delta’s management team provides input to the Personnel & Compensation Committee on Delta’s executive compensation program structure and, under the supervision of the Personnel & Compensation Committee, is responsible for the ongoing administration of the program. This includes: |
| › 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 compensation at risk. In 2020,2021, 94% of total target compensation for the Chief Executive Officer and 90% of total target compensation for the other named executive officers (excluding the Interim Co-Chief Financial 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.
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.
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.
Excluding the Interim Co-Chief Financial Officers
At our 20202021 annual meeting, we asked shareholders for a non-binding “say on pay” advisory vote to approve the 20192020 compensation of the named executive officers. The holders of over 92%93% of the shares present and entitled to vote at the 20202021 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 officers’ incentive compensation to compensation clawback provisions | |
| 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 |
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|  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 |
| No supplemental executive retirement or deferred compensation plans |
| No company-provided: › personal club memberships › executive life insurance › home security › financial planning |
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, 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 was 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 2020.2021. The companies in our peer group are:
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Airlines: | American Airlines Group Inc. | Southwest Airlines Co. | United Airlines Holdings, Inc. |
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. | L3Harris Technologies Inc. Textron Inc. | Raytheon Technologies Corporation |
Retail: | Best Buy Co., Inc. The Home Depot, Inc. | Lowe’s | Target Corporation |
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Peer Group | Revenue ($)(2) | Market Capitalization ($)(3) | International Operations as Percentage of Revenue (%)(4) | Revenue ($)(1) | Market Capitalization ($)(2) | International Operations as Percentage of Revenue (%)(3) |
75th Percentile | 71,461 | 141,626 | 36 | 79,474 | 161,960 | 40 |
Median | 39,268 | 78,610 | 20 | 38,655 | 72,446 | 24 |
25th Percentile | 14,521 | 27,094 | 8 | 17,814 | 25,358 | 8 |
DELTA AIR LINES | 17,095 | 25,539 | 22 | 29,899 | 24,925 | 19 |
Source: Standard & Poor’s Capital IQ | Source: Standard & Poor’s Capital IQ | Source: Standard & Poor’s Capital IQ | ||||
(1) L3 Harris Technologies is excluded due to L3 Technologies merger with Harris Corporation. (2) Last 12 months from most recent quarter ended on or before December 31, 2020. In millions. (3) As of December 31, 2020. In millions. (4) As of the most recent fiscal year-end. | ||||||
(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 | (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 free cash flow › 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 28,27, 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 and where relevant, the Chief Executive Officer, 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.
To achieveWithout our mission that no one better connects the world, the company’s pre-pandemic 2020traditional Flight Plan focusedfor 2021, the Personnel & Compensation Committee approached its performance measure evaluation with a focus on four core pillars: our people, our customers, our partnersrecovery and communities and our owners. Withfurther strengthening Delta’s culture ascompetitive advantages, with the foundation, our 2020 Flight Plan goals included being the airline of choice for customers, running the industry’s best operation, expanding Delta’s global network, delivering industry-leading financial results and investing for the future. 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 2020employees, 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 our annual and long-term incentive performance measures in 2017 to support a focus on positive revenue growth and global alliances. Given the positive momentum in these areas over the three years prior to 2020 and their
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continued focus for future years, the Personnel & Compensation Committee determined to retain the same performance measurespre-tax income margin (measured against an airline peer group) under the annual incentive plan for 2020. The Committee, however, made two adjustments to the performance measuresand return on invested capital under the long-term incentive program.
To recognize Delta’s In addition, the total shareholder return modifier (relative to all other S&P 500 companies) in the long-term commitmentincentive program was removed to deliver a combination of strong profit growth and capital efficiency,address the disproportionate impact the pandemic has had on various industries included in the S&P 500. The Personnel & Compensation Committee introduced cumulative free cash flow asbelieved that superior performance in the retained performance measures should ultimately produce sustainable long-term incentive program’s fourth performance measure, replacing relative total shareholder return. While no longer a core performance measure, relative total shareholder return was retained under the program as a modifier.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.
| 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 Program’s on-time arrival, baggage handling, flight completion and net promoter score goals, as well as on-time arrival and flight completion goals for our Delta Connection carriers › Satisfaction of these measures are determined based on achievement of either internal goals or first place performance relative to airline peers (other than net promoter scores) |
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| Performance | Description |
| Total Revenue per Available Seat Mile (TRASM) | › A unit revenue measure › Encourages focus on |
| Customer Service Performance | › Based on Delta’s |
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| › Encourages focus on long-term revenue and margin growth and is a measure of our business resilience |
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The base salaries of our Chief Executive Officer and our other named executive officers remain below the median of the peer group for their respective positions. None of
In 2020, our named executive officers received a salary increase in 2020.
As part of Delta’s effortseach agreed to preserve cash in recognition of the challenges facing Delta as a result of the COVID-19 pandemic, Mr. Bastian volunteered to forgo 100% of histemporarily reduce their base salarysalaries for nine months beginning April 1 2020. In addition, the other(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 agreedreceiving a salary increase in 2021.
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Back to forgo 50% of their base salaries for the same period.Contents
ANNUAL INCENTIVEAnnual Incentive
The 20202021 Management Incentive Plan (2020(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 2020.2021. The 20202021 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 20202021 MIP are provided in cash, however,cash. However, to provide further alignment between our executive officers and our people, the executive officers’ 20202021 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 2020 MIP.2021 MIP and the actual performance for each measure for 2021.
This column reflects the percentage of the target award achieved after application of the performance measure weightings applicable to the named executive officers other than the Interim Co-Chief Financial Officers whose Relative Financial performance measure weighting is 15% (rather than 25%). The remaining 10% is allocated to them through a leadership effectiveness performance measure.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 2020 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 20202021 MIP are expressed as a percentage of each participant’s base salary earned during the year.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 20192020 target award opportunities were maintained for the named executive officers other than forMr. Bastian, Mr. Hauenstein and Mr. Carter and Mr. Samant. Their 2020 MIP target opportunities were increased to 150% of base salary (from 125%) to recognize their increased responsibilities and focus on implementing the company’s strategic initiatives.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.
