Southwest CEO’s bonus rises despite holiday meltdown

BLOOMBERG

Southwest Airlines Co, which promised to cut bonus payments after a late-December meltdown in flight operations, boosted short-term incentive pay for its chief executive officer and chief operations officer.
CEO Bob Jordan’s bonus for 2022 rose 89% to $195,720, according to a regulatory filing by the Dallas-based airline. He received more than $5.3 million in total compensation last year, up from about $3 million in 2021 when he served as executive vice president. Chief Operating Officer Andrew Watterson also received a higher bonus, but lower total compensation. The bonus hikes come after the airline in February pledged a hair cut in incentive pay for senior management after holiday chaos that affected more than 2 million travellers.
A company representative defended the bonus payments, which were made in March. “For both Bob and Andrew, those increases were just to account for the additional responsibility” linked to job promotions in the year, said spokesman Chris Mainz.
Compensation, including salary, stock awards and other benefits, declined for the carrier’s other top executives. Southwest said overall short-term cash bonuses tied to company and personal performance paid out at 69.9% of original targets for all executives, due in part to the mass flight cancellations at year-end. Financial, on-time performance and customer satisfaction ratings “all fell significantly lower” on an annual company scorecard tied to executive pay, said the spokesman.
The bonus payment for Watterson, who took the COO job in October 2022, rose 17% to $110,535. But bonuses declined for Chief Financial Officer Tammy Romo and former CEO Gary Kelly, who became executive chairman in February 2022.
Watterson’s total compensation fell to $2.6 million from $2.8 million in 2021, while Romo received $2.8 million, a drop from $3.1 million the prior year. Kelly received $5.1 million, compared with $5.8 million a year earlier.