Southwest CEO Robert Jordan got a bonus increase in 2022.
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Southwest Airlines
Chief Executive Officer Robert Jordan got a pay increase for 2022 despite the December chaos that saw thousands of flight cancellations and pledges by the air carrier to cut bonus pay.
According to a filing with the Securities and Exchange Commission, Jordan’s total compensation in 2022 was $5.3 million, compared with his total $3 million pay in 2021. His bonus in 2022 jumped to $195,720 from $103,481 the year before.
In December, Southwest canceled thousands of flights following a major winter storm. According to the company’s fourth-quarter earnings, the operational disruptions incurred an estimated negative revenue impact in the range of $300 million to $350 million in first quarter 2023.
Southwest said back in February that company leaders would see pay cuts and bonuses would be reduced following the disruptions, according to Bloomberg. But Jordan’s bonus and total compensation increase does not follow that promise.
Southwest did not immediately respond to a Barron’s request for comment. Jordan took the helm of CEO in February 2022 and the company said in the filing that Jordan’s base pay had been increased to compensate him for his “significant added responsibilities as Chief Executive Officer and to more closely align his base pay with his predecessor’s base pay. ”
A spokesperson told MarketWatch that Jordan’s cash bonus would have been larger without the December disruptions due to customer-satisfaction and lower scores for financial performance, but the cancellations did not affect his other compensation.
Southwest has been working to make right the chaos of the holiday season and prevent that from occurring again. The company unveiled a tactical action plan to boost its operational resiliency in March, which includes accelerating investments of $1.3 billion to upgrade tech systems and addressing challenges with winter equipment.
Shares of Southwest have fallen 6.2% this year.
Write to Angela Palumbo at [email protected]
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