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

 

Filed by the Registrant

Filed by a Party other than the Registrant

 

Check the appropriate box:
	Preliminary Proxy Statement
	Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
	Definitive Proxy Statement
	Definitive Additional Materials
	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 the appropriate box):
	No fee required.
	Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
	(1) Title of each class of securities to which the transaction applies: (2) Aggregate number of securities to which the transaction applies: (3) Per unit price or other underlying value of the transaction computed pursuant to Exchange Act Rule 0-11      (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of the transaction: (5) Total fee paid:
	Fee paid previously with preliminary materials.
	Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
	(1) Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed:

---

---

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 65 of the attached proxy statement. If you will 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 10, 2019.

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 10, 2019

  2019 PROXY STATEMENT    1

---

LETTER FROM THE CHIEF EXECUTIVE OFFICER

 

 

In 2018, Delta celebrated the 10^th anniversary of our groundbreaking merger with Northwest Airlines, which created the foundation for the transformation of our company. Every year since the merger, we have built on the success of the previous year, learning lessons and honing our strategy to achieve more for our people, our customers, our communities and our shareholders.

First and foremost in our mind is running a safe, reliable and customer-focused operation. In 2018, we had 143 cancel-free days across the entire Delta system including both the mainline and regional carriers, up from 90 days just a year ago. We accelerated revenue growth to 8% on an increasingly diverse revenue base and offset over 90% of the $2 billion increase in fuel costs compared to the prior year. In 2018 more than half of our revenue was generated from premium products, our loyalty program, aircraft maintenance and cargo, relying substantially less on the Main Cabin product. Importantly, we saw improvement in cost performance and reduced non-fuel unit cost growth below the rate of general inflation. We continued to strengthen our brand, achieving a record high domestic net promoter score in 2018, with improvement in all geographic regions. And we continue to launch partnerships with carriers throughout the world — we started a joint venture with Korean Air, signed an agreement with WestJet in Canada and filed for regulatory approval to bring together the separate joint ventures with Virgin Atlantic and Air France-KLM.

We broke records, flying more people than ever and widening the gap with the competition. We unveiled new routes to destinations across the globe and took delivery of world-class aircraft including the A220 as we continue to transform our fleet. We opened a state-of-the-art engine shop and outfitted 60,000 people in stylish and functional new uniforms. We deployed innovative new technology to our pilots, flight attendants and airport agents, enhanced our airports and forged new relationships with other carriers as we accelerate our global expansion. We made significant progress leveling the playing field with state-subsidized Gulf region airlines.

Because our people are our foundation, for 2018 we paid industry-leading compensation, including more than $1.3 billion in profit sharing. For our shareholders, we produced an after-tax return well above our cost of capital, paid $900 million in dividends and repurchased $1.6 billion in shares. We continued to strengthen our balance sheet, lowering our cost of borrowing and improving the funded status of our pension plan.

Throughout it all, Delta people worked tirelessly to maintain our unmatched standard of excellence, safety and reliability. The human touch that Delta people provide is unique, and it’s what continually sets us apart. Our culture — dedicated to servant leadership, a passion for our business, supporting our communities and building a sustainable future — is an advantage no one can match.

Our powerful consumer brand, combined with our unmatched competitive advantages, including the best employees in the business, industry-leading operational reliability, a strong global network, growing customer loyalty and an investment grade balance sheet, support continued advancement as we create long-term value for shareholders. Every day, we become more passionate about running the best airline on the planet and serving as many customers as possible.

Sincerely,

 

ir.delta.com

2019 PROXY STATEMENT    2

---

LETTER FROM THE NON-EXECUTIVE CHAIRMAN OF THE BOARD

 

 

 

As the non-executive Chairman of the Board, thank you for your support of Delta Air Lines. Our Board strives to oversee Delta in a responsible and transparent way to help the company achieve long-term value for you.

The Board and its five committees regularly engage management in robust discussions about Delta's risks, strategies, priorities and opportunities, both domestically and internationally. We also work hard on your behalf to oversee safety and security, executive compensation and succession, and environmental, social and governance (ESG) matters, as well as one of our key competitive advantages — the Delta culture.

And we take our responsibilities seriously regarding Board refreshment and succession planning. Seven of our current 12 Board members joined the Board in the last five years, and almost half our Board is diverse.

We are proud of our foundation of good governance that includes electing all directors annually by majority voting, providing for proxy access, having an anti-hedging and anti-pledging policy for all employees and the Board, imposing meaningful stock ownership guidelines for executive officers and the Board, requiring outside director retirement at age 72 and prohibiting ownership of competitor airlines’ stock by the Board and officers.

Two recent developments further enhance this solid foundation:

We engage our shareholders in many ways, and we encourage you to share suggestions and concerns with us. In particular, I want to encourage you to review our proxy statement and vote.

We appreciate your support as shareholders and customers.