The Personnel & Compensation Committee was regularly updated onSummarized in the company’s performance undertable below are the 20202021 MIP throughout the year. It determined, after review and consultation with company management and the compensation consultant, that despite the negative impact of COVID-19 on the 2020 MIP, no changes or adjustments would be made to the performance measures approved in February 2020.
Due to the extraordinary efforts of our frontline employees, the only 2020 MIP performance measure that exceeded threshold level was operational performance. However, becauseawards earned by each named executive officer. Because there was noa payout under the Profit Sharing Program for 2020, at company management’s recommendation,2021, payments under the Personnel & Compensation Committee exercised its discretion and eliminated any potential payouts for all 20202021 MIP participants, including the named executive officers.were made in cash.
Named Executive Officer | Base Salary* | Target Award (as % of base salary) |
Target Award | Percentage of Target Award Earned |
| Total 2020 MIP Award | Base Salary* | Target Award (as % of base salary) |
Target Award | Percentage of Target Award Earned |
| Total 2021 MIP Award | ||||||
Mr. Bastian | $ | 237,500 | 200% | $ | 475,000 | 0% |
| $ | 0 | $ | 950,000 | 200% | $ | 1,900,000 | 93.75% |
| $ | 1,781,250 |
Mr. Hauenstein | $ | 437,500 | 175% | $ | 765,625 | 0% |
| $ | 0 | $ | 700,000 | 175% | $ | 1,225,000 | 93.75% |
| $ | 1,148,438 |
Mr. Bellemare | $ | 609,375 | 150% | $ | 914,063 | 93.75% |
| $ | 856,934 | |||||||||
Mr. Carter | $ | 343,750 | 150% | $ | 515,625 | 0% |
| $ | 0 | $ | 550,000 | 150% | $ | 825,000 | 93.75% |
| $ | 773,438 |
Mr. Samant | $ | 343,750 | 150% | $ | 515,625 | 0% |
| $ | 0 | |||||||||
Mr. Carroll | $ | 296,875 | 80% | $ | 237,500 | 0% |
| $ | 0 | |||||||||
Mr. Chase | $ | 281,250 | 80% | $ | 225,000 | 0% |
| $ | 0 | |||||||||
Mr. Janki | $ | 650,000 | 175% | $ | 1,137,500 | 93.75% |
| $ | 1,066,406 | |||||||||
Reflects base salary reductions from April 1 through December 31, 2020earned during 2021, except for Mr. Janki, whose 2021 MIP award was based on his annualized base salary
LONG-TERM INCENTIVESLong-Term Incentives
20202021 Long-Term Incentive Program
The 20202021 Long-Term Incentive Program (2020(2021 LTIP) links pay and performance by providing management employees with a compensation opportunity that aligns the interests 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 20202021 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 20192020 target award levels for the named executive officers were maintained, except for Mr. Carter, Mr. Samant and Mr. Chase.Carter. Mr. Carter’s and Mr. Samant’s target award opportunitiesopportunity under the 20202021 LTIP werewas increased in conjunction with the changes made to their target awards under the 2020 MIP to recognize their increased responsibilities and focus onhis significant contributions in implementing the company’s strategic initiatives. The increase in
Under the 2021 LTIP, Mr. Chase’s targetBastian and Mr. Hauenstein received an award opportunity was to reward his leadership in developingconsisting 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 company’s strategic partnerships.
Theremaining 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. This mix and the other terms of the 20202021 LTIP are intended to balance the performance and retention incentives with the volatility of airline stocks.
Excluding the Interim Co-Chief Financial Officers
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Performance awards are dollar-denominated long-term incentive opportunities payable in Delta stock to executive officers at or abovecash. Performance during the executive vice president level onaward’s three-year performance period is measured over the payment datefollowing two separate periods: (1) January 1, 2021 – December 31, 2021 and in cash to all other participants. The chart below shows the range of potential payments(2) January 1, 2022 – December 31, 2023. One-third of the named executive officer’s target performance awards based onaward is allocated to the 2020 LTIP’s fourfirst performance measures overperiod and the three-year period ending December 31, 2022, with payouts potentially increased or decreased based onremaining two-thirds is allocated to the company’s relative total shareholder return performance.second performance period. Any payouts under this award, (which, after taking into account any increaseincluding amounts earned under the modifier, cannot exceed 200 percent of target)first performance period in 2021, will occur in 2023.2024.
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 2021.
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For purposes of the 20202021 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 20202021 LTIP provides that restricted stock will vest in three equal installments, as follows: 50% on February 1, 2021, February 1, 2022 and 25% on each of February 1, 2023 and February 1, 2024, subject to forfeiture in certain circumstances. Restricted stock is eligible for dividends, but dividends will not become payable until the restrictions on the underlying stock lapse. Further, becauseBecause these awards were granted while Delta is restricted from paying dividends under the CARES Act, anythey are not eligible for dividends, that have accrued with respect to any outstanding restricted stockeven if dividends are later paid while these awards including under the 2020 LTIP, will not be paid until these CARES Act restrictions lapse.remain unvested. The value of an individual’s restricted stock award will depend on the price of Delta stock when the award vests.
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Stock options are inherently performance-based, as they provide realized value only if the stock price appreciates. Nevertheless, the Personnel & Compensation Committee included 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 20202021 LTIP generally provides that the performance stock options will become exercisablevest in three equal installments on the vesting dates described in the chart below, subject to the achievement of the following performance measures:
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Because our people did not receive a payout under the Profit Sharing Program for 2020, none of the named executive officers’ performance stock options under the 2020 LTIP have vested.February 1, 2022, February 1, 2023 and February 1, 2024.
For additional information about the vesting and possible forfeiture of the 20202021 LTIP awards, see “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control—Long-Term Incentive Programs” on page 49.
47.
The 20182019 Long-Term Incentive Program Payouts
In 2018,2019, the Personnel & Compensation Committee granted the named executive officersMr. Bastian, Mr. Hauenstein and Mr. Carter performance awards under the 20182019 Long-Term Incentive Program (2018(2019 LTIP). We reported these award opportunities in our 20192020 proxy statement.
