UNITED STATES

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

SCHEDULE 14A
(RULE 14A-101)

 

INFORMATION REQUIRED IN
PROXY STATEMENT
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934

 

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Check the appropriate box:
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	Definitive Proxy Statement
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	Soliciting Material Pursuant to § 240.14a-12

 

 

DELTA AIR LINES, INC.

 

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check all boxes that apply):
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NOTICE OF THE ANNUAL MEETING OF SHAREHOLDERS

 

 

 

 

In addition, we will transact any other business properly presented at the meeting, including any adjournment or postponement by or at the direction of the Board of Directors.

A list of shareholders entitled to vote at the meeting will be available for examination during normal business hours for ten days before the meeting at Delta’s Investor Relations Department, 1030 Delta Boulevard, Atlanta, Georgia 30354. The shareholder list will also be available at the meeting.

If you plan to attend the meeting, please see the instructions on page 71 of the attached proxy statement. The venue for the annual meeting requires proof of COVID-19 vaccination for entry, please see page 71 for more details. If you need special assistance at the meeting because of a disability, contact Investor Relations at (866) 715-2170.

We encourage shareholders to sign up to receive future proxy materials electronically, including the Notice Regarding the Availability of Proxy Materials. To sign up, visit http://enroll.icsdelivery.com/dal.

 

The Notice of Internet Availability of Proxy Materials is being mailed, and the attached proxy statement is being made available, to our shareholders on or about May 6, 2022.

Please read our attached proxy statement carefully and submit your vote as soon as possible. Your vote is important. You can ensure that your shares are voted at the meeting by using our Internet or telephone voting system, or by completing, signing and returning a proxy card.

Atlanta, Georgia
May 6, 2022

 

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We are looking forward to once again being with our shareholders in person at Delta’s upcoming annual meeting.

As we reflect on 2021, Delta made significant progress in its recovery from the impact of the pandemic. The Board remains appreciative of the dedication and hard work of all Delta employees and the leadership of Delta’s management during this unprecedented time.

With the company’s business continuing to recover from the depths of the pandemic, the Board’s focus remains on long-term strategy and oversight of other matters of importance to our shareholders. The company’s financial recovery remains our highest priority. We are also mindful that ESG issues, particularly environmental sustainability and human capital management, including diversity, equity and inclusion, are top of mind for many of you — as they are for us. We appreciate the views that many of you have shared with us on these topics over the last year.

In light of the Board’s continuing focus on ESG topics, we have revisited and clarified the allocation of oversight responsibilities among our committees. As is discussed in greater detail in this proxy statement, oversight over ESG matters aligns with the general responsibilities of our existing committees as follows:

Our committee structure and allocation of responsibilities provides for involvement of all Board members in oversight of ESG matters. We will continue to monitor our structure to make sure that oversight responsibilities are appropriately assigned.

We are excited that Greg Creed and Leslie Hale have joined the Delta Board and look forward to their contributions for years to come. We continue to focus on bringing a wide range of strong experiences, skills, qualifications, and backgrounds to the Board. We are also committed to continuing the enhancement of the diversity of the Board.

Because of the unusual circumstances of the past two years, the Board has asked me to continue to serve for one more year. I am very grateful to Bill Easter that he has agreed to continue his service as well. The dedication and hard work of the entire Board makes me proud to be a part of this outstanding group working on your behalf.

As we look forward to the second half of the year and Delta’s continued progress on its recovery, we welcome your engagement on issues of importance to you and the company. We encourage you to share suggestions and concerns with us. In particular, we encourage you to review this proxy statement, and vote in the upcoming meeting.

As always, we deeply appreciate your support as shareholders and customers.

Sincerely,

 

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2021 was a pivotal year for Delta Air Lines. The remarkably swift development and distribution of safe, effective vaccines inspired hopes that a return to normal life was finally on the horizon.

While the year was more turbulent than many had hoped, with new variants complicating the recovery, it nonetheless marked a major turning point and laid the groundwork for significant progress in 2022 as the world moves past the pandemic era toward treating COVID as a manageable virus.

Once again, the people of Delta stepped up and led the industry throughout a year that was marked by remarkable accomplishments amid the slow but steady recovery, including:

Thanks to these efforts, the people of Delta were recognized throughout the year for their excellence, including honors from J.D. Power, Fortune’s World Most Admired Companies, the Wall Street Journal, and Business Travel News, among many others.

Looking ahead, the recovery continues to accelerate in 2022, with consumers returning to travel, international borders reopening, corporate offices welcoming back employees and business travelers reclaiming the skies. The investments Delta has made over the past two years in our people, our customers and our financial health are paying off as more consumers choose to invest their time, resources and loyalty with us as they reclaim their lives.

While we continue to lead in the recovery and build the future of air travel, it’s clear that our path forward must be a sustainable one. That’s why amid the challenges of the pandemic, Delta has led the way in building a foundation for sustainable aviation with our Flight to Net Zero, announcing our intention to set medium- and long-term science-based targets, including a net-zero 2050 target in alignment with the United Nations Race to Zero — Business Ambition for 1.5°C campaign. And we are continuing to take action to advance diversity, equity and inclusion and to reflect the world and the passengers we serve. More details on these efforts will be available in our 2021 ESG Report.

As we have for nearly a century, Delta will be guided throughout the year by our people-focused culture of service. Our entire global family, and their never-ending drive to Keep Climbing, are reshaping the future of air travel for generations to come.

Thank you for your support throughout the past year. We look forward to speaking with you at our annual meeting in June.

Sincerely,

 

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PROXY STATEMENT SUMMARY

The Delta Difference

As a global airline based in the U.S., we connect customers across our expansive global network. In 2019, prior to the onset of the COVID-19 pandemic, we served approximately 200 million customers and were the world’s largest airline by total revenues and the most profitable, with five consecutive years of $5 billion or more in pre-tax income from 2015 through 2019. 

Following the onset of the COVID-19 pandemic in 2020, Delta responded quickly to protect our people, our customers and our financial position, driven by the unwavering dedication and commitment of the Delta people. The pandemic required significant adjustments to our network and operations in 2020. We made significant progress in restoring our network in 2021, as travel restrictions eased and vaccine programs became widespread both domestically and in international markets. 

With operational excellence, best-in-class service and a commitment to ensuring the health and safety of our customers, we have continued to earn our customers’ trust and preference by delivering the “Delta Difference.” We have five competitive advantages that support our trusted consumer brand. 