Sincerely,

 

  2019 PROXY STATEMENT    3

---

  ›TABLE OF CONTENTS  

 

ir.delta.com

2019 PROXY STATEMENT    4

---

Back to Contents

PROXY STATEMENT SUMMARY

The Delta Difference

With a 90-year history of customer service, Delta provides scheduled air transportation for passengers and cargo throughout the United States and around the world. Powered by our approximately 89,000 Delta people, our network is supported by a fleet of aircraft that is varied in size and capabilities, giving us flexibility to adjust aircraft to the network. Our relationships with foreign carriers improve our access to international markets, allowing us to globally integrate air transportation services. Over the years, we’ve built a strong financial foundation, record customer satisfaction, more resilient, higher margin revenue streams, a global network and an investment grade balance sheet.

 

 

  2019 PROXY STATEMENT    5

---

Back to Contents

2018 Performance Highlights

Delta people rose to the challenges of 2018 to produce excellent financial results, record-setting operational reliability and strong improvements in customer satisfaction. We confirmed our position as a reliable, customer-focused airline that is producing strong profits and cash flows, enabling improved balance sheet strength and producing solid return of capital to shareholders.

Our financial highlights from the past year underscore our continued progress.

Below are some of the categories of performance measures included in our incentive compensation plans that demonstrate our pay for performance philosophy. See pages 32-33 for further information about the performance measures included in these plans.

PRE-TAX INCOME

 

OPERATIONAL RELIABILITY AND CUSTOMER SERVICE

 

CONTINUED BALANCE SHEET PERFORMANCE

 

CUMULATIVE TOTAL RETURNS

 

 

ir.delta.com

2019 PROXY STATEMENT    6

---

Back to Contents

Director Nominees

 

  2019 PROXY STATEMENT    7

---

Back to Contents

Board of Directors and Governance Highlights

Delta has a history of a strong, independent Board, composed of seasoned members with diversity of experiences. The Board is committed to sound corporate governance practices in line with evolving best practices.

 

 

Corporate Governance and Board Practices

 

ir.delta.com

2019 PROXY STATEMENT    8

---

Back to Contents

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, which we refer to as our Flight Plan, by closely linking pay to performance and aligning the interests of all Delta employees, including executive officers, with our customers and shareholders.

Investor Engagement Efforts

We have long-standing, active engagement with our investors. Our senior management met with analysts and investors at our annual Investor Day in December 2018 and more than 10 industry conferences throughout 2018. We have dedicated resources to engage with all shareholders through monitoring of investor relations e-mail and using various media to convey key investment messages to a broader audience. In 2018, Delta was named as a “Most Honored Company” by the financial journal Institutional Investor, which ranked Delta's investor relations effort number 1 in the airline category.

 

 

 

  2019 PROXY STATEMENT    9

---

Back to Contents

Corporate Social Responsibility Commitment

We are committed to being a good steward of the environment, a positive force in our communities and a great place to work and fly. Whether it’s our employees, the nearly 200 million customers who trust us with their travel each year, or the millions who make up the communities where we live, work and serve — making people our priority has always been the backdrop for all our efforts.

Our people and our culture are the foundation of our success. Our culture also involves giving back to the communities we serve as well as serving important global initiatives. In 2018, Delta and The Delta Air Lines Foundation contributed $50 million as part of our annual commitment to give one percent of net income to key charitable organizations in our communities. We also have been recognized as a national leader in our commitment to anti-human trafficking efforts, which includes continuing to train our front-line employees to help identify and report suspected instances of human trafficking.

 

 

ir.delta.com

2019 PROXY STATEMENT    10

---

Back to Contents

Environmental, Social and Governance (ESG) Sustainability Highlights

Delta recognizes alignment between the creation of long-term value for our shareholders and positively impacting our people, the environment and our communities. At our foundation is a strong set of core values enumerated by our founder 90 years ago, which we live by today.

Community Impact

Governing the Sustainability Program

Sustainability Recognition in 2018

 

 

More information about our sustainability practices is in our Corporate Responsibility Report, reporting GRI, SASB and TCFD indicators, which can be found at www.delta.com/sustainability, but is not incorporated by reference into this proxy statement.

 

  2019 PROXY STATEMENT    11

---

Back to Contents

PROPOSAL 1 — ELECTION OF DIRECTOR

All Delta directors are elected annually. At the annual meeting, each director will be elected by the vote of a majority of the votes cast. This means the number of votes cast “for” a director must exceed 50% of the votes cast with respect to that director (excluding abstentions). Each director elected will hold office until the next annual meeting of shareholders and the election of his or her successor. See page 61 for more information about voting at the annual meeting.

Delta’s Bylaws provide that any director not receiving a majority of the votes cast at the annual meeting must offer to tender his or her resignation to the Board of Directors. The Corporate Governance Committee will make a recommendation to the Board of Directors whether to accept the resignation. The Board will consider the recommendation and publicly disclose its decision within 90 days after the certification of the election results.

Board Refreshment Process

The Corporate Governance Committee recommends to the Board of Directors nominees for election to the Board.