The performance awards were denominated in cash but paid in shares of Delta stock to the named executive officers, other than Mr. Carroll and Mr. Chase, whose performance awards were paid in cash.officers. The payout of these award opportunities is based on the total revenue per available seat mile (TRASM) relative to the performance of an industry peer group, Delta’s customer service performance, 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, 2020.2021.
Summarized in the chart below are the performance results certified by the Personnel & Compensation Committee for the performance awards under the 20182019 LTIP and the resulting percentage of target award opportunity earned:
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Back to Contents2019 LTIP PAYOUT
This column reflects the percentage of the target award earned after application of the performance measure weightings.
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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. In February 2020, the Personnel & Compensation Committee approved an increase to certain flight benefit allowances for Mr. Bastian and Mr. Hauenstein, whose allowances had not been adjusted since 2008. See the Summary Compensation Table and the related footnotes beginning on page 4038 for information regarding benefits received in 20202021 by the named executive officers.
In recognition of the highly sought-after and transferable talents of our Chief Information Officer, and within the CARES Act compensation limitations, the Personnel & Compensation Committee approved a cash retention payment to Mr. Samant in the amount of $300,000. Under the terms of this payment, which he received in a lump sum in October 2020, Mr. Samant agreed to remain with the company until at least October 2022. In the event that he is terminated by the company for cause or resigns his employment without good reason (as those terms are defined in “Post-Employment Compensation — Potential Post-Employment Benefits upon Termination or Change in Control — Triggering Events” on page 51) prior to October 2022, he will be required to repay the company a prorated portion of the payment.
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The Personnel & Compensation Committee requested its consultant, FW Cook conduct a risk assessment of Delta’s executive compensation program. Based on this review, FW 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.
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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 consistent 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 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 |
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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, 2020,2021, all of our named executive officers exceeded their required stock ownership level, except Mr. Samant and the Interim Co-Chief Financial Officers, who first became subject to these guidelines in January 2018 and November 2020, respectively.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.
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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. As previously explained, the annual review of Mr. Bastian’s compensation for 2020 was conducted in February before the onset of the COVID-19 pandemic and following a year in which Mr. Bastian led Delta to record financial results,through a year that rivaled the challenges of 2020. The company began 2021 focused on transitioning the airline toward recovery, prioritizing safety, reliability and customer experience. Even with the headwinds of new virus variants and frequently changing travel restrictions, under Mr. Bastian’s leadership, Delta ended 2021 profitable for the second half, delivering industry-leading operational reliabilityperformance and continued improvementsachieving levels of customer satisfaction that exceeded 2019 levels.
While recognizing his exceptional achievements in customer satisfaction.
Despite the company’s successful 2019, recognizing that it increased Mr. Bastian’s base salary and his long-term incentive target award opportunities in 2018 and 2019,2021, the Personnel & Compensation Committee made no changes to Mr. Bastian’s compensation in 2020.2021. In accordance with our executive compensation philosophy and to continue the alignment of the interests of Mr. Bastian and our shareholders, the vast majority of Mr. Bastian’s compensation opportunity continues to be at risk and dependent on company and stock price performance. The reality of this risk was demonstrated in 2020, when, by the end of year, the value of the Mr. Bastian’s 2020 LTIP award decreased significantly from its grant date fair value, as shown on the “Supplemental Compensation Table for 2020” on page 39. In addition, Mr. Bastian did not receive his base salary for nine months beginning April 1, 2020.
As the following graphs illustrate, a substantial percentage of Mr. Bastian’s compensation is at-risk and concentrated in equity-based awards.
See the Summary Compensation Table and the related footnotes beginning on page 4038 for additional information about Mr. Bastian’s compensation.
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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 49.46.
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, including performance-based compensation (exceptcompensation. The inclusion of performance-based awards in the case of certain arrangements in place as of November 2, 2017). Prior to 2018, this limitation did not apply to compensation that met the tax code requirements for qualifying performance-based compensation. The elimination of the performance-based exceptionannual limit has not altered the Personnel & Compensation Committee’s commitment in this area because pay for performance is a foundational principle of our executive compensation philosophy.
Equity awards granted under our executive compensation program are expensed in accordance with Statement of Financial Accounting Standards Codification Topic 718, Stock Compensation.
Compensation Committee ReportThe 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 Sergio A. L. Rial, Chair
Executive Compensation TablesThe table below contains information about the compensation of the following named executive officers during
Summary Compensation Table
Grants of Plan-Based Awards TableThe following table provides information about annual and long-term award opportunities granted to the named executive officers during
Outstanding Equity Awards at Fiscal Year-End TableThe following table provides information regarding the outstanding equity awards on December 31,
Option Exercises and Stock Vested TableThe following table provides information regarding the exercise of stock options and the vesting of stock for the named executive officers in
Post-Employment CompensationDefined 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 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 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.
The table below shows certain pension benefit information for Mr. Bastian
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, 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.
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.
The following chart summarizes the treatment of performance awards, restricted stock and,
Delta’s
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. › 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,
A named executive officer who retires from Delta under the definition of retirement described above may continue to receive Flight Benefits (see footnote 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
Table Regarding Potential Post-Employment Benefits upon Termination or Change in Control The following table describes the termination benefits for each named executive officer, 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”
CEO Pay RatioUnder 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. For › the annual total compensation of the employee identified at median of all our employees other than our Chief Executive Officer was › the annual total compensation of our Chief Executive Officer, Ed Bastian, was › 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 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.
In identifying the median of the annual total compensation of our employees, we used the following methodology and material assumptions, adjustments, and estimates as of December 31, › Because less than 5% of our employees reside in other countries, we excluded all › After applying the de minimis exemption, we had › 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. › We annualized the compensation of permanent employees on an unpaid leave of absence during After identifying the median employee, we calculated the annual total compensation for our median employee based on the rules used for calculating our Chief Executive Officer’s compensation in the Summary Compensation Table, as required. Compensation Committee Interlocks and Insider ParticipationNone 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. (1) The non U.S. countries and the number of employees in each of those countries is as follows: Argentina - 7; Aruba – 3; Australia –
DIRECTORCOMPENSATIONNon-employee director compensation is approved by the Board of Directors, based on recommendations of the Corporate Governance Committee.
