AAL 2019 Proxy Statement

targeted compensation, and for our other named executive officers, their average 2018 realizable compensation was only 55% of their targeted compensation. The Compensation Committee has adopted an equity grant policy to standardize the timing, practices and procedures in granting equity awards. The policy provides that equity awards, other than new hire, promotion or special purpose grants, will be granted once per year at that second regularly scheduled meeting of the Compensation Committee or at an Equity Incentive Committee meeting (with respect to awards to non-executive employees) or at a special meeting held for this purpose as close in time to the regularly scheduled meeting as possible. 2016 Equity Awards Our named executive officers’ 2016 annual equity grants were comprised of both time-vesting and performance-vesting RSUs. The performance-vesting RSUs vested based on the Company’s achievement of a pre-tax income margin, excluding special charges, for the three years ending December 31, 2018 relative to the weighted average pre-tax income margin over the same period for a pre-defined group of airlines. Based on our achievement of 72.5% relative to this peer group, which was certified by the Compensation Committee on April 17, 2019, 0.725 shares of common stock were eligible to vest in respect of each RSU. These RSUs vested on April 20, 2019. Change in Control and Severance Benefits Change in control and severance benefits are a customary component of executive compensation, which are generally used to reinforce and encourage executives’ continued attention and dedication to their assigned duties without the distraction arising from the possibility of a change in control. While we have historically provided change in control severance benefits pursuant to employment agreements or change in control severance agreements with our named executive officers for these reasons, as discussed more fully below, since April 2017, none of our executive officers has been a party to any individual employment or severance agreement providing change in control or severance benefits. Information on the estimated payments and benefits that our named executive officers would have been eligible to receive in the event of a termination or change in control as of December 31, 2018 pursuant to our equity plans, STIP and other arrangements are set forth in “Potential Payments Upon Termination or Change in Control” beginning on page 61. Mr. Parker As required by the terms of the merger agreement with US Airways, we assumed the employment agreement Mr. Parker had entered into with US Airways prior to 2010, which provided for severance payments upon qualifying terminations, including certain terminations following a change in control, and termination other than for misconduct or a resignation for good reason. In April 2016, at Mr. Parker’s request, our Compensation Committee agreed to eliminate Mr. Parker’s employment agreement, and Mr. Parker is no longer contractually entitled to the change in control and severance protections provided by the employment agreement. In connection with the replacement of Mr. Parker’s cash compensation with equity compensation starting on May 1, 2015, the Compensation Committee determined that in light of the fact that equity awards granted to Mr. Parker in lieu of his cash compensation are subject to extended vesting periods, in the event of Mr. Parker’s termination of employment for any reason other than misconduct, certain of Mr. Parker’s equity incentives will vest to the extent necessary to keep Mr. Parker whole for the value of the base salary or annual target cash incentive Mr. Parker otherwise would have received through his termination date. If Mr. Parker’s employment had been terminated as of December 31, 2018, the value of the accelerated portion of his equity incentives would have been $3.6 million. Former US Airways Executive Officers We also assumed the executive change in control and severance benefits agreements of Messrs. Isom, Kerr and Johnson, and Ms. Elise Eberwein, each of whom served at US Airways prior to our merger with US Airways. Each of these agreements was entered into with US Airways prior to 2010 and provided for severance payments upon qualifying terminations. In April 2017, at their request, Messrs. Isom, Kerr and Johnson, and Ms. Eberwein, voluntarily terminated their agreements. As a result of the voluntary forfeiture of these agreements, our executive officers are no longer contractually entitled to any cash severance or continued healthcare benefits upon any termination, nor are we contractually obligated to provide a gross-up to cover any excise taxes incurred by them under Section 4999 of the Code. Equity Incentive Plans In addition to the change in control and severance benefits described above, pursuant to the grant agreements under the Company’s 2013 Incentive Award Plan (the “AAG 2013 IAP”) and the US Airways Group, Inc. 2011 Incentive Award Plan

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2019 Proxy Statement |