 

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. In accordance with Delta’s Corporate Governance Principles, the Committee and the Board assess potential nominees (including incumbent directors) based on factors such as the individual’s business experience, character, judgment, diversity of experience, international background and other matters relevant to the Board’s needs and objectives at the particular time. Independence, financial literacy, and the ability to devote significant time to Board activities and to the enhancement of the nominee’s knowledge of Delta’s business are also factors considered for Board membership.

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. The Committee balances the desire for continuity on the Board with the benefits of fresh perspectives and additional experiences to align with the changing business.

The Committee retains third-party search firms from time to time to assist in identifying and preliminarily screening potential Board members who have experience that would complement and enhance the current Board.

 

ir.delta.com

2019 PROXY STATEMENT    12

---

Back to Contents

IMPORTANT SKILLS AND EXPERIENCES OF INDEPENDENT DIRECTORS

 

 

  2019 PROXY STATEMENT    13

---

Back to Contents

2019 Nominees for Director

After considering the recommendations of the Corporate Governance Committee, the Board set the number of directors at 12 as of the date of the annual meeting and nominated all current directors to stand for re-election except Douglas R. Ralph, who is retiring from the Board.

The Board believes that each of the nominees is qualified to serve as a director and will be able to stand for election. If not, the Board may name a substitute nominee or reduce the number of directors. If a substitute is named, the proxies will vote for the substitute nominee. In addition to the specific skills and experience for each nominee listed in the chart on the prior page, qualifications of each nominee that were considered by the Board follow each nominee’s biographical description on the following pages.

ALPA Nominee

Delta, the Air Line Pilots Association, International (ALPA), the collective bargaining representative for Delta pilots, and the Delta Master Executive Council, the governing body of the Delta unit of ALPA (Delta MEC), have an agreement whereby Delta agrees (1) to cause the election to the Board of Directors of a Delta pilot designated by the Delta MEC who is not a member or officer of the Delta MEC or an officer of ALPA (Pilot Nominee); (2) at any meeting of shareholders at which the Pilot Nominee is subject to election, to re-nominate the Pilot Nominee or nominate another qualified Delta pilot designated by the Delta MEC to be elected to the Board of Directors and to use its reasonable best efforts to cause such person to be elected to the Board; and (3) in the event of the Pilot Nominee’s death, disability, resignation, removal or failure to be elected, to elect promptly to the Board a replacement Pilot Nominee designated by the Delta MEC to fill the resulting vacancy.

Pursuant to this provision, the Delta MEC has designated Christopher A. Hazleton to be nominated for election to the Board at the annual meeting. If elected, Mr. Hazleton would succeed Mr. Ralph, who will retire from the Board after the annual meeting.

The compensation of Mr. Ralph and Mr. Hazleton as Delta pilots is determined under the collective bargaining agreement between Delta and ALPA. During 2018, Mr. Ralph received $448,245 in compensation (which includes: $335,508 in flight earnings, $50,634 in shared rewards/profit sharing payments and $62,103 in Delta contributions related to a defined contribution plan) and Mr. Hazleton received $379,608 in compensation (which includes: $287,619 in flight earnings, $39,629 in shared rewards/profit sharing payments and $52,360 in Delta contributions related to a defined contribution plan). As Delta pilot representatives on the Board, Mr. Ralph and Mr. Hazleton are not separately compensated for their service as a director.

 

 

ir.delta.com

2019 PROXY STATEMENT    14

---

Back to Contents

 

 

 

  2019 PROXY STATEMENT    15

---

Back to Contents

 

 

 

ir.delta.com

2019 PROXY STATEMENT    16

---

Back to Contents

 

 

 

  2019 PROXY STATEMENT    17

---

Back to Contents

 

 

 

 

ir.delta.com

2019 PROXY STATEMENT    18

---

Back to Contents

 

 

 

BOARD OPERATIONS

During 2018, the Board of Directors met 9 times. Each director who served on the Board during 2018 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. It is the Board’s policy that directors are encouraged to attend the annual meeting. All of Delta’s directors attended the annual meeting in 2018. During the year the Board routinely held executive sessions without the Chief Executive Officer or any other management director. 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. The Chairman’s responsibilities include:

 

Board Committees

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 for each of these committees in 2018 and their primary responsibilities are listed on the next page. A complete 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/.

 

  2019 PROXY STATEMENT    19

---

Back to Contents

AUDIT COMMITTEE

 

CORPORATE GOVERNANCE COMMITTEE

 

FINANCE COMMITTEE

 

PERSONNEL & COMPENSATION COMMITTEE

 

ir.delta.com

2019 PROXY STATEMENT    20

---

Back to Contents

SAFETY & SECURITY COMMITTEE

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 Corporate Governance Committee oversees the evaluations and re-examines the process for the Board and Committee evaluations each year. For the 2018 evaluation, the Chief Legal Officer spoke individually with each Board member to discuss specific topics, such as issues of importance to the Board for 2019, strategic planning, succession planning and key attributes of new directors, and to obtain his or her assessment of Board and committee performance, functioning and operations during the year. These discussions also allowed time for engagement with each director on any other topic he or she desired to discuss. The comments of the directors were compiled on an anonymous basis and reviewed by the Board and the Board committees in executive sessions. The Chairman of the Board and the chairs of the committees address follow-up matters from the evaluations. These included continuing focus on strategy, cybersecurity, sustainability, risk management and investments, as well as operational matters, among other items. The Board believes this annual evaluation process supports its effectiveness and continuous improvement.