Non-employee directors are eligible to receive the following for their service on the Board of Directors:
As is common in the airline industry, Delta provides complimentary travel and certain Delta Sky 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) and the director will not receive reimbursement for taxes for Retired Director Flight Benefits. A director is not eligible to receive Retired Director Flight Benefits if the director engages in certain wrongful acts.
Director Compensation TableThe following table sets forth the compensation paid to non-employee members of Delta’s Board of Directors for
Stock Ownership GuidelinesThe 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.
The non-employee directors are also subject to the
PROPOSAL 1 — ELECTION OF DIRECTORS
We are seeking your support for the election of All Delta directors are elected annually. At the annual meeting, each director will be elected by the vote of 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 who is elected will hold office until the next annual meeting of shareholders and the election and qualification of his or her successor, or until such 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.
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| ir.delta.com | |
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’snominee'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 fourfive directors who are racially or ethnically diverse and twothree female directors.
TheBoardbelievesthatthecombinationofbackgrounds,skillsandexperiencesofthenomineesproducesaBoardthatiswell-equippedtoexerciseoversightresponsibilitiesonbehalfofourshareholdersandotherstakeholders.Inadditiontothechartabove,weprovideinformationonthefollowingpagesabouteachnomineefordirector,includingcertainexperiencesthatledtheBoardtoconcludethenomineeshouldserveasadirectorofDelta.
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 | THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING NOMINEES: |
| EDWARD H. BASTIAN | |||
Age: 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)
| Member, Board of Trustees of The Woodruff Arts Center
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| FRANCIS S. BLAKE | |||
Age: 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 | |||
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: 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 | |||
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
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| ir.delta.com | |
| 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: Joined Delta’s Board: Committees:
| 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 | |||
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
| Member, National Security Telecommunications Advisory Committee | ||
| 2022 PROXY STATEMENT | 57 |
| WILLIAM H. EASTER III | ||
Age: 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.
Concho Resources, Inc. (2008 - 2021)
| 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: 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 | |
| MICHAEL P. HUERTA | |||
Age: 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 | ||
| JEANNE P. JACKSON | |||
Age: 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 | |||
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 | AFFILIATIONS: Member, Foundation Board of Trustees of U.S. Ski & Snowboard Association | ||
| 2022 PROXY STATEMENT | 59 |
| GEORGE N. MATTSON | |||
Age: Joined Delta’s Board: Committees:
| BIOGRAPHY: | ||
Mr. Mattson is | |||
| 2002, prior to which he held various sales and marketing positions at IBM Corp. from 1987 to 1993. QUALIFICATIONS: | |||
Mr. Mattson has experience in | |||
| 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
Operating Partner, Star Mountain Capital
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| SERGIO A. L. RIAL | |||
Age: Joined Delta’s Board: Committees: | BIOGRAPHY: | ||
Mr. Rial | |||
QUALIFICATIONS: | |||
Mr. Rial has extensive managerial and board-level experience | |||
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) | ||
Banco Santander Brasil is a consolidated subsidiary of Banco Santander, holding 90% of its voting stock and contributing 30% of the profit attributable to the consolidated entity in 2020. Accordingly, we view service in these related directorships as consistent with our Corporate Governance Principles as well as investor and proxy advisor policies regarding public board commitments while serving in a chief executive officer role.
| ir.delta.com | 2022 PROXY STATEMENT | 60 |
| DAVID S. TAYLOR | |||
Age: Joined Delta’s Board: August 7, 2019 Committees: Finance; | BIOGRAPHY: | ||
Mr. Taylor is Executive Chairman of the Board | |||
QUALIFICATIONS: | |||
Mr. Taylor has extensive leadership experience, including as the | |||
PUBLIC DIRECTORSHIPS: | |||
The Procter & Gamble Company | AFFILIATIONS: Member, Board of US-China Business Council Member, Board of
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| KATHY N. WALLER | |||
Age: Joined Delta’s Board: Committees: | BIOGRAPHY: | ||
Ms. Waller | |||
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.
| 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 | |||
| |
 | WHAT AM I VOTING ON? |
WeAs 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 20202021 reflects the following principles of our executive compensation program:
Links pay with performance by placing a substantial majority of total compensation at risk.
For 2020,2021, at-risk compensation constituted 94% of the targeted compensation for the Chief Executive Officer and 90% for the other named executive officers (excluding the Interim Co-Chief Financial Officers).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, with incentive plans structured to ensure that executives do not receive full incentive payouts unless Delta people also receive payment under the Profit Sharing Program for the year.
The Personnel & Compensation Committee exercised its discretion and eliminated payouts under the 2020 annual incentive plan, notwithstanding the attainment of certain performance measures, because there were no payouts under the Profit Sharing Program for 2020. Similarly, none of the named executive officers’ 2020 performance stock options vested as a result of the absence of a payout under the Profit Sharing Program.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 taketaking 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 | |
| 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 until the next annual meeting.auditors. The Audit Committee of the Board of Directors has appointed Ernst & Young LLP (EY) as Delta’s independent auditors for 2021,2022, subject to ratification by our shareholders.
Representatives of EY, which also served as Delta’s independent auditors for 2020,2021, 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 2021,2022, 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. |
| |
The following table shows the aggregate fees and related expenses for professional services rendered by Delta’s independent auditors for 20202021 and 2019.2020.
Description of Fees | Amount 2020 ($) | Amount 2019($) | Amount 2021($) | Amount 2020($) |
Audit Fees(1) | 5,718,000 | 4,524,000 | 4,073,000 | 5,718,000 |
Audit-Related Fees(2) | 452,000 | 486,000 | 699,000 | 452,000 |
Tax Fees(3) | 647,000 | 991,000 | 365,000 | 647,000 |
All Other Fees(4) | 8,000 | 8,000 | 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); 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 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. | ||||
(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. | (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 | |
The Audit Committee presently consists of five 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 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. 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 applicable 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 20202021 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 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, including challenges resulting from the remote working environment;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; the use of non-GAAP measures;investments; critical audit matters; and tax matters.
