Southwest Airlines CEO Robert Jordan’s total compensation almost doubled to $5.3 million last year despite the company having to apologize to tens of thousands of customers who were stranded at airports nationwide due to a systemwide meltdown during the Christmas holiday season.
The Dallas-based airline disclosed in a proxy filed on Thursday that the estimated value of Jordan’s compensation rose from $3 million in 2021, when he was executive vice president.
In 2022, Jordan received stock awards valued at $3.6 million, $676,875 in salary, a $195,720 cash bonus and $782,880 in incentive compensation, plus retirement-plan benefits.
The eventual value of the stock awards will depend on the company’s financial performance from 2022 through 2024.
A Southwest spokesman told the Associated Press that Jordan’s cash bonus would have been larger without the December disruptions because of lower scores for financial performance and customer-satisfaction, but the cancellations did not affect his other compensation.
Over the holiday travel season this past December, more than 17,000 Southwest flights were canceled over the course of the last 10 days of December due to what company officials said was the result of its aging information technology system.
Several airlines canceled flights just before Christmas due to a winter storm, but it took Southwest longer to recover due to mix-ups with the crew-scheduling system.
The airline said the breakdown cost it about $800 million in lost revenue in the fourth quarter and up to $350 million more early this year.
Earlier this year, Johnson announced that the company was budgeting more than $1 billion toward upgrading its IT systems.
The airline informed passengers that it had hired transportation consulting firm Oliver Wyman to analyze what went wrong and to recommend changes.
Bonuses declined for three other executives listed in the proxy, but Chief Operating Officer Andrew Watterson — who, like Jordan, got promoted last year — got a larger bonus than in 2021.
Dallas-based Southwest earned $539 million last year despite a $220 million fourth-quarter loss. It posted record revenue of $23.8 billion and retained its investment-grade credit ratings.
Jordan has apologized several times for the holiday meltdown.
The airline has announced steps to avoid a repeat, including adding more deicing equipment and staff at key airports and improving its crew-scheduling technology.
Shares of Southwest were largely unchanged from Thursday. The stock was at $31.59 a share as of 12:54 p.m. Eastern time on Friday.
With Post Wires
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