Board Oversight of Risk Management

The Board of Directors has ultimate responsibility to oversee Delta’s enterprise risk management program (ERM). Headed by the Senior Vice President-Finance and Controller, 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 Board discusses risk throughout the year, particularly when reviewing operating and strategic plans and when considering specific actions for approval. Depending on the nature of the risk, the responsibility for oversight of selected risks may be delegated to appropriate committees of the Board, with material findings reported to and discussed with the full Board. Delegations of risk oversight by the Board include:

 

 

The Executive Vice President-Chief Information Officer and the Vice President-Chief Information Security Officer and their staffs regularly report to the Audit Committee on cybersecurity and information technology risks and initiatives.

 

  2019 PROXY STATEMENT    21

---

Back to Contents

Delta’s ERM process continues to evolve. Leaders of the business divisions, working closely with division finance teams, have responsibility for risk identification, development of business risk mitigation plans and monitoring their implementation. The corporate safety and security department oversees the risk management process for risks related to customer, employee, aircraft and airport safety and security matters. A senior management level, cross-divisional council, the Delta Risk, Privacy and Compliance Council (DRPCC), meets quarterly and includes the Chief Financial Officer, Chief Information Officer, Chief Legal Officer, Controller, Chief Information Security Officer, Chief Compliance Officer and Vice President-Corporate Audit, among others. The DRPCC is responsible for overseeing all of the company business and safety and security risks, including the following: monitoring risk tolerance levels; defining organizational responsibilities for risk management; identifying significant risks to Delta; and risk mitigation and management strategies based on Delta’s risk tolerance levels as well as monitoring the business to determine that risk mitigation activities are in place and operating. As appropriate, various officers and employees attend meetings of the DRPCC and follow up on issues addressed by the DRPCC.

The Board of Directors believes that Delta’s leadership structure, combined with the roles of the Board, its committees, and the DRPCC, provide the appropriate leadership for effective risk oversight.

 

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, P.O. Box 20574, Atlanta, Georgia, 30320. 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.

 

ir.delta.com

2019 PROXY STATEMENT    22

---

Back to Contents

SHARE OWNERSHIP

Beneficial Ownership of Securities

Directors, Nominees for Director and Executive Officers

The following table sets forth the number of shares of Delta common stock beneficially owned as of April 15, 2019, by each director and director nominee, each person named in the Summary Compensation Table in this proxy statement, and all directors and executive officers as a group. Unless otherwise indicated by footnote, the owner exercises sole voting and investment power over the shares.

 

 

  2019 PROXY STATEMENT    23

---

Back to Contents

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 15, 2019.

 

Section 16 Beneficial Ownership Reporting Compliance

Section 16(a) of the 1934 Act requires our directors, executive officers and persons who beneficially own more than 10% of a registered class of our equity securities (reporting persons) to file certain reports concerning their beneficial ownership of our equity securities. We believe that all reporting persons timely complied with their Section 16(a) filing obligations during 2018.

 

ir.delta.com

2019 PROXY STATEMENT    24

---

Back to Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This section of the proxy statement describes the compensation of our named executive officers for 2018. It also discusses how our executive compensation program reflects our compensation philosophy and objectives, including the importance of linking pay to performance.

 

2018 Named Executive Officers

 

2018 Highlights

Delta delivered another year of strong financial, operational and customer service performance in 2018 by leveraging our five key competitive advantages. As we look to 2019 and beyond, we will continue to leverage these strengths to drive long-term value for our shareholders through top-line growth, margin expansion and prudent deployment of our capital.

DELTA'S COMPETITIVE ADVANTAGES

 

 

  2019 PROXY STATEMENT    25

---

Back to Contents

 

 

 

ir.delta.com

2019 PROXY STATEMENT    26

---

Back to Contents

OUR EMPLOYEE COMMITMENT

We believe Delta's most important competitive advantage is our approximately 89,000 employees who are the face of our brand. Our strong financial, operational and customer service results in 2018 would not have been possible without the dedication and determination of our people. During 2018, we continued our commitment to promoting a culture of open, honest and direct communications, making Delta a great place to work, and building an environment that encourages diversity, integrity and respect.

 

 

In addition to these significant investments, we strive to make Delta a great place to work by listening to our employees so we can provide programs and resources that fully engage them, help them deepen their skill sets and further their careers at Delta. We are committed to creating a diverse and inclusive workforce, empowering professional growth and development and investing in our employees’ health, emotional and financial wellness. We are also committed to internal pay parity based on role, qualifications, experience and merit.