	PEOPLE AND CULTURE
Our people are our strongest competitive advantage. Our employees provide world-class travel experiences for our customers while also giving back to the communities where they live, work and serve. We made a special profit-sharing payment to eligible employees in February 2022, based on the adjusted pre-tax profit earned during the second half of 2021, to recognize our employees’ extraordinary efforts through the pandemic. Delta was again recognized by Glassdoor as one of its Best Places to Work, ranking number 18 on the 2022 list of 100 large companies. We have prioritized the health and safety of our employees by providing COVID-19 testing and vaccination programs. We hired a Chief Health Officer in February 2021 to reimagine our approach to health and wellbeing.
	GLOBAL NETWORK
We and our alliance partners collectively serve over 130 countries and territories and over 800 destinations around the world. We believe that our global network has the best domestic connecting hub complex — including the world’s most efficient hub in Atlanta — enhanced by strong international alliances and joint ventures that span the globe. To support this network, even prior to the pandemic we began refreshing our fleet by acquiring new and more fuel efficient aircraft with increased premium seating to replace older aircraft and to reduce our fleet complexity with fewer fleet types. Our new aircraft are on average 25% more fuel efficient per seat mile than retired aircraft.
	OPERATIONAL RELIABILITY
Our reliability was a key component to Delta being named the Top U.S. Airline of 2021 by the Wall Street Journal in its annual airline scorecard rankings. This achievement recognizes the consistent efforts of our people to safely deliver reliable, on-time service while providing an exceptional customer experience. We have intensified our focus on ensuring the health and safety of our customers, including the creation of our industry-leading cleanliness standards through the Global Cleanliness organization and the implementation of the Delta CareStandardSM to ensure a consistently safe and sanitized experience across our facilities and aircraft.
	CUSTOMER LOYALTY
In 2021, we were recognized as No. 1 in customer satisfaction among airlines in North America by J.D. Power, underscoring the professionalism, care and humanity that our people delivered during one of the most stressful periods for travel in modern history. We were also ranked No. 18 on Fortune Magazine’s World’s Most Admired Companies list and named one of Fast Company’s most innovative travel companies in 2021. Our trusted, global brand and strong relationship with American Express® combine to drive customer loyalty and a diversified, high-margin revenue stream.
	FINANCIAL FOUNDATION
Over the decade prior to the pandemic, we fundamentally transformed our business, creating a customer-focused operation with industry-leading products, reliability and service and a strong financial foundation. Our balance sheet strength built prior to the pandemic allowed us to manage through the crisis with minimal dilution of shareholders’ ownership. Restoring the strength of our balance sheet and reducing debt is a key financial priority. We are efficiently rebuilding the airline, capturing fleet renewal benefits and driving operating leverage that we expect will produce a competitive cost structure.

 

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Matters to be Presented at the Annual Meeting

Item 1 Election of Directors

Name and Primary Occupation		Age	Director Since	Other Public Boards	Committees
	EDWARD H. BASTIAN CEO of Delta	64	2010	-
	FRANCIS S. BLAKE Non-Executive Chairman of the Board of Delta; former Chairman and CEO of The Home Depot	72	2014	1	• Corporate Governance • Finance • Personnel & Compensation
	ASHTON B. CARTER Director of the Belfer Center for Science and International Affairs at Harvard Kennedy School	67	2017	1	• Audit • Safety & Security • Corporate Governance
	GREG CREED Former Chief Executive Officer, Yum! Brands, Inc.	64	2022	2	• Audit • Personnel & Compensation
	DAVID G. DEWALT Founder and Managing Director of NightDragon Security; Managing Director of AllegisCyber Capital	58	2011	3	• Safety & Security • Audit • Corporate Governance
	WILLIAM H. EASTER III Former Chairman, President and CEO of DCP Midstream	72	2012	1	• Audit Committee • Corporate Governance • Safety & Security
	LESLIE D. HALE President and Chief Executive Officer of RLJ Lodging Trust	50	2022	2	• Finance • Safety & Security
	CHRISTOPHER A. HAZLETON Captain, Airbus 321, Delta	54	2019	-	• Safety & Security
	MICHAEL P. HUERTA Former Administrator of the Federal Aviation Administration	65	2018	1	• Audit • Safety & Security • Corporate Governance
	JEANNE P. JACKSON Former President, Senior Strategic Advisor to the CEO of NIKE	70	2017	1	• Finance • Personnel & Compensation
	GEORGE N. MATTSON Co-Founder of NextGen Acquisition Corp. and NextGen Acquisition Corp. II prior to their mergers with Xos, Inc. and Virgin Orbit Holdings, respectively	56	2012	3	• Finance • Corporate Governance • Personnel & Compensation
	SERGIO A. L. RIAL Non-Executive Chairman of the Board of Banco Santander (Brasil)	61	2014	3*	• Personnel & Compensation • Corporate Governance • Finance
	DAVID S. TAYLOR Executive Chairman of the Board of The Procter & Gamble Company	64	2019	1	• Finance • Safety & Security
	KATHY N. WALLER Executive Director of the Atlanta Committee for Progress; former CFO of The Coca-Cola Company	63	2015	3	• Audit • Corporate Governance • Personnel & Compensation
Committee Chair * Including Santander parent-sub

 

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Executive Compensation Program

Our executive compensation program is based on the philosophy that we can best achieve our short-term and long-term business goals by closely linking pay to performance and aligning the interests of all Delta employees, including executive officers, with those of our customers and shareholders.

Last year, the Personnel & Compensation Committee decided not to alter the performance measures or goals of our outstanding short-term and long-term incentive awards, despite the pandemic negatively impacting award values significantly. For 2021, the Committee reviewed our executive compensation program to ensure that it achieves the balance of rewarding and retaining our executives while still placing the majority of their compensation at risk. As a result, the Personnel & Compensation Committee made adjustments to our annual and long-term incentive plans for 2021 that address these objectives as well as the continued uncertainty of the pandemic’s ongoing impact on our business and the complexity of developing meaningful incentive compensation opportunities in such an environment.

For additional information on the changes to our annual and long-term incentive plans and other decisions regarding 2021 executive compensation, see the “Compensation Discussion and Analysis” section beginning on page 23 of this proxy statement.

 

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Shareholder Engagement

We value our relationships with our shareholders, and we have a long-standing practice of active engagement with them. Our engagement allows us to better understand our shareholders’ priorities, perspectives and concerns, and positions us to effectively address issues that are important to our shareholders. During 2021, we met virtually, or initiated contact, with shareholders representing approximately 53% of our outstanding shares, including actively managed funds, index funds, public pension funds, and socially responsible investment funds. This represented engagement with institutions holding 83% of the shares held by all of our institutional shareholders. We also have dedicated resources to engage with our shareholders, including individual shareholders, through monitoring of communications received by our investor relations and sustainability departments, which collectively responded to more than 150 inquiries during 2021. The table below summarizes key aspects of these engagement efforts during 2021.

 

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Environmental, Social and Governance (ESG) Highlights

We are committed to taking care of our people, being a good steward of the environment and being a positive force in our communities. This commitment is based on our culture of putting people first in all we do — whether it’s our employees, the millions of customers who trust us with their travel each year, or the communities where we live, work and serve. The Board of Directors is committed to sound corporate governance in line with evolving best practices. The Board of Directors understands and appreciates the importance of ESG matters as well as their significance to our various stakeholders, including our investors. As described further on pages 55 through 61, the Board of Directors includes several directors with skills and experience relevant to these topics. In addition, the Board of Directors has, and continues to gain, knowledge about these evolving areas through, among other things, regular briefings and discussions with internal subject-matter experts. The Board also has access to external resources and education on a variety of these matters.

