Jeff Smisek is running a bigger airline, and now he's getting a bigger paycheck.
The president and CEO of United Continental Holdings Inc. collected compensation worth $4.4 million last year, according to an Associated Press calculation from a proxy statement the newly merged airline filed on Friday.
When 2010 began, Smisek, 56, had just taken over as CEO of Continental Airlines. He helped negotiate a merger with United. After the deal closed Oct. 1, he took over as CEO of the combined company, which will be the world's largest airline and fly under the United name.
The compensation figure for last year includes his salary for his time at both airlines plus a cash incentive of $3.6 million and $9,766 in extras. His total compensation was $3.6 million in 2009, when he was president and chief operating officer of Continental.
As head of Continental, Smisek had said he would not take a salary or bonuses until it earned a full-year profit. It did _ $854 million, counting the results for both companies. Because of that, United Continental said in the filing, it paid Smisek's salary retroactively at the end of 2010, partly at the Continental rate and partly at a higher rate after the merger.
Smisek's base salary was $730,000 as head of Continental. The combined company's board raised his salary to $975,000 after the merger "in consideration of his enhanced responsibility and leadership," the filing said.
He also received $6,735 for a 401(k) contribution and $3,031 in tax reimbursement.
For others, leaving United paid well.
Glenn Tilton, United's CEO until the merger closed and now the combined company's chairman, received compensation valued at $16.8 million in 2010. The bulk of that was almost $10.5 million in restricted stock that he gets in installments as long as he remains chairman through the end of 2012. He also got a $2.7 million bonus.
The company said some of the stock grants compensate Tilton for waiving a severance payment to which he would have been entitled after the merger.
Severance payments caused a big jump in pay for three other executives.
Former United president John Tague's 2010 compensation was valued at $11.7 million, up from $1.8 million in 2009. Former Chief Financial Officer Kathryn Mikells saw her compensation rise to $9.4 million from $1.3 million in 2009. And Graham Atkinson, former president of United's Mileage Plus frequent flier program, collected $6.9 million in compensation, up from $874,948.
The AP's formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation (which United Continental doesn't pay) and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.
The Chicago-based company said it would hold its annual meeting on June 8 at one of its facilities in Elk Grove Village, Ill.