These efforts have been recognized internally and, as shown on the next page, externally. In a 2018 employee survey in which more than 47,000 Delta people participated (over 50% of Delta's employees), 85% said their workplace was “a great place to work” and 86% felt a sense of pride when looking at what the company has accomplished.

  2019 PROXY STATEMENT    27

---

Back to Contents

 

 

 

 

TALENT PLANNING AND DEVELOPMENT

Talent planning and development are important at all levels within Delta—from the executive ranks to our frontline employees. The Personnel & Compensation Committee continued to make this effort a high priority in 2018. The Board of Directors is regularly updated on key talent indicators for our leaders, including diversity, recruiting and development programs. In addition, Board members interact with potential future leaders through formal presentations and informal events.

Administration of the Executive Compensation Program

 

ir.delta.com

2019 PROXY STATEMENT    28

---

Back to Contents

 

 

Executive Compensation Philosophy and Objectives

Our executive compensation philosophy is to achieve Delta’s short-term and long-term business goals, which we refer to as our Flight Plan, 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 2018 compensation at risk. In fact, 94% of total compensation for the Chief Executive Officer and 89% of total compensation for the other named executive officers was contingent on Delta achieving ambitious financial, operational and customer service goals or varied with stock price performance. Furthermore, the majority of their total compensation is paid in Delta stock, which, together with our stock ownership and retention guidelines, aligns the interests of management to the interest of shareholders.

 

  2019 PROXY STATEMENT    29

---

Back to Contents

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. Based on our strong performance in a challenging fuel cost environment in 2018 we paid 126.51% of target under our annual incentive plan and 185.87% of target under the 2016 long-term incentive program.

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 structured both our annual and long-term incentive plans to ensure that executives do not receive their full incentive payouts unless our people also receive payment under the Profit Sharing Program for the year.

 

 

 

 

 

Say on Pay Voting Results

At our 2018 annual meeting, we asked shareholders for a non-binding “say on pay” advisory vote to approve the 2017 compensation of the named executive officers. Similar to previous years, the holders of over 97% of the shares present and entitled to vote at the 2018 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.

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:

 

 

ir.delta.com

2019 PROXY STATEMENT    30

---

Back to Contents

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 been 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 2018. The companies in our peer group are:

 

2018 Compensation Decisions

The following changes, which are discussed further below, were made to our executive compensation program in 2018:

 

  2019 PROXY STATEMENT    31

---

Back to Contents

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 30, 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.

With our culture as the foundation, our goals to run a customer-focused airline, build a global airline franchise and generate leading shareholder returns are the pillars of the 2018 Flight Plan. The mix of absolute and relative performance measures included in our 2018 annual and long-term incentive plans are distinct and demonstrate how the Personnel & Compensation Committee incorporates the elements of our Flight Plan to drive performance.

We made changes to our annual and long-term incentive performance measures in 2017 to support a focus on positive revenue growth and global alliances. This included shifting Total Revenue per Available Seat Mile (TRASM) from an annual to a long-term measure, expanding the scope of the international net promoter score measure to track distinct regions, as well as introducing the relative total shareholder return measure to the long-term incentive plan. Given the positive momentum in these areas last year and their continued focus for future years, the Personnel & Compensation Committee determined not to make any further changes to the performance measures for 2018.

In setting the annual and long-term performance goals for each performance measure, the Personnel & Compensation Committee reviews our business plans and considers other factors, including our past variance to targeted performance, our historical performance, economic and industry conditions and the performance of other airlines. In certain cases, this analysis may cause the Committee to set lower targets than in previous years. We set challenging, but achievable goals, including those that are realizable only as a result of exceptional performance, for the company and the named executive officers to drive the achievement of our short- and long-term objectives.

 

ir.delta.com

2019 PROXY STATEMENT    32

---

Back to Contents

Annual Incentive Plan

Long-Term Incentive Program

 

BASE SALARY

The Personnel & Compensation Committee reviews the base salaries of our executive officers annually. There is no set schedule for base salary increases. As shown in the following chart, the Personnel & Compensation Committee approved base salary increases for each of the named executive officers effective February 1, 2018. These changes were based on individual performance, internal parity considerations and a competitive market review. Even with these increases, the base salaries of our named executive officers remain below the median of the peer group for their respective positions.

 

 

  2019 PROXY STATEMENT    33

---

Back to Contents

ANNUAL INCENTIVE

The 2018 Management Incentive Plan (2018 MIP) links pay and performance by providing management employees with a compensation opportunity based on Delta’s achievement of certain Flight Plan goals in 2018. The 2018 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 2018 MIP are provided in cash, however, to provide further alignment between our executive officers and our people, the executive officers’ 2018 MIP awards are subject to the following conditions if there is no Profit Sharing Program payout to employees for the year:

The following chart shows the performance measures for the named executive officers under the 2018 MIP and the actual performance for each measure in 2018.