Transparency and Reporting

We report on our efforts with respect to ESG matters through an annual ESG report that is informed by the Task Force on Climate-Related Financial Disclosures (TCFD), the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) frameworks and standards. We have expanded our evaluation of climate risks and opportunities through a climate scenario analysis that considered both physical and transition risks and worked to develop a decarbonization pathway, all of which will be described in our 2021 ESG Report. In addition, we recently released our climate lobbying report, which describes our global advocacy activities and policy engagements — both direct and indirect — that support and complement our ambitious climate goals. During 2021, we also regularly engaged with shareholders and other stakeholders on ESG trends and opportunities. For more information on ESG matters, including with respect to our climate strategy, risks, opportunities, metrics and targets, please see our 2021 ESG Report, available at www.delta.com/sustainability.

Our Commitment to Our People

We believe that Delta people are our strongest competitive advantage, and they have created a culture that is the foundation of our success. We have long understood that taking care of our people also leads to satisfied customers and other stakeholders. In 2021, as our business began to recover from the impact of the COVID-19 pandemic, we hired approximately 11,000 new full-time employees across our business, including pilots, flight attendants, and gate and reservation agents.

Safety and Health

Our dedication to safety, security and public health is spearheaded by our executive leadership team, including through our Personal Safety Steering Committee and our Operational Safety Committee, and overseen by the Safety & Security Committee of our Board of Directors. We have led the airline industry for many years in employee safety and strive for world-class personal safety performance.

To successfully integrate the influx of new employees during 2021, we adapted many of our safety programs and leveraged the maturity of our risk-based Safety Management System to account for a changing workforce and processes shaped by the COVID-19 pandemic. Delta continued to make significant investments throughout the year in training for employees joining the Delta team as well as leadership development programs and programs to reinforce safety culture.

During 2021, we also continued to prioritize the safety and health of our employees by offering an extensive employee COVID-19 testing program and vaccination program, with on-site vaccination centers in all major employee centers opening promptly following vaccine availability. In addition, we partnered with the state of Georgia to host the state’s largest COVID-19 vaccination site while steadily increasing the vaccination rate among our employees, providing pay protection programs for employees diagnosed with, exposed to or at high risk from COVID-19 and offering free flu shots for all U.S. employees. In February 2021, we hired Dr. Henry Ting as our Chief Health Officer to reimagine our approach to health and wellbeing. We have a framework in place to oversee our wellbeing strategy, which includes oversight from our Wellbeing Council and the Personnel & Compensation Committee of the Board.

Beyond employee safety and health, we proactively reduce risks by identifying, assessing, mitigating and/or eliminating hazards that may cause incidents, accidents or injuries to customers.  In 2021, we safely transported more than 135 million customers system wide. Following the onset of the COVID-19 pandemic, we intensified our focus on the health and safety of our customers, including the creation of our industry-leading cleanliness standards through the Global Cleanliness organization and the implementation of the Delta CareStandard^SM to ensure a consistently safe and sanitized experience across our facilities and aircraft through the use of science-backed cleaning technologies and protocols.

 

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Diversity, Equity and Inclusion

As a global airline, we are in the business of bringing people together, and we believe our business should reflect the diversity of our customer base. To achieve this goal, we seek diverse talent internally and externally in an effort to achieve broader representation throughout our organization.

The Personnel & Compensation Committee provides ongoing oversight with respect to policies and strategies relating to talent development and human capital management, including diversity, equity and inclusion. Our Diversity, Equity & Inclusion Council is the senior cross-divisional group that represents the operational, corporate and commercial organizations of our business and is charged with ensuring our diversity, equity and inclusion priorities are relevant and embedded throughout the company, in partnership with our Diversity, Equity & Inclusion Office, which is led by Keyra Lynn Johnson, our Vice President and Chief Diversity, Equity and Inclusion Officer. The council meets regularly to evaluate corporate and divisional metrics, programs and proposals that align with our diversity, equity and inclusion strategy.

We remain focused on our strengthened commitment to be an anti-racist, anti-discrimination organization and want all of our employees to feel a sense of belonging at Delta. We have tools and processes in place to evaluate our progress on diversity, equity and inclusion matters, including with respect to our employees’ sense of belonging. Key elements of our diversity, equity and inclusion strategy to drive this vision include the following:

As part of our commitment to transparency, and based on feedback from external stakeholders, we have begun publishing on our website our latest EEO-1 Report as submitted to the U.S. Equal Employment Opportunity Commission.

Our Commitment to the Environment

Governance of Environmental Sustainability Program

We have implemented a robust governance framework at both the Board and management levels with respect to our environmental sustainability program:

 

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Climate Goals and Strategy

During 2021, we built on our previously announced plan to invest $1 billion through the end of 2030 toward airline carbon neutrality by announcing our intention to set new medium- and long-term climate goals that are aligned with the applicable framework of the Science Based Targets initiative (SBTi).

We have submitted both goals to SBTi for validation, but we are unable to predict the outcome of that process and when it will be completed. These proposed goals are supported by a robust sustainable aviation fuel (SAF) goal. Our goal is to replace 10% of our jet fuel consumption with SAF by the end of 2030, with the aim of half of that amount from SAF that achieves at least an 85% reduction in lifecycle emissions relative to conventional jet fuel, subject to availability and feasibility.

The global aviation industry is viewed as a hard-to-abate sector, meaning it is innately difficult to decarbonize. We expect our path toward achievement of these ambitious climate goals to include the following levers, with the fleet and fuel levers expected to play the most significant roles:

 

Stakeholder Engagement and Coalition Building

To advance these ambitious goals, we are committed to engaging our stakeholders and building coalitions to help drive down cost and increase production and consumption of alternative fuels and new technologies.

 

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Our Commitment to Our Communities

As we connect people with communities, experiences and each other, we are committed to doing our part to build a better world. Giving back to the communities where we live, work and serve is part of our culture at Delta. The graphic below illustrates some of the ways in which Delta and its people gave back in 2021:

DELTA’S COMMUNITY IMPACT

 

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Our Commitment to Leading Governance

Delta has a history of a strong, independent Board, composed of experienced members who are diverse with respect to background, skills, experiences, gender, race and ethnicity. The Board is committed to sound corporate governance in line with evolving best practices.

After pausing the refreshment of the Board during the pandemic, Leslie D. Hale and Greg Creed have recently joined the Board, bringing strong experience and skills. In order to provide continuity as we continue to recover from the impact of the pandemic, the Board has waived the retirement age for Mr. Blake and Mr. Easter. As the Chair of the Board and of the Corporate Governance Committee, Mr. Blake’s leadership of the Board has been critical during the pandemic. Likewise, Mr. Easter has played a crucial role in leading the Audit Committee. Their ongoing service will enable the Board to continue to function efficiently and effectively as leadership responsibilities transition.

