Friday Flyer

Research evidence excerpt

Friday Flyer

Airlines

Domestic Airlines - Market Weight

Legacy Airlines - Market Overweight

Friday Flyer June 5, 2026

Follow the Money - Our Annual Airline Proxy Review

The Wolfe Byte

In today's Flyer, we review each airline's proxy statement and summarize key changes to executive compensation

metrics.

●Airline Proxy Scrub. Compensation metrics vary across the airlines, and changes to comp plans were mixed in

2025 with some airlines making large-scale changes and other airlines making minimal or no changes at all. See

Exhibits 1-3 below for a full summary by airline.

●Legacy Airlines. For the 5th straight year, DAL's comp structure was largely unchanged, with short-term comp

based on pre-tax income and operational performance, and long-term comp based on free cash flow and relative

TRASM. So, DAL remains the only airline with long-term comp tied to free cash flow. Meanwhile, AAL added pre-

tax income as a driver of short-term comp and EPS growth as a driver of long-term comp, while relative EBITDAR

margins (vs. DAL and UAL) remain the biggest component of AAL's long-term comp. Lastly, UAL made a small

tweak to long-term comp, replacing ESG and DEI targets with strategic initiatives related to technology, while

maintaining relative pre-tax margins and absolute EPS as the other drivers of long-term comp.

●Domestic Airlines. LUV continues to base 100% of long-term comp on ROIC, but shifted its short-term comp

targets from EBITDA and customer complaints to operating margins and WSJ rankings. Meanwhile, ALK remains

focused on pre-tax profit for short-term comp and added HA synergy capture as a new component in short-term

comp, while 100% of its long-term comp remains tied to ROIC. Lastly, JBLU shifted short-term comp from pre-