 

ir.delta.com

2019 PROXY STATEMENT    34

---

Back to Contents

The target award opportunities under the 2018 MIP, which have not changed since 2016, are expressed as a percentage of each participant’s 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 target cash compensation opportunities (base salary and MIP) for our named executive officers remain generally below the peer group median.

Summarized in the table below are the 2018 MIP awards earned by each named executive officer. Because there was a payout under the Profit Sharing Program for 2018, payments under the 2018 MIP were made in cash.

 

 

 

 

LONG-TERM INCENTIVES

2018 Long-Term Incentive Program

The 2018 Long-Term Incentive Program (2018 LTIP) links pay and performance by providing management employees with a compensation opportunity that aligns the interest 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 2018 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 award allocations shown below were selected to balance the incentive opportunity between Delta’s financial performance relative to other airlines, internal company performance and stock price performance. In 2018, the Personnel & Compensation Committee adjusted Mr. West's award allocation to increase his performance stock options exposure to align with Mr. Hauenstein. This mix and the other terms of the 2018 LTIP are intended to balance the performance and retention incentives with the volatility of airline stocks.

 

 

 

 

 

Performance Awards

Performance awards are dollar-denominated long-term incentive opportunities payable in Delta stock to executive officers and in cash to other participants. The chart on the following page shows the range of potential payments of the performance awards based on the 2018 LTIP’s four performance measures over the three-year period ending December 31, 2020.

 

  2019 PROXY STATEMENT    35

---

Back to Contents

 

Restricted Stock

The 2018 LTIP provides that restricted stock will vest in three equal installments on February 1, 2019, February 1, 2020 and February 1, 2021, subject to forfeiture in certain circumstances. Restricted stock is eligible for dividends, but dividends will not become payable until the restrictions on the underlying stock lapse. The value of a participant’s restricted stock award will depend on the price of Delta stock when the award vests.

Performance Stock Options

Stock options are inherently performance-based, as they provide realized value only if the stock price appreciates. Nevertheless, the Personnel & Compensation Committee added a performance hurdle based on employees receiving a payout under the Profit Sharing Program to further align our named executive officers’ interests with the interests of our people. The 2018 LTIP generally provides that the performance stock options will become exercisable on the vesting dates described in the chart below, subject to the achievement of the following performance measures:

 

ir.delta.com

2019 PROXY STATEMENT    36

---

Back to Contents

Because our people received a payout under the Profit Sharing Program for 2018, one-third of the named executive officers’ performance stock options vested and became exercisable on February 6, 2019 (the date on which the Personnel & Compensation Committee certified the performance measure was satisfied) and the remaining two-thirds will vest in equal installments on each of February 1, 2020 and February 1, 2021, subject to forfeiture in certain circumstances.

For additional information about the vesting and possible forfeiture of the 2018 LTIP awards, see “Post-Employment Compensation—Potential Post-Employment Benefits upon Termination or Change in Control—Long-Term Incentive Programs” on page 47.

The 2016 Long-Term Incentive Program Payouts

In 2016, the Personnel & Compensation Committee granted the named executive officers performance awards under the 2016 Long-Term Incentive Program (2016 LTIP). We reported these award opportunities in our 2017 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 average annual operating income margin relative to the composite performance of an industry peer group, Delta’s customer service performance and return on invested capital over the three-year performance period ended December 31, 2018. As mentioned in the Performance Measure Selection discussion on page 32, the performance measures included in the 2017 and 2018 LTIPs have been changed from the measures used to determine the 2016 LTIP payouts.

Summarized in the chart below are the performance results certified by the Personnel & Compensation Committee for the performance awards under the 2016 LTIP and the resulting percentage of target award opportunity earned:

 

 

 

 

 

 

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 on page 41 for information regarding benefits received in 2018 by the named executive officers.

 

  2019 PROXY STATEMENT    37

---

Back to Contents

Risk Assessment

The Personnel & Compensation Committee requested Meridian conduct a risk assessment of Delta’s executive compensation program. Based on this review, Meridian 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.

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 aligned 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 stock ownership guidelines, executive officers are required to own shares of Delta stock as shown below:

 

 

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, 2018, all of our named executive officers exceeded their required stock ownership level.

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 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 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. In 2018, Mr. Bastian led Delta to exceed its operational, customer-service goals and most of its financial goals despite challenging headwinds, while also advancing the company’s future success by developing our global relationships, upgrading our fleet, making technology a competitive advantage and prioritizing the company’s diversity, inclusion and sustainability efforts.

 

ir.delta.com

2019 PROXY STATEMENT    38

---

Back to Contents

The Personnel & Compensation Committee recognized Mr. Bastian’s performance by increasing his target award opportunity under the 2018 LTIP to $11.5 million. This change is consistent with our pay for performance philosophy and provides incentive for him to focus on long-term improvements in company performance that will lead to greater shareholder value. The actual payout Mr. Bastian realizes on his 2018 LTIP award will depend upon achievement of the plan’s performance measures and stock price performance over the three-year performance period ending in 2020. In addition, after also reviewing market factors, the Personnel & Compensation Committee increased Mr. Bastian’s base salary to $900,000. With these changes, Mr. Bastian's total compensation was below the peer group median.