 

 

Corporate Governance Highlights

 

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GOVERNANCE - BOARD MATTERS

During 2021, the Board of Directors met nine times. Each director who served on the Board during 2021 attended at least 75% of the meetings of the Board of Directors and the committees on which he or she served that were held during his or her tenure on the Board or relevant committee. It is the Board’s policy that directors are encouraged to attend the annual meeting. All of Delta’s directors attended the virtual annual meeting in 2021. During the year, the Board routinely held executive sessions without the Chief Executive Officer. Mr. Blake presided at these sessions as non-executive Chairman of the Board.

Board Leadership Structure

Because we believe operating pursuant to sound governance practices benefits the long-term interests of our shareholders, for many years we have chosen to elect an independent, non-executive Chairman of the Board separate from our Chief Executive Officer.

We believe the non-executive Chairman of the Board plays an important governance leadership role that enhances long-term shareholder value. 

Board Committees and Governance Documents

The Board of Directors has established the Audit, Corporate Governance, Finance, Personnel & Compensation and Safety & Security committees to assist it in discharging its responsibilities. The number of meetings held by each of these committees in 2021 and the committee’s primary responsibilities are listed beginning on the next page.

A detailed list of the responsibilities of each committee can be found in the committee charters, which are available in the corporate governance section of our website at ir.delta.com/governance/. Our Certificate of Incorporation, Bylaws, Corporate Governance Principles, codes of ethics and business conduct and director independence standards are also available in the corporate governance section of our website at ir.delta.com/governance/.

 

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Audit Committee

 

Corporate Governance Committee

 

Finance Committee

 

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Personnel & Compensation Committee

 

Safety & Security Committee

 

All members of the Audit, Corporate Governance, Finance and Personnel & Compensation Committees are non-employee directors who are independent, as defined in the New York Stock Exchange (NYSE) listing standards and Delta’s director independence standards. In addition, the members of the Audit Committee and the members of the Personnel & Compensation Committee satisfy the additional independence requirements set forth in rules under the Securities Exchange Act of 1934 (the 1934 Act).

 

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Board Refreshment Process

The Corporate Governance Committee recommends to the Board of Directors nominees for election to the Board. Delta believes each current nominee for the Board of Directors has the following attributes:

The Committee seeks nominees who have the skills and experience to assist management in the operation of Delta’s business and to provide input on Delta’s strategy, among other matters. The Committee is also committed to continuing the enhancement of the diversity of the Board. In accordance with Delta’s Corporate Governance Principles, the Committee and the Board assess potential nominees (including incumbent directors). In its succession planning role, the Committee regularly considers potential candidates for the Board in light of the company’s new and evolving risks, strategies and operations as follows:

 

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Board and Committee Evaluation Process

For many years our Board of Directors and each of its committees have annually engaged in comprehensive self-evaluations.

 

The Board believes this annual evaluation process supports its effectiveness and continuous improvement.

Risk Management

Board Oversight

The Board of Directors has ultimate responsibility to oversee Delta’s enterprise risk management program (ERM). Coordinated by the head of Delta’s Corporate Audit & Enterprise Risk Management department, the ERM program instills a heightened awareness of risk management throughout Delta, identifies and categorizes risks and monitors the progress of enterprise risk mitigation plans. The role of ERM is to provide a risk management framework with cross-functional alignment to enable risk informed decision-making through identification and categorization of risks and monitoring the progress of enterprise risk mitigation plans.

The Board discusses risk throughout the year, particularly when reviewing operating and strategic plans and when considering specific actions for approval. The Board’s oversight of risk management is managed through delegation to each of the Board’s committees with regular reporting to the full Board.

 

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Management’s Role

Delta’s ERM process is a journey of continuous improvement and iteration to meet the evolving needs of our business. Leaders of the business divisions, working closely with the ERM leader, have responsibility for risk identification, development of business risk mitigation plans, and monitoring and reporting progress of their implementation. Delta’s leadership structure, combined with the roles of the Board, its committees, and the Risk Council, provide appropriate leadership for effective risk oversight.

Risk Council

 

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Communications with Directors

Shareholders and other interested parties may communicate with our non-management directors by sending an e-mail to nonmgmt.directors@delta.com. We have established a link to this address on our Investor Relations website. Communications with directors may also be mailed to Delta’s Corporate Secretary at:

Law Department
Delta Air Lines, Inc.
Department 981
1030 Delta Boulevard
Atlanta, Georgia, 30354
Attn: Corporate Secretary

Communications will be sent directly to the Chairman of the Board, as representative of the non-management directors, other than communications pertaining to customer service, human resources, accounting, auditing, internal control and financial reporting matters. Communications regarding customer service and human resources matters will be forwarded for handling by the appropriate Delta department. Communications regarding accounting, auditing, internal control and financial reporting matters will be brought to the attention of the Audit Committee chair.

 

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SHARE OWNERSHIP

Directors and Executive Officers

The following table sets forth the number of shares of Delta common stock beneficially owned as of April 22, 2022, by each director and director nominee, each person named in the Summary Compensation Table in this proxy statement, and all directors and current executive officers as a group. Unless otherwise indicated by footnote, the owner exercises sole voting and investment power over the shares listed.

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Beneficial Owners of More than 5% of Voting Stock

The following table provides information about the following entities known to Delta to be the beneficial owner of more than five percent of Delta’s outstanding common stock as of April 22, 2022.

 

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EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This section of the proxy statement describes the compensation of our named executive officers for 2021. It also discusses how our executive compensation program reflects our compensation philosophy and objectives, including the importance of linking pay to performance.

 

2021 Named Executive Officers

 

Effective July 19, 2021, Daniel C. Janki became Delta’s Chief Financial Officer. William C. Carroll and Garrett L. Chase concluded their service as Interim Co-Chief Financial Officers as of that date.

Executive Summary

We started 2021 coming off one of the most difficult years in Delta’s history — a year in which we learned how to operate an airline through the ever-changing circumstances of a global pandemic. We understood that, like 2020, 2021 would not be predictable. We expected to see two distinct phases over the year. The first looking like 2020 with travel demand deeply depressed, and the second, when we reached a turning point with widely available vaccinations spurring the reemergence of travel.

Because of this uncertainty, we did not implement our traditional “Flight Plan,” which sets forth Delta’s short-term and long-term business goals, for 2021. Instead, we relied on the following guiding principles to drive our decisions over the year:

These principles successfully drove the airline in 2021. Our operational excellence and best-in-class service were recognized by travelers as J.D. Power’s No. 1 airline in customer satisfaction among airlines in North America. And, we ended the year being the only major U.S. airline to deliver profitability for the second half, allowing us to make a payment to our employees under the company’s broad-based profit-sharing program (Profit Sharing Program).

The progress Delta made in its recovery from the impact of the pandemic in 2021 is described in detail in the “Letter from the CEO,” “Letter from the Non-Executive Chairman of the Board” and the “Proxy Statement Summary” sections of this proxy statement.

Our Employee Commitment

Through mask mandates, new variants and pandemic fatigue, COVID-19 continued to be challenging to the airline industry in 2021. Our employees once again proved that Delta’s most important competitive advantage is its people. As a result of their resilience and dedication, we were ready to welcome back our customers as they steadily resumed air travel. During 2021, we returned all of our people to full schedules and began rebuilding our workforce by welcoming approximately 11,000 new employees to Delta, while continuing our commitment to promote a culture of open, honest and direct communications and building an environment that encompasses diversity, equity and inclusion.