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 20202021 Form 10-K filed with the SEC. The Audit Committee also appointed EY as Delta’s independent auditors for 2021,2022, subject to shareholder ratification.
William H. Easter III, Chair
Ashton B. Carter
David G. DeWalt
Michael P. Huerta
Kathy N. Waller
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Proposal 4 — SHAREHOLDER PROPOSAL – RIGHT TO ACT BY WRITTEN CONSENT— LOBBYING REPORT
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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, 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 - Adopt a Mainstream Shareholder Right – Written ConsentTransparency in Lobbying
Shareholders request that our boardWhereas, I believe in full disclosure of directors take such steps as may be necessaryDelta’s direct and indirect lobbying activities and expenditures to permit written consent by the shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consentassess whether its lobbying is to give shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder abilityits 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 Delta 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 initiate any appropriate topic for written consent.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.
This proposal topic won 95%-supportBoth “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at Dover Corporationthe local, state and 88%-support at AT&T. This proposal topic also won our 46%-support at our 2020 annual meeting. This 46%-support may have represented a majority vote from the shares that had access to independent proxy voting advice. Retail shareholders typically do not have access to independent proxy voting advice.federal levels.
The 2020 proposal on this same topic was one of 2 proposals that each won 46% shareholder support atreport shall be presented to the 2020 annual meeting.
The other 2020 proposal was Proposal 6 — Political Spending Disclosure Shareholder Resolution is available at page 65 here: https://www.sec.gov/Archives/edgar/data/27904/000130817920000240/ldal2020_def14a.htm#5241281637716241:1129106
This Political Spending Disclosure would make our directors’ job easier and more effective. I hope these 2 proposals were part of the “Investor Engagement Efforts” at Delta in 2020. “Investor Engagement Efforts” was the title of a large font heading in the Delta 2020 annual meeting proxy. Mr. Francis Blake is the Chair of the DeltaCorporate Governance Committee and this wouldposted 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 spend millions on lobbying and undisclosed grassroots activity. These groups may be partspending “at least double what’s publicly reported.”(1) Delta has third party lobbying disclosure gaps, failing to disclose its payments to trade associations and SWGs or the amounts of his responsibility.its payments to SWGs used for lobbying, including grassroots, and leaving out memberships in trade associations like the Georgia 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 altogether spent $207,814,400 on federal lobbying for 2019 and 2020.
Any action taken by written consent would still need almost 100% supermajority approval fromDelta’s lack of lobbying disclosure presents reputational risks when its lobbying contradicts company public positions or takes controversial positions. Delta is committed to protect worker health and safety, yet its CEO lobbied to cut COVID quarantine time for employees.(3) Delta’s lobbying against limiting baggage and ticket change fees has attracted scrutiny.(4) While Delta believes in addressing climate change, the shares that normally cast ballots atChamber and BRT have lobbied against passage of landmark climate legislation.(5) And Delta has spoken out against state voter restrictions, yet the Delta annual meeting to equal a majority fromChamber lobbied against the DAL shares outstanding since about 50% of DAL shareholders do not vote. At a special shareholder meeting only a 51%-vote is needed.
A cornerstone ofFor the 2020 management resistance to shareholder written consent was that, with special shareholder meetings, instead of written consent, there is the “transparency” of the “special meeting process.”
This “transparency” has been completely blown out of the water in 2020 with the near extinction of in-person shareholder meetings.
With tightly controlled online annual shareholder meetings meaningful opportunities to raise important matters can be severely restricted because all constructive shareholder questions and comments can be easily screened out by management.
At the 2020 Delta online shareholder meeting it was easy for management to cover up that Mr. Sergio Rial, who was “expected to become the Delta Chair upon Mr. Carp’s retirement,” received by far the highest negative votes of any Delta director — 10-times the negative votes of each of 6 of his Delta director peers.People Act.(6)
Please vote yes:
AdoptaMainstreamShareholderRightProposal 4 -WrittenConsent-Proposal4 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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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. When we engaged with shareholders on this topic, a number indicated to us that they do not support the proposal and some indicated that they are in favor. On balance, the Board continues to believe 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 more than 20% of outstanding common stock have the ability to call special meetings of shareholders;
No shareholder rights plans or super-majority voting;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.
ShareholdersHaveUnderlying this significant voluntary disclosure, we comply with theAbilitytoRaiseMatters extensive federal, state andActOutsidetheAnnualMeetingCycle. In addition local laws and regulations governing lobbying activities to which Delta is subject as described in our 2021 Political Contributions & Activity Report. We include links to reports we file in compliance with federal and state requirements in our Political Contributions & Activity Report. Any lobbying firms we hire are also required to file similar reports, and the abilitytrade associations we belong to present matters at annual meetings, the right ofare 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 who wish to call a special meeting, along withlearn more about Delta’s established shareholder communicationengagement in advocacy 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.
These rights and practices provide meaningful, year-round opportunities for shareholders to bring matters to the attention of company management, the Board and otherits shareholders.
OurCurrentPracticesAreEfficientandProtectAllShareholders. The transparency of the annual and special meeting process offers important protections and advantages for shareholders that are absent from a 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 well-informed consideration on the merits of the proposed actions. Shareholder meetings provide allshareholders with a forum for 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.
TheProposalCouldDisenfranchiseShareholders. 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 stock to take significant corporate action:
without a known place and time for the proposal to be voted on that is publicly announced to all shareholders in advance, and
without giving all shareholders an opportunity to consider, express their views 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.
Inhissupportingstatement,Mr.CheveddenincorrectlyindicatesthatSergioRialwasexpectedtobecometheDeltaChairfollowingthe2020meeting.Mr.BlakehasbeentheChairoftheBoardsince2016andcontinuesinthatrole.Mr.CarpretiredaschairofthePersonnel&CompensationCommitteein2020andMr.RialsucceededMr.Carpinthatrolefollowingthe2020meeting.
