Bob Jordan
SOUTHWEST AIRLINESAbout Bob Jordan
Robert E. “Bob” Jordan, age 64, is President, Chief Executive Officer, and Vice Chairman of Southwest Airlines (LUV). He became CEO on February 1, 2022 and has served in 15 roles since joining Southwest in 1988, spanning strategy, technology, commercial, and corporate services leadership . 2024 company performance highlights during his tenure include record operating revenues of $27.5B, company TSR of +20% for 2024, and ROIC (after-tax) less Excess Cash of 3.0% . The short‑term incentive (STI) scorecard paid at 97.9% of target, with operations ranking second in the Wall Street Journal’s 2024 airline ranking and EBITDA below threshold offset by a peer floor qualifier .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Southwest Airlines | President & CEO; Vice Chairman | 2022–present (CEO); 2023–present (President) | Leads largest transformation in company history; initiatives include assigned/premium seating, revenue modernization, and operational reliability programs . |
| Southwest Airlines | EVP Corporate Services | 2017–2022 | Oversaw technology, enterprise management, corporate strategy, and innovation . |
| Southwest Airlines | EVP & Chief Commercial Officer | 2011–2017 | Built first commercial org (marketing, network planning, revenue mgmt); refreshed Rapid Rewards; led AirTran acquisition/integration . |
| Southwest Airlines | EVP Strategy & Planning | 2008–2011 | Enterprise strategic planning . |
| Southwest Airlines | EVP Strategy & Technology | 2006–2008 | Aligned technology with strategy; e‑commerce and reservations upgrades . |
| Southwest Airlines | Multiple finance/tech roles (incl. Controller) | 1988–2006 | Foundations in finance and IT; joined as programmer . |
| Hewlett-Packard | Programmer/Financial Analyst | Pre‑1988 | Early career in tech/finance . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| The Container Store Group, Inc. | Director; Chairperson | 2013–2023 (Chair 2021–2023) | Audit Chair experience; governance and financial oversight . |
| Airlines for America | Board of Directors | Current | Industry advocacy . |
| Airlink, Inc. | Governors Council | Current | Humanitarian aviation network . |
Fixed Compensation
| Component | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary (SCT reported) | $676,875 | $700,000 | $798,958 |
| Base Salary – annual rate effective Mar 1 | — | $700,000 | $825,000 |
| Perquisites and Other (key items shown below) | $51,525 | $405,791 | $642,273 |
Breakdown of 2024 “All Other Compensation” for Bob Jordan:
- Company 401(k) match: $30,499; Profit sharing: $4,001; 401(a)(17) excess payout: $14,595; Restricted cash vesting (from prior awards): $578,000; Perquisites (free travel, 250k Rapid Rewards points, exec physicals, digital risk protection): $15,178 .
Performance Compensation
Annual Incentive (STI)
| Item | 2023 | 2024 |
|---|---|---|
| Target STI as % of base | 200% | 200% |
| Enterprise Scorecard payout | 57.5% of target | 97.9% of target |
| STI Paid (SCT Non‑Equity Incentive, excluding LTI cash payouts) | $4,096,504 | $1,615,350 |
2024 Management Incentive Scorecard (companywide):
| Category/Metric | Weight | Target | 2024 Result | Payout vs Target |
|---|---|---|---|---|
| Financial: EBITDA (ex‑items) | 50% | $3.71B | $2.14B | 50.0% (floor via relative margin qualifier) |
| Customer/Operational composite (WSJ ranking across 7 metrics) | 25% | 3rd place | 2nd place | 191.7% |
| Major initiatives – Efficiency/Productivity | 10% | Subjective | Below target | 75% |
| Major initiatives – Network resiliency/optimization | 10% | Subjective | At target | 100% |
| ESG/Belonging – training completion | 2.5% | 97% | 100% | 200% |
| ESG – fuel efficiency YoY | 1.5% | +1.7% | +1.7% | 100% |
| ESG – reduce single‑use plastics | 1.0% | Subjective | At target | 100% |
| Total | 100% | — | — | 97.9% |
Notes: A relative net income margin qualifier set a 50% floor for the financial metric since Southwest maintained its 2023 peer ranking in 2024 .
Long-Term Incentives (LTI)
2024 equity grants (50% time-based RSUs; 50% performance-based RSUs):
| Grant | Grant Date | Shares/Units | Grant Date Fair Value |
|---|---|---|---|
| Performance RSUs (target) | 1/31/2024 | 117,306 | $3,506,276 |
| Time-vesting RSUs | 1/31/2024 | 117,306 | $3,506,276 |
| Total 2024 equity (value) | — | — | $7,012,553 |
Performance RSUs – three‑year performance period (2024–2026), vest 2/21/2027:
| Performance Metric | Vesting Curve | Peer Qualifier |
|---|---|---|
| ROIC (after‑tax) less Excess Cash | 8% → 10% payout; 10% → 100%; 12% → 150%; ≥15% → 200% of target | If ROIC>0 and relative ROIC > median, minimum 50% vests; if best in peer group, minimum 100% vests (rank‑based interpolation) |
Time-based RSUs – vesting schedule for Bob Jordan:
| Vest Date | Shares |
|---|---|
| Feb 21, 2025 | 91,752 |
| Feb 21, 2026 | 58,304 |
| Feb 21, 2027 | 39,102 |
Outstanding equity at FY2024 year‑end (12/31/2024):
| Type | Unvested/Unearned Units | Market Value ($) |
|---|---|---|
| Time-based RSUs | 189,158 | $6,359,492 |
| Performance RSUs (threshold) | 17,490 | $588,014 |
Other long‑term cash (legacy awards):
- Performance-based cash granted in 2022 (performance 2022–2024) paid at 50% of target in Feb 2025; Bob received $493,250 .