 

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	Supporting our People in 2021 We have asked a lot of our people over the last two years and they have risen to the occasion by consistently delivering the Delta Difference to our customers, communities and each other. Delta supported its employees during this crucial time in various ways, including:
		Prioritizing Health and Wellbeing Our number one priority through the pandemic has been the health and safety of our people. In February 2021, we welcomed Dr. Henry Ting to Delta as our Chief Health Officer—a first for a U.S. airline. In addition to our COVID-19 response and measures to protect employees, such as providing vaccines on-site at our largest employee centers, Dr. Ting and his team are conducting a top-down review of our health and wellness offerings to ensure we are supporting and elevating all aspects of employee wellbeing—physical, emotional, social and financial.
		Paying Profit-Sharing Program We paid over $100 million in February 2022 under the Profit Sharing Program in recognition of the achievements of our employees that made Delta profitable for the second half of 2021.
		Maintaining the Shared Rewards Program We awarded $55 million under Delta’s broad based shared rewards program (Shared Rewards Program) based on the hard work of our employees meeting key operational performance goals during 2021 (on-time arrival, baggage handling, flight completion factors and net promoter score) recognizing that superior performance by our front line employees directly affects customer satisfaction.
		Continuing our Commitment to Financial Wellness We recognized that the last two years have been challenging for our people not only physically and mentally, but also financially. In addition to helping our employees save for retirement by making over $890 million in company contributions to our 401(k) plans in 2021, Delta is making one-on-one financial coaching available to our domestic employees. In addition, Delta contributed $1.5 billion to our frozen defined benefit plans.

 

Diversity, Equity and Inclusion

Our commitment to diversity, equity and inclusion is in pursuit of our goal to connect and reflect the world — bringing people together and representing the communities that Delta serves. We have committed to building a better future, fueled in large part by our focus on diversity, equity and inclusion. This goes beyond doing the right thing. It is imperative to our success.

In the midst of a global reckoning over racial inequity and injustice, we strengthened our commitment in 2020 to be an anti-racist and anti-discrimination organization that fosters our employees’ sense of belonging at Delta. In 2021, we accelerated our actions to close diversity gaps by increasing the representation of women and under-represented groups in senior leadership positions and doubling the number of Black officers and director-level employees by 2025 as compared to 2020. This progress, which falls under the oversight of the Personnel & Compensation Committee, is reported out regularly to the Board of Directors and made public twice a year.

See “Our Commitment to Our People” starting on page 9 for more information about Delta’s diversity, equity and inclusion efforts.

Talent Planning and Development

Talent planning and development are important at all levels within Delta — from our executives to our frontline employees. 2021 was a year like none other as we welcomed approximately 11,000 new employees to the organization and transitioned 40% of our leaders into new roles. This amount of transition was positive for our people, opening opportunities to progress their careers within the organization. To support this transition, we leaned on sound talent planning processes, a new and improved learning and development platform and additional leader training.

The Personnel & Compensation Committee also continues to place significant focus on executive talent planning. The Board of Directors is regularly updated on key talent indicators for our senior leaders, including recruiting, development and succession planning programs. They are also exposed to potential future executive leaders through board meetings and informal events.

 

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Executive Compensation in 2021

In 2020, the Personnel & Compensation Committee determined not to make changes to any outstanding short-term or long-term incentive awards, despite the pandemic negatively impacting award values significantly — ensuring our executives remained fully aligned with shareholders. It made that decision knowing it would have to develop a program for 2021 that rewards our executives’ leadership in the industry, continued focus on our recovery and commitment to Delta. The Personnel & Compensation Committee met extensively with its compensation consultant and company management to consider how best to achieve these objectives within a set of guiding principles that adhere to our pay for performance compensation philosophy and comply with the compensation limitations of the CARES Act.

In setting the executive compensation program for 2021, the Personnel & Compensation Committee decided to maintain the program’s current elements, including retaining the general structure of our annual and long-term incentive plans. However, due to the continued uncertainty of the pandemic’s ongoing impact on our business and the complexity of determining performance goals in such an environment, the Committee made adjustments to better link compensation with performance through the expected stages of recovery, while ensuring the majority of compensation remained at risk. As indicated below, some of these changes were temporary for 2021 in consideration of the unique impact of the pandemic.

In addition to other actions taken by the Committee as described in this Compensation Discussion and Analysis, the following actions were taken with respect to our annual and long-term incentive plans for 2021:

The Personnel & Compensation Committee reinstated the full twelve-month and three-year performance periods for our 2022 incentive plans.

The CARES Act

In April 2020, Delta entered into an agreement with the U.S. Department of the Treasury to receive emergency support through the payroll support program under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), which totaled $5.6 billion. In January and April 2021, Delta and the Treasury Department entered into additional payroll support program agreements under the Consolidated Appropriation Act, 2021 and the American Rescue Plan Act of 2021 (with the initial agreement, referred to as the PSP Agreements). Collectively, these additional agreements provided approximately $6.4 billion in payroll support payments. All of the payroll support funds were required to be used exclusively for the payment of employee wages, salaries and benefits and were conditioned on Delta agreeing, among other things, to refrain from conducting involuntary employee layoffs or furloughs from the date of the agreement through September 30, 2021, or the date on which Delta has expended all of the payroll support funds. In addition, Delta became subject to other restrictions, including certain limitations on executive compensation (CARES Act compensation limitations).

Under the CARES Act compensation limitations, the total compensation (as defined in the PSP Agreements) of our management employees whose total compensation exceeded $425,000 in 2019 is limited during any 12 consecutive month

 

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period beginning March 24, 2020 through April 1, 2023 to the total compensation the employee received in 2019. Additionally, for those individuals whose total compensation exceeded $3 million in 2019, the total compensation is limited to (1) $3 million plus (2) 50% of the excess over $3 million.

Delta has designed compliance processes for the CARES Act compensation limitations, including, in certain cases, making adjustments to the composition of an individual’s long–term incentive awards, and has provided periodic comprehensive reports to the Treasury Department, as required by the PSP Agreements.

Administration of the Executive Compensation Program

 

 

 

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Executive Compensation Philosophy and Objectives

Our executive compensation philosophy is to achieve Delta’s short-term and long-term business goals by closely linking pay to performance and by aligning the interests of all Delta people with the interests of our customers and shareholders. Based on this philosophy, the Personnel & Compensation Committee develops the executive compensation program to promote a pay for performance culture that:

 

Pay for Performance

Pay for performance is the foundation of our compensation philosophy for all employees, driving a strong sense of team work and continual improvement of business results. Our executive compensation program places a substantial portion of total compensation at risk. In 2021, 94% of total target compensation for the Chief Executive Officer and 90% of total target compensation for the other named executive officers was contingent on Delta achieving ambitious financial, operational and customer service goals or subject to stock price performance. Furthermore, the majority of their total compensation is equity-based, which, together with our stock ownership and retention guidelines, aligns the interests of management to the interest of shareholders.