In summary, the Board continues to believe that the strong corporate governance practices already in place at Delta, including the shareholders’ ability to call a special meeting, and our 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 consent is neither necessary nor in the shareholders’ best interests.
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Proposal 5 — SHAREHOLDER PROPOSAL - CLIMATE LOBBYING REPORT
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A shareholder has submitted a proposal requesting that the Board of Directors issue a climate lobbying report.TheBoardrecommendsthatyouvoteAGAINSTthisproposal.
BNP Paribas Asset Management has represented that it has beneficially owned the requisite amount of our common stock for more than one year, has submitted the following proposal and supporting statement and has notified us that a representative intends to present the proposal set forth below at the annual meeting.
ClimateLobbyingReport
Shareholders request that the Board of Directors conduct an evaluation and issue a report within the next year (at reasonable cost, omitting proprietary information) describing if, and how, Delta Air Lines’ lobbying activities (direct and through trade associations and social welfare and nonprofit organizations) align with the Paris Climate Agreement’s goal of limiting average global warming to well below 2 degrees Celsius, and how the company plans to mitigate risks presented by any such misalignment.
SupportingStatement
According to the most recent annual “Emissions Gap Report” issued by the United Nations Environment Programme (December 9, 2020), critical gaps remain between the commitments national governments have made and the actions required to prevent the worst effects of climate change. Companies have an important and constructive role to play in enabling policy-makers to close these gaps.
Corporate lobbying activities that are inconsistent with meeting the goals of the Paris Agreement present regulatory, reputational and legal risks to investors. These efforts also present systemic risks to our economies, as delays in implementation of the Paris Agreement increase the physical risks of climate change, pose a systemic risk to economic stability and introduce uncertainty and volatility into our portfolios. We believe that Paris-aligned climate lobbying helps to mitigate these risks, and contributes positively to the long-term value of our investment portfolios.
Of particular concern are the trade associations and other politically active organizations that speak for business but, unfortunately, too often present forceful obstacles to progress in addressing the climate crisis.
As investors, we view fulfillment of the Paris Agreement’s agreed goal–to hold the increase in the global average temperature to “well below” 2°C above preindustrial levels, and to pursue efforts to limit the temperature increase to 1.5°C - as an imperative. We are convinced that unabated climate change will have a devastating impact on our clients, plan beneficiaries, and the value of their portfolios. We see future “business as usual” scenarios of 3-4°C or greater as both unacceptable and uninvestable.
We commend Delta Air Lines for responding to CDP’s annual climate change survey, including information on the company’s direct (in the company’s name) and indirect (through trade associations and other organizations) lobbying efforts related to climate change and their consistency with corporate policy. Two hundred institutional investors managing $6.5 trillion wrote to Delta in 2019, seeking an answer to a different question: How does Delta work to ensure that its direct and indirect lobbying activities align with the Paris Agreement’s goals, and what does the company do to address any misalignments it has found? The investors received no response to their letter.
Thus, we urge the Board and management to assess the company’s climate related lobbying and report to shareholders. Last year, this proposal received a 46% vote at Delta’s annual meeting.
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The Board of Directors believes that Delta’s lobbying efforts remain clearly aligned with responsible climate action, including the reduction of carbon emissions from aviation. For years, Delta has setshould be an industry-leading course of action with respect to environmental sustainability. In February 2020, we announced our commitment of $1 billion during the next ten years on our journey to become the first carbon-neutral airline globally. Our focus and commitment are clear, and lobbying efforts and environmental policies are transparent. Delta has discussed this topic with shareholders during regular engagement to understand the various perspectives that our diverse shareholder base has on climate change and environmental sustainability issues. With those viewpoints in mind, the proposal does not advance the interests of Delta’s shareholders beyond the steps we have already taken and are continuing to take.
Deltahaslongbeenaleaderinenvironmentalsustainability,andweremaindeeplycommittedtoour10-yearplantoinvest$1billiontowardcarbonneutrality.
From being the first and only U.S. airline to voluntarily cap greenhouse gas emissions at 2012 levels to our 2020 commitment to be the first carbon-neutral airline globally, Delta has a longstanding commitment to sustainable air travel. Throughout the COVID-19 pandemic, Delta has stood by our $1 billion commitment, reiterating our focus on combating climate change. In the short term, Delta intends to achieve carbon neutrality by directly reducing carbon dioxide emissions through fleet and operational efficiencies and addressing remaining emissions through carbon offset project investments such as those that maintain and protect forests. To that end, Delta is addressing the 13 million metric tons of carbon dioxide emissions from our airline business between March 1 through December 31, 2020 through carbon offset projects.
As described furthereffective participant in the summary to this proxy statement, Delta’s holistic environmental sustainability plan is focused on carbon reductionpolitical process, including through lobbying activities and removal, stakeholder engagement and coalition building. Beyond replacement of retiring aircraft with new, more fuel-efficient aircraft, we are evaluating opportunities relating to potentially transformative technologies such as sustainable aviation fuel and carbon capture and storage technology. In an effort to broaden the availability of these technologies, Delta aims to build coalitions with suppliers and other industry participants to drive down the cost and increase the consumption and production of transformative technologies. For instance, we have executed agreements with multiple corporate customers to purchase SAF facilitated by Delta.
Delta’s long-term vision is zero-impact aviation: air travel that does not damage the environment directly or indirectly via greenhouse gas emissions, noise, waste generation or other environmental impacts. We believe achievement of this goal will require significant capital investment, support from government partners, research and development from manufacturers and evolution of some of the world’s largest industries, and we are firmly committed to supporting these efforts.
Delta’slobbyingeffortsareclearlyalignedwithresponsibleclimateaction,includingthereductionofcarbonemissionsfromaviation.Delta has focused our emissions lobbying efforts through the International Air Transport Association (IATA), Airlines For America (A4A) and the U.S. government. This is where we believe we can have a positive impact on carbon emission issues that affect our industry and create consistent regulation across our operations. Members of these industry associations, including Delta, have recognized for years the need to address the global challenge of climate change.
