Southwest Airlines Co. gave its top executive nearly $1.6 million in total compensation last year, about 2 percent lower than the year before, according to an Associated Press analysis of a regulatory filing Friday.
The biggest chunk of CEO Gary Kelly's compensation came in the form of a $590,000 bonus last year, up 28 percent from 2008. He also received stock options valued at $462,990 on the day they were granted, down 24 percent from a year earlier.
Kelly received a base salary of $441,750 last year, only slightly higher than the $441,121 he made in 2008. The airline was one of only three domestic carriers that reported a profit in 2009, continuing an annual-profit streak that started in 1973.
The executive saw the value of his perks fall 24 percent to $58,344. Perks for Kelly last year included company contributions to his 401(k) plan and a profit sharing plan, insurance payments, medical and dental reimbursements for Kelly and his family and travel benefits.
The value of travel benefits is based on the average passenger fare for all Southwest flights during the year and assumes that the executive took the place of a paying passenger who otherwise would have used the seat.
Kelly also received above-market earnings on deferred compensation in 2009 of $6,347.
The other airlines posting profits last year were JetBlue Airways and AirTran. The president and CEO of JetBlue saw his total compensation package jump 67 percent in 2009, while AirTran also raised the compensation package of its top executive by 30 percent, according to an AP analysis.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, bonus, performance-related bonuses, perks, above-market returns on deferred compensation and the estimated value of stock options and awards granted during the year. The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
Throughout its history, Southwest has grown rapidly and pushed into new markets. Last year, however, it eliminated many unprofitable flights and reduced the number of its available seats by 5.1 percent compared with 2008. Kelly said the company has no plans for growth in 2010.
Southwest's shares rose 33 percent last year to close out 2009 at $11.43. The stock closed Thursday at $13.54.