As the following graphs illustrate, a substantial percentage of Mr. Bastian’s compensation is at-risk and concentrated in equity-based awards.

 

 

 

 

 

 

 

 

See the Summary Compensation Table and the related footnotes on page 41 for additional information about Mr. Bastian’s compensation.

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” on page 47.

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. Prior to 2018, this limitation did not apply to the chief financial officer or compensation that met the tax code requirements for qualifying performance-based compensation. Changes in the tax law effective January 1, 2018, expanded the limitation on deductibility to include the chief financial officer and eliminated the performance-based exception (except in the case of certain arrangements in place as of November 2, 2017). The elimination of the performance-based exception has not altered the Personnel & Compensation Committee's commitment to a pay for performance executive compensation program.

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

 

  2019 PROXY STATEMENT    39

---

Back to Contents

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

Daniel A. Carp, Chair
Francis S. Blake
Jeanne P. Jackson
George N. Mattson
Sergio A. L. Rial

Compensation Committee Interlocks and Insider Participation

None of the members of the Personnel & Compensation Committee is a former or current officer or employee of Delta or has any interlocking relationships as set forth in applicable SEC rules.

 

ir.delta.com

2019 PROXY STATEMENT    40

---

Back to Contents

Executive Compensation Tables

The table below contains information about the compensation of the following named executive officers during 2018: (1) Mr. Bastian, Delta’s principal executive officer; (2) Mr. Jacobson, Delta’s principal financial officer; and (3) Mr. Hauenstein, Mr. West and Mr. Carter, who were Delta’s three other most highly compensated executive officers on December 31, 2018.

Summary Compensation Table

 

  2019 PROXY STATEMENT    41

---

Back to Contents

 

ir.delta.com

2019 PROXY STATEMENT    42

---

Back to Contents

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 2018 under the 2018 MIP and the 2018 LTIP. These award opportunities are described in the “Compensation Discussion and Analysis” section of the proxy statement under “Elements of Compensation — Annual Incentive” and “Elements of Compensation — Long-Term Incentives” beginning on page 34.

 

  2019 PROXY STATEMENT    43

---

Back to Contents

Outstanding Equity Awards at Fiscal Year-End Table

The following table provides information regarding the outstanding equity awards on December 31, 2018 for each of the named executive officers.

 

ir.delta.com

2019 PROXY STATEMENT    44

---

Back to Contents

 

Option Exercises and Stock Vested Table

The following table provides information regarding the exercise of stock options and the vesting of stock for the named executive officers in 2018.

 

  2019 PROXY STATEMENT    45

---

Back to Contents

Post-Employment Compensation

Defined Benefit Pension Benefits

The Delta Retirement Plan (Retirement Plan) is a broad-based, non-contributory qualified defined benefit pension plan for Delta’s ground and flight attendant employees. To participate in the Retirement Plan, an employee must have completed 12 months of service before the plan was frozen on December 31, 2005. As a result, Mr. Bastian and Mr. Jacobson are eligible to participate in the Retirement Plan, but Mr. Carter, Mr. Hauenstein and Mr. West are not. We do not offer any supplemental executive retirement plans or deferred compensation plans to the named executive officers.

Eligible ground and flight attendant employees hired (or rehired) on or before July 1, 2003, receive Retirement Plan benefits based on a final average earnings (FAE) formula. Effective July 1, 2003, the Retirement Plan transitioned to a cash balance plan and benefits for ground and flight attendant employees hired (or rehired) after that date are generally based solely on the cash balance formula. Retirement Plan participants who were employed on July 1, 2003, receive Retirement Plan benefits based on the higher of the FAE and cash balance formulas.

Under the cash balance formula, 6% of a participant’s pay (base salary and, if any, eligible annual incentive compensation) was credited annually until January 1, 2006, to a hypothetical account, which account is credited with an annual interest credit based on a market rate of interest. Interest credits will continue to be credited annually regardless of the plan’s frozen status. At termination of employment, an amount equal to the balance of the participant’s cash balance account is payable to the participant, at his or her election, in the form of an immediate or deferred lump sum or equivalent monthly benefit.

Benefits under the FAE formula are based on a participant’s (1) final average earnings; (2) years of service prior to January 1, 2006; (3) age when benefit payments begin (but not before age 52); and (4) primary Social Security benefit. Final average earnings are the average of the participant’s highest average monthly earnings (base salary and, if any, eligible annual incentive compensation) for the 36 consecutive months in the 120-month period preceding the earlier of termination of employment and January 1, 2006. The monthly retirement benefit at the normal retirement age of 65 equals 60% of the participant’s final average earnings, reduced for years of service less than 30 (determined as of December 31, 2005) and by 50% of the participants’ primary Social Security benefit (also reduced for less than 30 years of service). Benefits determined under the FAE formula are paid in the form of a monthly annuity.