The Personnel & Compensation Committee sets stretch performance goals under our annual and long-term incentive plans to drive Delta’s business strategy and to deliver value to our shareholders.

Our incentive plans closely align the interests of management with those of frontline employees in two respects. First, many of the same financial, operational and customer service performance measures are used in both our executive and broad-based employee compensation programs. Second, we have long structured our annual incentive plan to ensure that executives do not receive above-target incentive payouts unless our people also receive payment under the Profit Sharing Program for the year.

 

Say on Pay Voting Results

At our 2021 annual meeting, we asked shareholders for a non-binding “say on pay” advisory vote to approve the 2020 compensation of the named executive officers. The holders of 93% of the shares present and entitled to vote at the 2021 annual meeting voted for approval of the compensation of the named executive officers. The Personnel & Compensation Committee took these results into account by continuing to emphasize our pay for performance philosophy utilizing challenging performance measures that provide incentives to deliver value to our shareholders.

 

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Corporate Governance and Compensation Practices

Our executive compensation program reflects corporate governance policies and compensation practices that are transparent and consistent with best practices. The following chart highlights the policies and practices we consider instrumental in driving company performance while mitigating risk, as well as the practices we avoid:

Comparative Market Data and Peer Group

We believe peer group data should be used as a point of reference, not as the sole factor in our executive officers’ compensation. In general, the Personnel & Compensation Committee’s objective is for target total direct compensation opportunities to be competitive with the peer group, with individual variation based on the individual’s performance, experience and role within Delta.

Our peer group is composed of three major U.S. airlines and eighteen other companies in the hotel/leisure, transportation/ distribution, machinery/aerospace/defense and retail industries. We selected these industries because we believe it is important that our peer group have business characteristics that are similar to Delta’s, including revenue size, market capitalization, number of employees, operating margin and global presence. In order to retain and attract the talent we need, Delta must compete with these types of companies, and if the peer group was limited to the airline industry, we would have to include companies that are a fraction of the size and scope of Delta. The Personnel & Compensation Committee, in consultation with the compensation consultant and company management, reviews and considers changes to the composition of our peer group annually. There were no changes to the peer group in 2021. The companies in our peer group are:

 

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Elements of Compensation

Compensation elements for our executive officers include:

 

Delta does not have a specific compensation target for each element of compensation. As shown in the compensation mix charts on page 27, at-risk compensation is the largest portion of the total compensation opportunity for the Chief Executive Officer and the other named executive officers. The Personnel & Compensation Committee believes this is the appropriate approach for aligning the interests of the named executive officers and shareholders.

The Personnel & Compensation Committee considers a number of factors, including competitive market data, internal equity, role and responsibilities, business and industry conditions, management succession planning and individual experience and performance in determining executive compensation. When making specific compensation decisions, the Personnel & Compensation Committee also reviews compensation “tally sheets” prepared by the compensation consultant. The tally sheets detail the total compensation and benefits for each executive officer, including the compensation and benefits the officer would receive under hypothetical termination of employment scenarios.

Performance Measure Selection

Consistent with our executive compensation philosophy, the Personnel & Compensation Committee selects performance measures to support our Flight Plan and to closely align the interests of the named executive officers with the interests of our key stakeholders. Recognizing that the performance measures used under our annual and long-term incentive plans may need to change over time to reflect evolving priorities, the Personnel & Compensation Committee, together with company management and the compensation consultant, evaluates the performance measures used in our incentive plans each year to ensure they remain consistent with Delta’s long-term strategic plan and our annual Flight Plan goals.

Without our traditional Flight Plan for 2021, the Personnel & Compensation Committee approached its performance measure evaluation with a focus on recovery and further strengthening Delta’s competitive advantages, with the objective of:

 

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The Personnel & Compensation Committee believed that whether the motivation is to rebuild the airline to pre-pandemic levels or exceed record profit levels, the performance measures established in prior years continue to be the best indicators of Delta’s success and align the interests of the named executive officers with our employees, customers and shareholders. Accordingly, the Personnel & Compensation Committee decided not to introduce any new performance measures under our annual and long-term incentive plans for 2021. Rather, it reduced the total number of performance measures under both plans and retained those that (1) met the Committee’s objectives, (2) directed the named executive officers’ focus on driving financial recovery and maintaining operational excellence and (3) were less affected by volatile external factors.

In determining the appropriate performance measures for the 2021 incentive plans, the Personnel & Compensation Committee excluded those that would better measure the company’s performance once the airline returned to profitability and generated sustained operating cash flows. This resulted in the removal of pre-tax income margin (measured against an airline peer group) under the annual incentive plan and return on invested capital under the long-term incentive program. In addition, the total shareholder return modifier (relative to all other S&P 500 companies) in the long-term incentive program was removed to address the disproportionate impact the pandemic has had on various industries included in the S&P 500. The Personnel & Compensation Committee believed that superior performance in the retained performance measures should ultimately produce sustainable long-term shareholder returns.

In setting the annual and long-term performance goals for each performance measure, the Personnel & Compensation Committee has traditionally reviewed our business plans and considered other factors, including our past variance to targeted performance, our historical performance, economic and industry conditions and the performance of other airlines. Due to the continued economic uncertainty and lack of forward visibility on the duration and impact of the pandemic on our business, the Personnel & Compensation Committee established two separate performance periods (utilizing the same performance measures) for both the annual and long-term incentive plans. Further, for the same reasons, the Committee implemented target ranges for the majority of the performance measures. This allowed the Personnel & Compensation Committee to better set challenging, but achievable goals (including some that are realizable only as a result of exceptional performance) that focus the named executive officers on the company’s short- and long-term objectives.

Annual Incentive Plan

 

Long-Term Incentive Program

 

Base Salary

The base salaries of our Chief Executive Officer and our other named executive officers remain below the median of the peer group for their respective positions.

In 2020, our named executive officers each agreed to temporarily reduce their base salaries for nine months beginning April 1 (100% reduction for Mr. Bastian and 50% for Mr. Hauenstein and Mr. Carter). Effective January 1, 2021, their base salaries were reinstated to 2020 levels with none of our named executive officers receiving a salary increase in 2021.

 

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Annual Incentive

The 2021 Management Incentive Plan (2021 MIP) links pay and performance by providing management employees with a compensation opportunity based on Delta’s achievement of short-term business goals in 2021. The 2021 MIP also aligns the interests of Delta management and employees by using metrics that are consistent with the goals that drive payouts under Delta’s Profit Sharing and Shared Rewards Programs.

Typically, payments under the 2021 MIP are provided in cash. However, to provide further alignment between our executive officers and our people, the executive officers’ 2021 MIP awards are subject to the following conditions if there is no Profit Sharing Program payout to employees for the year:

The 2021 MIP was divided into two separate six-month performance periods, with each period accounting for 50% of the total 2021 MIP award opportunity. The following chart shows the performance measures for the named executive officers under the 2021 MIP and the actual performance for each measure for 2021.