Equity Ownership & Alignment
| Ownership/Policy | Detail |
|---|---|
| Beneficial ownership (as of 2/28/2025) | 334,442 shares; includes 111,370 shares in Retirement Savings Plan . |
| Shares outstanding (record date 3/18/2025) | 573,913,663 . |
| Ownership as % of shares outstanding | ~0.06% (computed from above) . |
| Stock ownership guidelines | CEO must hold ≥6x base salary (increased from 5x on 3/14/2025); includes unvested RSUs; all executives and directors meet requirements . |
| Hedging/pledging | Hedging and pledging of Company stock prohibited; officers and directors also prohibited from holding in margin accounts . |
| Vested vs unvested | At 12/31/2024: unvested time‑based RSUs 189,158; unearned performance RSUs (threshold) 17,490 . |
Insider selling pressure assessment: Form 4 data not found in retrieved documents; however, recurring annual RSU vests each February (see schedule above) can create potential liquidity events. Hedging/pledging is prohibited, and share ownership guidelines encourage retention .
Employment Terms
| Provision | Key Terms |
|---|---|
| Employment agreement | No specific employment contract disclosed for Bob Jordan; named executives generally not party to employment agreements (other than legacy arrangements for prior Executive Chairman) . |
| Change‑in‑control (CIC) | Double‑trigger; maximum incremental benefit approximately equal to (i) one year of salary and (ii) two years of bonus; additional details in “Potential Payments” . |
| Equity on death/disability/retirement | Death/disability: unvested time‑based RSUs and restricted cash fully vest; performance RSUs remain outstanding to be settled if earned. Qualified retirement (age+service≥65, ≥10 years service): time‑based RSUs continue vesting; performance awards prorated and settle per results . |
| Severance cap policy | Company will not enter agreements >2.99× (base + target bonus) without shareholder approval . |
| Clawback | Restatement‑based clawback compliant with SEC/NYSE adopted Nov 2023; recoups erroneous incentive compensation received after 10/2/2023 . |
Potential payments (illustrative, assuming triggering event 12/31/2024):
| Scenario | Estimated Amount |
|---|---|
| Termination after CIC (good reason or not for cause) | $2,608,600 |
| Death or Disability | $6,511,939 |
| Qualified Retirement | $2,568,111 |
Board Governance (director service, independence, committees)
- Board role: Director since 2022; Vice Chairman; member of the Finance Committee .
- Independence: As CEO/Vice Chair, Bob is a management director; Board leadership separated with appointment of independent Chair (Rakesh Gangwal) effective Nov 1, 2024, addressing dual‑role independence concerns .
- Board attendance: In 2024, all current directors attended ≥75% of Board and applicable committee meetings .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay support: 77.7% (below historical average ~94% for 2020–2023). The Committee engaged with shareholders and retained a new independent advisor in Jan 2025 (Meridian) to refresh perspectives; overall program structure remained largely intact for 2024 .
Compensation Peer Group & Benchmarking
- Market references: Willis Towers Watson General Industry Executive Compensation Database (33 comparable companies and broader sample) and airline data (American, Delta, United; Alaska, JetBlue) to inform, not determine, pay; emphasis on pay opportunities within a reasonable range of median and retention .
- Independent consultants: Pay Governance LLC (2024); Meridian Compensation Partners, LLC engaged January 2025 .
Performance & Track Record (recent)
| Metric | 2023 | 2024 |
|---|---|---|
| Operating Revenues | $26.1B (CEO letter) | $27.5B (record) |
| Company TSR (annual) | −12.7% | +20.0% |
| ROIC (after-tax) less Excess Cash | 5.7% | 3.0% |
| WSJ operational ranking | — | 2nd (key driver in STI) |
Strategic execution notes: Management initiated major revenue/product moves (e.g., assigned and premium seating, basic economy product, expanded OTA distribution), operational modernization (AI-enabled support, new flight planning), and network initiatives (red‑eyes), with the Board and CEO communicating accelerated ROIC timing (target now 2026) and planned share repurchases .
Investment Implications
- Pay‑for‑performance alignment: CEO pay mix is heavily equity‑based (2024 LTI = 850% of base; 50% PSUs tied to multi‑year ROIC less Excess Cash) which increases leverage to long‑term value creation and ROIC improvement .
- Near‑term selling pressure: Annual February RSU vests (notably 91,752 shares vested in Feb 2025 for Jordan) could create periodic liquidity events; prohibitions on hedging/pledging and ownership guidelines mitigate misalignment risks .
- Retention and CIC risk: Double‑trigger CIC with moderate economics (~1× salary + ~2× bonus) and a 2.99× severance cap indicate balanced shareholder protections; no single‑trigger acceleration for CIC under the equity plan .
- Governance posture: Separation of CEO and independent Chair implemented in 2024; active shareholder engagement following lower 2024 say‑on‑pay support and committee/consultant refresh signal responsiveness .
- Execution risk vs. transformation upside: 2024 EBITDA underperformed internal target, but operational metrics and revenue modernization advanced; 2024 TSR +20% and record revenues reflect early traction while multi‑year PSU targets concentrate incentives on sustainably higher ROIC by 2026 .
Monitoring to‑dos: Track Form 4 filings around February vesting windows, ROIC trajectory vs. PSU hurdles, say‑on‑pay outcomes in 2025, and progress on monetization initiatives (assigned/premium seating, OTA distribution) communicated by management .