 

Pension Benefits Table

The table below shows certain pension benefit information for Mr. Bastian and Mr. Jacobson as of December 31, 2018.

 

ir.delta.com

2019 PROXY STATEMENT    46

---

Back to Contents

Potential Post-Employment Benefits upon Termination or Change in Control

This section describes the potential benefits the named executive officers may receive under certain termination of employment scenarios, including in connection with a change in control, assuming termination of employment on December 31, 2018.

The definitions of “cause,” “change in control,” “disability,” “good reason” and “retirement,” as such terms are used in the following sections, are summarized below.

 

SEVERANCE PLAN

Officers and director level employees are generally eligible to participate in Delta’s Officer and Director Severance Plan (Severance Plan), which may be amended at any time by Delta. The following chart summarizes the principal benefits the named executive officers are eligible to receive under the Severance Plan.

To receive benefits under the Severance Plan, participants must enter into a general release of claims against Delta and non-competition, non-solicitation, non-disparagement and confidentiality covenants for the benefit of Delta.

The Severance Plan does not provide for any excise tax gross-ups for benefits received in connection with a change in control. If a participant is entitled to benefits under the Severance Plan in connection with a change in control, the amount of such benefits will be reduced to the statutory safe harbor under Section 4999 of the Internal Revenue Code if this results in a greater after-tax benefit than if the participant paid the excise tax.

 

LONG-TERM INCENTIVE PROGRAMS

The following chart summarizes the treatment of performance awards, restricted stock and performance stock options awarded under Delta’s long-term incentive programs (LTIP) for 2016, 2017 and 2018 under various termination of employment scenarios.

 

 

 

  2019 PROXY STATEMENT    47

---

Back to Contents

 

ANNUAL INCENTIVE PLAN

Delta’s 2018 Management Incentive Plan (MIP) generally provides that a participant whose employment with Delta terminates prior to the end of the workday on December 31, 2018 is not eligible for a 2018 MIP payment. If, however, the participant’s employment is terminated (1) due to death or disability; (2) due to retirement; or (3) by Delta without cause or for any other reason that would entitle the participant to benefits under the Severance Plan, the participant is eligible for a pro rata 2018 MIP payment based on (a) the number of months during 2018 the participant was employed in a MIP-qualified position and (b) the terms and conditions of the 2018 MIP that would have applied if his or her employment had continued through December 31, 2018.

 

TRIGGERING EVENTS

As noted above, eligibility for severance benefits and acceleration of the vesting of equity awards are triggered by certain events. The terms “cause,” “change in control,” “disability,” “good reason” and “retirement,” as they apply to the named executive officers, are summarized below.

 

ir.delta.com

2019 PROXY STATEMENT    48

---

Back to Contents

 

RETIREE FLIGHT BENEFITS

A named executive officer who retires from Delta at or after age 52 with at least ten years of service or with at least 25 years of service regardless of age, may continue to receive Flight Benefits (see footnote 7(d) to the Summary Compensation Table on page 42 for a description of Flight Benefits including survivor travel benefits) during retirement, except the unused portion of the two annual allowances will not accumulate into succeeding years (Retiree Flight Benefits).

Notwithstanding the above, a person who is first elected an officer on or after June 8, 2009, will not receive reimbursement for taxes for Retiree Flight Benefits. Delta also does not provide reimbursement for taxes associated with travel by the surviving spouse or domestic partner of any officer.

In exchange for certain non-competition, non-solicitation, non-disparagement and confidentiality covenants for the benefit of Delta and a general release of claims against Delta, an officer who served in that capacity during the period beginning on the date Delta entered into the merger agreement with Northwest Airlines and ending on the date the merger occurred, or who joined Delta from Northwest on the date the merger occurred and who had been a Northwest officer on the date Delta entered into the merger agreement, will receive, on his termination of employment (other than by death or by Delta for cause), a vested right to Retiree Flight Benefits, regardless of the officer’s age and years of service at his termination of employment.

Table Regarding Potential Post-Employment Benefits upon Termination or Change in Control

The following table describes the termination benefits for each named executive officer, assuming termination of employment on December 31, 2018. Also included is a column that describes the benefits, if any, each named executive officer would have received in connection with a change in control (CIC). Further, because termination is deemed to occur at the end of the workday on December 31, 2018, the named executive officer would have earned his 2018 MIP award and the performance award under the 2016 LTIP, to the extent otherwise payable. Accordingly, these awards are unrelated to the termination of employment.

We have not included in this section any benefit that is available generally to all employees on a non-discriminatory basis such as payment of retirement, disability and death benefits. See “Defined Benefit Pension Benefits” above, for a discussion of the benefits accrued for eligible named executive officers under the Delta Retirement Plan. On December 31, 2018, only Mr. Bastian, Mr. Hauenstein and Mr. West were eligible to retire under the definition of retirement described above. The other named executive officers are not eligible to retire under these requirements and, therefore, are not eligible for any retirement-related compensation or benefits.

 

  2019 PROXY STATEMENT    49

---

Back to Contents