 

 

 

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The target award opportunities under the 2021 MIP are expressed as a percentage of each participant’s base salary earned during the year, other than Mr. Janki, whose 2021 MIP award was based on his annualized base salary. The Personnel & Compensation Committee determined the target award opportunities taking into consideration the peer group comparison, the Chief Executive Officer’s recommendations for executive officers other than himself and input from the compensation consultant. The 2020 target award opportunities were maintained for Mr. Bastian, Mr. Hauenstein and Mr. Carter in 2021. The target cash compensation opportunities (base salary and MIP) for our named executive officers are in alignment with the peer group median.

Summarized in the table below are the 2021 MIP awards earned by each named executive officer. Because there was a payout under the Profit Sharing Program for 2021, payments under the 2021 MIP were made in cash.

 

 

Long-Term Incentives

2021 Long-Term Incentive Program

The 2021 Long-Term Incentive Program (2021 LTIP) links pay and performance by providing management employees with a compensation opportunity that aligns the interests of management and shareholders, with a large portion contingent upon Delta’s financial, customer service and stock price performance over a three-year period. The performance measures and goals are the same for the Chief Executive Officer, the other named executive officers and all other participants in this program.

The 2021 LTIP target awards are the largest component of each executive officer’s compensation opportunity. The Personnel & Compensation Committee determined the target award opportunities so each participant’s total direct compensation opportunity is competitive with the peer group. The 2020 target award levels for the named executive officers were maintained, except for Mr. Carter. Mr. Carter’s target award opportunity under the 2021 LTIP was increased to recognize his significant contributions in implementing the company’s strategic initiatives.

Under the 2021 LTIP, Mr. Bastian and Mr. Hauenstein received an award opportunity consisting of 34% performance awards, 33% restricted stock and 33% stock options, Mr. Carter received 25% performance awards, 58% restricted stock and 17% stock options, and the remaining named executive officers received 38% performance awards, 37% restricted stock and 25% stock options. These award allocations were selected to balance the incentive opportunity between Delta’s financial performance relative to other airlines, internal company performance and stock price performance. This mix and the other terms of the 2021 LTIP are intended to balance the performance and retention incentives with the volatility of airline stocks.

 

Performance Awards

Performance awards are long-term incentive opportunities payable in cash. Performance during the award’s three-year performance period is measured over the following two separate periods: (1) January 1, 2021 – December 31, 2021 and (2) January 1, 2022 – December 31, 2023. One-third of the named executive officer’s target performance award is allocated to the first performance period and the remaining two-thirds is allocated to the second performance period. Any payouts under this award, including amounts earned under the first performance period in 2021, will occur in 2024.

The following chart shows the three performance measures for the named executive officers for the first performance period and the actual performance for each measure in 2021.

 

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YEAR 1 OF 2021 LTIP

 

 

In February 2022, the Personnel & Compensation Committee approved the performance measures for the second performance period. The following chart shows the range of potential payments of the performance awards based on the 2021 LTIP’s three performance measures over the second performance period.

YEARS 2-3 OF 2021 LTIP

 

Restricted Stock

The 2021 LTIP provides that restricted stock will vest in three installments, as follows: 50% on February 1, 2022 and 25% on each of February 1, 2023 and February 1, 2024, subject to forfeiture in certain circumstances. Because these awards were granted while Delta is restricted from paying dividends under the CARES Act, they are not eligible for dividends, even if dividends are later paid while these awards remain unvested. The value of an individual’s restricted stock award will depend on the price of Delta stock when the award vests.

 

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Stock Options

The 2021 LTIP provides that stock options will vest in three equal installments on February 1, 2022, February 1, 2023 and February 1, 2024.

For additional information about the vesting and possible forfeiture of the 2021 LTIP awards, see “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control—Long-Term Incentive Programs” on page 47.

The 2019 Long-Term Incentive Program Payouts

In 2019, the Personnel & Compensation Committee granted Mr. Bastian, Mr. Hauenstein and Mr. Carter performance awards under the 2019 Long-Term Incentive Program (2019 LTIP). We reported these award opportunities in our 2020 proxy statement.

The performance awards were denominated in cash but paid in shares of Delta stock to the named executive officers. The payout of these award opportunities is based on the total revenue per available seat mile (TRASM) relative to the performance of an industry peer group, Delta’s customer service performance, return on invested capital and total shareholder return relative to all other S&P 500 companies over the three-year performance period ended December 31, 2021.

Summarized in the chart below are the performance results certified by the Personnel & Compensation Committee for the performance awards under the 2019 LTIP and the resulting percentage of target award opportunity earned:

 

2019 LTIP PAYOUT

 

 

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The 2020 Long-Term Incentive Program - Performance Stock Options

In 2020, the Personnel & Compensation Committee granted Mr. Bastian, Mr. Hauenstein and Mr. Carter performance stock options under the 2020 Long-Term Incentive Program (2020 LTIP). We reported these award opportunities in our 2021 proxy statement.

Under the 2020 LTIP, the performance stock options will become exercisable based on a time-based vesting schedule subject to employees receiving a payout under the Profit Sharing Program for 2020 or 2021. There was no profit sharing payment made for 2020 and the performance stock options remained unvested.

Because our people received a payout under the Profit Sharing Program for 2021, two-thirds of the applicable named executive officers’ performance stock options vested and became exercisable on February 9, 2022 (the date on which the Personnel & Compensation Committee certified the performance measure was satisfied) and the remaining one-third will vest on February 1, 2023.

Sign-On Awards

In connection with the hiring of Mr. Bellemare and Mr. Janki, each were provided with a one-time cash signing bonus and initial equity award consisting of time-based restricted stock to replace forfeited opportunities and as an inducement to join Delta. These sign-on awards were an important part of their total compensation package, which was essential to the successful recruitment of these individuals. The awards set forth below were paid or granted shortly following the commencement of their employment.

 

Benefits

Our named executive officers participate in the same ongoing retirement plans as our frontline employees, including a defined contribution plan and, for certain officers, a frozen defined benefit pension plan. We do not provide any supplemental executive retirement plans or deferred compensation plans. The named executive officers also receive the same health and welfare benefits provided to all Delta employees, except for basic life insurance coverage, which all other employees receive and our officers do not. In addition, Delta requires officers to regularly complete a comprehensive physical examination. Delta pays the cost of this examination. Every domestic full-time Delta employee is eligible for a free physical under the company’s health plans. Other than eligibility for flight benefits (for the executive officer, immediate family members and other designees and, in certain circumstances, the executive officer’s surviving spouse), Delta provides no perquisites to any of our officers. Delta provides certain flight benefits to all employees and eligible retirees and survivors. These benefits are a low-cost, highly valued tool for attracting and retaining talent and are consistent with industry practice. See the Summary Compensation Table and the related footnotes beginning on page 38 for information regarding benefits received in 2021 by the named executive officers.

