AAL 2019 Proxy Statement

Determining the Median Employee The Company chose December 31, 2018 as the date for establishing the employee population used in identifying the median employee and 2018 as the measurement period. We captured all full time, part-time and temporary employees as of that date, including team members employed at our three wholly owned subsidiaries and all international team members, consisting of approximately 142,564 individuals. We identified the median team member using eligible earnings as defined by our profit sharing program which consists primarily of base wages and excludes items such as cash incentive pay, Company paid employee expenses or allowances, disability, severance, and benefit pay earned during the measurement period for each employee. We annualized earnings for permanent employees who joined in 2018, so these employees were assumed to have worked for the entire year. Using this methodology, we determined that our median employee was a full-time flight attendant in the United States. The annual total compensation of the median employee and the annual total compensation of the CEO were calculated in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K. Pay Ratio Comparisons The SEC’s rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices. As a result, the pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies have different employee populations and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios. As the world’s largest airline, some of our unique characteristics may make comparisons to the pay ratios at other airlines or companies difficult. We employ over 140,000 team members, more than any other U.S. airline; our route network is vast and unique; and we insource more of our flying and services than our U.S. peers. For example, American operates three wholly-owned regional airlines, and approximately 21% of our total workforce is employed by those airlines. Additionally, our pay ratio includes approximately 6,400 international team members, and approximately 20,000 part-time and temporary team members. We offer competitive compensation to our team members. In 2018, salaries, wages and benefits were our largest expense and represented approximately 33% of our total operating expenses. Of our 128,900 active full-time equivalent employees as of December 31, 2018, approximately 84% were represented by various labor unions responsible for negotiating the collective bargaining agreements (CBAs) covering them.

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2019 Proxy Statement |