In addition to Delta’s emissions reduction efforts, Delta has engaged with IATA, A4A and the U.S. government to ensure the International Civil Aviation Organization (ICAO) process and the Carbon Offset and Reduction Scheme for International Aviation (CORSIA) include our philosophy to address emissions. As described further in our Annual Report on Form 10-K, we are actively participating through monitoring, reporting and verification of emissions and through the ICAO Committee on Aviation Environmental Protection working groups. Delta is also engaging with A4A on federal incentives to advance efforts to bring sustainable aviation fuel to scale.
In general, Delta’s participation in trade and industry associationsassociations. Our business is subject to extensive regulations in the United States and abroad, which have a significant impact on our business. As a leader in the aviation industry, our participation in advocacy activities allows us to advocate for our policy positions, share our views andbusiness expertise and influencebe part of public education efforts regarding issues facing our industry and the positionsbusiness community. We participate in trade and industry associations that may support our public advocacy efforts and are also a member of these organizations. Delta doesvarious chambers of commerce at the state and local level. While we do not always agree with the positionsviews of every trade,these groups, we are fully committed to engaging in the collaborative problem-solving process and to working with our industry or policy organizationpeers in which it participates. Engaging onlythese 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 with organizations that align with Delta’s positions and publicly stated goals would undermine our ability to build and expand support for our positions and goals, including support for our efforts to become carbon neutral and work towards zero impact aviation. Subsequent to receiving this proposal for the 2020 meeting and again for this year’s annual meeting, Delta has discussed our sustainability efforts and strategy and our lobbying efforts with the proponent.
Delta’slobbyingeffortsandenvironmentalpoliciesaretransparent.ample information regarding Delta’s lobbying activities are subject to comprehensive regulation at bothactivities. Accordingly, the federal and state levels. Federal law requiresBoard believes that the filing of regular, detailed reports with the U.S. Senate and the U.S. House of Representatives disclosing general and specific lobbying activities that are undertaken on our behalf, which are publicly available. State lobbying activities also are subject to detailed registration and disclosure requirements, and such reports are also publicly available through the applicable state authorities. Delta’s Carbon Emissions Policy and Environmental Policy are publicly available on delta.com at https://www.delta.com/sustainability.
As a result of Delta’s leadershipreport requested in the airline industry on climate action, our commitmentproposal would require company time and resources while providing only minimal additional information to become the first global carbon neutral airline and aspiration to achieve zero-impact aviation, and our responsible and transparent lobbying efforts on environmental matters,shareholders. For these reasons, the Board does not believehas concluded that this proposal is necessary.neither necessary nor advances the interests of Delta’s shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
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(1) 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 (2) 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 20202021 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 7, 2021.6, 2022.
The Board of Directors set April 30, 202129, 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, 2021, 639,646,87322, 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 (Pilot Plan);
common stock allocated to your account under the Delta 401(k) Retirement Plan or the Delta 401(k) Retirement Plan for Ready Reserves (collectively referred to as the 401(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. 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 74.69.
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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 401(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 covered by the same control number before 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,instructionsregardingsharesheldinyourPilotPlanaccountorallocatedtoyour401(k)RetirementPlansaccountmustbereceivedbefore5:00 p.m.EasternDaylightTimeonJune15,2021. 14, 2022. Instructionsregardingregisteredsharesorunvestedrestrictedcommonstockmustbereceivedbefore11:59 p.m.EasternDaylightTimeonJune16,2021. 15, 2022.
You may also vote registered shares by attending the annual meeting and voting via the online voting platform;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 401(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 401(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 75.70. 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.
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.card or by voting in person at the annual meeting. Ifyouholdyoursharesinstreetname,andintend it is critical that you provide instructions to,vote or otherwise follow the instructions provided to you inadvance the Notice, voting instruction form or other information provided to you by the broker, bank or other nominee that holds your shares, if you want your shares to count in the election oftheannualmeeting,whichweencourageyoutodo,itiscriticalthatyouprovideinstructionsto,orotherwisefollowtheinstructionsprovidedtoyouintheNotice,votinginstructionformorotherinformationprovidedtoyoubythebroker,bankorothernomineethatholdsyourshares,ifyouwantyoursharestocountintheelectionofdirectors(Proposal (Proposal 1),theadvisoryvoteonexecutivecompensation(Proposal (Proposal 2)andtheshareholderproposals(Proposals4and5) 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 401(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,revocationofinstructionsregardingsharesheldinPilotPlanaccountsorallocatedto401(k)RetirementPlansaccountsmustbereceivedbefore5:00 p.m.EasternDaylightTimeonJune15,2021. 14, 2022. Revocationofinstructionsregardingregisteredsharesorunvestedrestrictedcommonstockmustbereceivedbefore11:59 p.m.EasternDaylightTimeonJune16,2021. 15, 2022.
You may also revoke your proxy covering registered shares by attending the annual meeting and voting via the online meeting platform.in person by ballot. Attending the meeting virtually 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 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 4 and 5.4. 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, 20202022 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 proposalsproposal 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.
The Board of Directors is soliciting your proxy to vote your shares at the Annual Meeting as follows:
FOR the election of the director nominees named in this proxy statement;
FOR the approval, on an advisory basis, of the compensation of Delta’s named executive officers; and
FOR the ratification of the appointment of Ernst & Young LLP as Delta’s independent auditors for the year ending December 31, 2021.2022.
AGAINST the shareholder proposalsproposal described in this proxy statement.
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.
We plan to hold our annual meeting virtually in an effort to enhance the ability of our shareholders around the world to attend and participate, particularly in light of the COVID-19 pandemic. To attend and participate in the annual meeting, shareholdersyou will need to access the live audio webcastshow you are either a Delta shareholder as of the meeting by visiting www.virtualshareholdermeeting.com/DAL2021 and using the 16-digit control number provided in the Noticerecord date, or hold a valid proxy card to log in to the meeting website. Any shareholders holdingfrom such a Delta shareholder.
If your shares are registered in street name, that do not receiveor are held in a 16-digit control number should contact their bank, brokerPilot Plan or other nominee (preferably at least 5 days before401(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 annual meeting) in order to request a control number and be able to attend, participate in or voteholders of unvested restricted common stock at the annual meeting.