Risk Assessment

The Personnel & Compensation Committee requested its consultant, FW Cook conduct a risk assessment of Delta’s executive compensation program. Based on this review, FW Cook determined that the executive compensation program does not encourage unnecessary risk-taking, and the Personnel & Compensation Committee and company management agree with this assessment. The Personnel & Compensation Committee notes the executive compensation program includes: (1) a compensation clawback policy for officers; (2) stock ownership and retention guidelines for executive officers; (3) incentive compensation capped at specified levels; (4) an emphasis on longer-term compensation; (5) use of multiple performance measures, both annual and long-term; and (6) an anti-hedging and anti-pledging policy for all employees. These features are designed to align the interests of executives with preserving and enhancing shareholder value.

 

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Executive Compensation Policies

The Personnel & Compensation Committee monitors the continuing dialogue among corporate governance experts, securities regulators and related parties regarding best practices for executive compensation. Delta’s executive compensation policies, described below, are consistent with our executive compensation philosophy, align with shareholder interests and foster responsible behavior.

Clawback Policy

The compensation clawback policy holds officers accountable in the event of wrongful conduct. Under this policy, if the Personnel & Compensation Committee determines an officer has engaged in fraud or misconduct that requires a restatement of Delta’s financial statements, the Personnel & Compensation Committee may recover all incentive compensation awarded to or earned by the officer for fiscal periods materially affected by the restatement. For this purpose, incentive compensation includes annual and long-term incentive awards and all forms of equity compensation.

Stock Ownership Guidelines

Under Delta’s rigorous stock ownership guidelines, executive officers are required to own a substantial number of shares of Delta stock as indicated in the following table:

 

 

Executive officers must achieve the applicable ownership level within five years of the date they become subject to the guidelines. Each executive officer must hold at least 50% of all net shares received through restricted stock vesting or realized through stock option exercises until the applicable stock ownership guideline is achieved. For this purpose, “net shares” means all shares retained after applicable withholding of any shares for tax purposes. Stock ownership does not include shares an executive officer has the right to acquire through the exercise of stock options. The stock ownership of our executive officers is measured based on the three-month average of the closing price of Delta stock on the NYSE. As of December 31, 2021, all of our named executive officers exceeded their required stock ownership levels.

Equity Award Grant Policy 

Delta’s equity award grant policy provides objective, standardized criteria for the timing, practices and procedures used in granting equity awards. Under this policy, the Personnel & Compensation Committee will consider approval of annual equity awards for management employees in the first quarter of the calendar year. Once approved, the grant date of these awards will be the later of (1) the date the Personnel & Compensation Committee approves the awards and (2) the third business day following the date on which Delta publicly announces its financial results for the most recently completed fiscal year. Equity awards for new hires, promotions or other off-cycle grants may be approved as appropriate and, once approved, these awards will be made on the later of (1) the date on which the grant is approved and (2) the third business day following the date on which Delta publicly announces its quarterly or annual financial results if this date is in the same month as the grant.

Anti-Hedging and Anti-Pledging Policy

Under Delta’s insider trading policy, employees and Board members are prohibited from engaging in transactions in Delta securities involving publicly traded options, short sales and hedging transactions because they may create the appearance of unlawful insider trading and, in certain circumstances, present a conflict of interest. In addition, employees and Board members are prohibited from holding Delta securities in a margin account or otherwise pledging Delta securities as collateral for a loan.

Compensation for Mr. Bastian

The Personnel & Compensation Committee evaluates Mr. Bastian’s performance and makes compensation decisions based on his delivery of the Flight Plan and his progress toward meeting Delta’s long-term business strategies. Mr. Bastian led Delta through a year that rivaled the challenges of 2020. The company began 2021 focused on transitioning the airline toward recovery, prioritizing safety, reliability and customer experience. Even with the headwinds of new virus variants and frequently changing travel restrictions, under Mr. Bastian’s leadership, Delta ended 2021 profitable for the second half, delivering industry-leading operational performance and achieving levels of customer satisfaction that exceeded 2019 levels.

While recognizing his exceptional achievements in 2021, the Personnel & Compensation Committee made no changes to Mr. Bastian’s compensation in 2021. In accordance with our executive compensation philosophy and to continue the alignment of the interests of Mr. Bastian and our shareholders, the vast majority of Mr. Bastian’s compensation opportunity continues to be at risk and dependent on company and stock price performance.

See the Summary Compensation Table and the related footnotes beginning on page 38 for additional information about Mr. Bastian’s compensation.

 

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Post-Employment Compensation

Our executive officers do not have employment contracts, supplemental executive retirement plans, deferred compensation plans or change in control agreements. They are eligible to receive certain benefits in the event of specified terminations of employment, including as a consequence of a change in control. The Personnel & Compensation Committee believes these provisions strengthen the alignment of the executives’ compensation with future company performance. The severance benefits and the forfeiture provisions under our long-term incentive programs for the named executive officers are described in “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control” beginning on page 46.

Tax and Accounting Impact and Policy

The financial and tax consequences to Delta of the executive compensation program are important considerations for the Personnel & Compensation Committee when analyzing the overall design and mix of compensation. The Personnel & Compensation Committee seeks to balance an effective compensation program with an appropriate impact on reported earnings and other financial measures.

Internal Revenue Code Section 162(m) limits deductions for certain compensation to any covered executive to $1 million per year, including performance-based compensation. The inclusion of performance-based awards in the annual limit has not altered the Personnel & Compensation Committee’s commitment in this area because pay for performance is a foundational principle of our executive compensation philosophy.

Equity awards granted under our executive compensation program are expensed in accordance with Statement of Financial Accounting Standards Codification Topic 718, Stock Compensation.

Compensation Committee Report

The Personnel & Compensation Committee has reviewed and discussed with Delta management the Compensation Discussion and Analysis and, based on such review and discussion, the Personnel & Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

THE PERSONNEL & COMPENSATION COMMITTEE

Sergio A. L. Rial, Chair
Francis S. Blake
Jeanne P. Jackson
George N. Mattson
David S. Taylor (member of the Personnel & Compensation Committee until April 20, 2022)
Kathy N. Waller

 

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Executive Compensation Tables

The table below contains information about the compensation of the following named executive officers during 2021: (1) Mr. Bastian, Delta’s principal executive officer; (2) Mr. Janki, Delta’s principal financial officer effective July 19, 2021; (3) Mr. Hauenstein, Mr. Bellemare and Mr. Carter, who were Delta’s three other most highly compensated executive officers on December 31, 2021; and (4) Mr. Carroll and Mr. Chase, who served as Delta's principal financial officers until July 18, 2021.

Summary Compensation Table

 

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Grants of Plan-Based Awards Table

The following table provides information about annual and long-term award opportunities granted to the named executive officers during 2021 under the 2021 MIP and the 2021 LTIP and, in addition for Mr. Bellemare and Mr. Janki, a restricted stock award under the Delta Air Lines, Inc. Performance Compensation Plan. These award opportunities are described in the “Compensation Discussion and Analysis” section of this proxy statement under “Elements of Compensation—Annual Incentive” and “Elements of Compensation—Long-Term Incentives” beginning on page 31.

 

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Outstanding Equity Awards at Fiscal Year-End Table

The following table provides information regarding the outstanding equity awards on December 31, 2021 for each of the named executive officers.

 

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