All shareholders should also bring valid picture identification (employees may use their Delta-issued identification card). If you do not have a 16-digit control number at the time of the meeting,valid picture identification and proof that you own Delta stock, you may still attend the meeting as a guest in listen-only mode, although guests willnot be unable to vote or submit questions.
We encourage shareholders to log inadmitted to the meeting website and accessmeeting.
In addition, the webcast before the annual meeting’s start time. We plan to have technicians ready to assist you with any technical difficulties you may have accessing the virtual meeting. If you encounter any difficulties accessing the virtual meeting during check-in or during the meeting, please call the technical support number that will be posted on the virtual shareholder meeting login page: www.virtualshareholdermeeting.com/DAL2021.
We are committed to ensuring that shareholders will be afforded the same rights and opportunities to participate as they would at an in-person meeting. Our directors and various members of our management team will join the virtual meeting and be availablevenue for questions. Shareholders may submit questions during the meeting through the virtual meeting platform at www.virtualshareholdermeeting.com/DAL2021. We intend to answer all relevant questions submitted in accordance with the rules of conduct for the meeting, which we will post in advance of the meeting. We ask that shareholders limit themselves to one question each and provide their name and contact details when submitting a question through the virtual meeting platform. If we receive substantially similar questions, we will group them together and provide a single response to avoid repetition. We plan to address as many questions during the meeting as time permits, but if there are any relevant questions submitted in accordance with the rules of conduct that we are unable to answer due to time constraints, we intend to post answers to those questions on our investor relations website following the meeting.
Further instructions on how to attend, participate in and vote at the annual meeting virtually, including howrequires proof of COVID-19 vaccination for entry. The CDC considers individuals to demonstrate your ownershipbe “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 our common stock asvaccination 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 record date, are availableprior 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 www.virtualshareholdermeeting.com/DAL2021.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.
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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 $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.
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Delinquent Section 16(a) ReportsBack to Contents
Section 16(a) of the 1934 Act and related regulations require our directors, executive officers, and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the SEC. To assist with these required reports, we have established procedures whereby we receive relevant information regarding the transactions of our directors and executive officers in our equity securities and we prepare and file the ownership reports on their behalf.
We have reviewed all ownership reports filed electronically with the SEC since January 1, 2020. Based on that review and on written information given to us by our directors and executive officers, we believe that all such required reports for our directors and executive officers were filed on a timely basis under Section 16(a), except for (i) a Form 4 for Mr. Peter Carter filed on December 17, 2020 with respect to a withholding transaction for shares of restricted common stock that vested on December 4, 2020, and (ii) a Form 4 for Mr. Bellemare filed on January 28, 2021 as a result of a delay in receipt of SEC filing codes and related to a grant of restricted common stock made on January 25, 2021.
To be considered for inclusion in our proxy statement for the 20222023 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 7, 2022,6, 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 20222023 annual meeting must be received by us at the address above no earlier than December 8, 20217, 2022 and no later than January 7, 2022.6, 2023.
In addition, a shareholder may only bring business before the 20222023 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 17, 202216, 2023 and March 19, 202218, 2023 (subject to adjustment if the date of the 20222023 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.
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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.
Statements in this proxy statement that are not historical 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. KnownWe describe known material risk factorsrisks and uncertainties applicable to Delta are describedthat could cause actual results and events to differ materially in “Item 1A. Risk Factors” of our Annual Reportmost recently filed periodic reports on Form 10-K, forForm 10-Q and subsequent filings, including under the fiscal year ended December 31, 2020, other than risks that could apply to any issuer or offering.heading “Risk Factors.” All forward-looking statements speak only as of the date made, and we undertake no obligation to publicly update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this report except as required by law.
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Supplemental Information about Non-GAAP 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. 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 a reconciliation of free cash flow, the non-GAAP financial measure usedWebsite links included in this proxy statement toare for convenience only. The content of any website link and the most directly comparable GAAP financial measure. The reconciliation maymaterials and reports available on or through them are not calculate correctly due to rounding.
We present free cash flow because management believesincorporated by reference into this metric is helpful to investors to evaluate the company’s ability to generate cash that is available for use for debt service or general corporate initiatives. Adjustments include:
NET PURCHASES OF SHORT-TERM INVESTMENTS
Net purchasesproxy statement and do not constitute a part of short-term investments represent the net purchase and sale activity of investments and marketable securities in the period, including gains and losses. We adjust for this activity to provide investors a better understanding of the company’s free cash flow generated by our operations.
STRATEGIC INVESTMENTS AND RELATED
Cash flows related to our investments in and related transactions with other airlines are included in our GAAP investing activities. We adjust for this activity because it provides a more meaningful comparison to our airline industry peers.
NET CASH FLOWS RELATED TO CERTAIN AIRPORT CONSTRUCTION PROJECTS
Cash flows related to certain airport construction projects are included in our GAAP operating activities and capital expenditures. We have adjusted for these items, which were primarily funded by cash restricted for airport construction, to provide investors a better understanding of the company’s free cash flow and capital expenditures that are core to our operational performance in the periods shown.
Free cash flow is adjusted for hedge margin and other as we believe this adjustment removes the impact of current market volatility on our unsettled hedges and allows investors to better understand and analyze our core operational performance.
2017 PENSION PLAN CONTRIBUTION
In 2017, we contributed $2 billion to our pension plans using net proceeds from our debt issuance. We adjusted free cash flow to exclude this contribution to allow investors to understand the cash flows related to our core operations in the periods shown.
(in billions) |
| 5 Years Ended December 31, 2019 |
Net cash provided by operating activities | $ | 35.5 |
Net cash used in investing activities |
| (20.5) |
Adjusted for: |
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Net purchases of short-term investments | (1.1) | |
Strategic investments and related | 2.2 | |
Net cash flows related to certain airport construction projects | 0.8 | |
Hedge margin and other | (0.8) | |
2017 pension plan contribution | 2.0 | |
FREE CASH FLOW | $ | 18.1 |
proxy statement.
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