Russell Childs
SKYWESTAbout Russell Childs
Russell A. Childs, 57, is CEO and President of SkyWest, Inc. (since Jan 1, 2016 as CEO; President since 2014). He holds a BS in Economics and a MAcc from Brigham Young University and is a former CPA. During 2024, SkyWest reduced net debt, executed partner growth/extension agreements, improved captain staffing/utilization, generated strong operating cash flow, and shares rose 92% in 2024 (146% in 2023) . Pay-versus-performance disclosure shows CEO “compensation actually paid” of $35.9M in 2024 alongside Company TSR value of $155.47 (from a 2019 $100 base), Net Income of $322,962, and Adjusted EBITDA of $833,629 for 2024 .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| SkyWest, Inc. | Chief Executive Officer | 2016–present | Leads holding company operating entities and all commercial activities . |
| SkyWest, Inc. | President | 2014–present | Oversees corporate operations and strategy . |
| SkyWest Airlines, Inc. | President & Chief Operating Officer | 2007–2014 | Led airline operations during growth/operational scaling . |
| SkyWest, Inc. | VP – Controller | 2001 | Financial leadership after joining the company . |
| Public accounting firm | Certified Public Accountant | Prior to 2001 | External audit and accounting background . |
External Roles
| Organization | Role | Notes |
|---|---|---|
| Federal Reserve Bank of San Francisco | Chair | Current service . |
| Intermountain Health Desert Region Board | Vice Chair | Current service . |
| Regional Airline Association | Chair | Current service . |
| FAA NextGen Advisory Committee | Chair | Current service . |
Fixed Compensation
| Metric (USD) | 2022 | 2023 | 2024 |
|---|---|---|---|
| Base Salary | $500,000 | $546,875 | $595,000 |
| All Other Compensation | $153,971 | $467,213 | $415,612 (incl. $354,581 employer deferred comp credit) |
| Total (Summary Compensation Table) | $3,293,971 | $5,547,463 | $7,216,977 |
Notes:
- 2024 base was increased versus 2023; SCT totals reflect at-risk payouts and equity grant-date values .
- 2024 “All Other Compensation” includes $354,581 employer credits under the SkyWest Deferred Compensation Plan; other items include employer-paid health insurance, personal vehicle lease, and limited personal use of company recreational equipment .
Performance Compensation
Annual Performance-Based Cash Incentive (2024)
| Item | Value |
|---|---|
| Target Bonus (% of Salary) | 110.0% |
| Target Bonus ($) | $654,500 |
| Actual Payout (% of Target) | 197.0% |
| Actual Payout ($) | $1,289,365 |
Long-Term Incentive Awards (structure and 2024 grants)
- Policy: Annual LTI grants, generally cliff vest after 3 years to drive retention and alignment; 2024 mix = 70% performance shares (PSUs), 30% time-based RSUs .
- 2024 CEO target LTI grant value: $3,167,000 .
2024 Grants Detail (CEO)
| Award | Grant Date | Units/Target | Grant Date Fair Value | Vesting |
|---|---|---|---|---|
| RSUs | Feb 4, 2024 | 15,953 | $950,000 | Cliff on Feb 6, 2027 |
| PSUs (2024–2026 cycle) | Feb 4, 2024 | 37,224 target (50%–200% earnout) | $2,217,000 | Earn based on annual metrics; vest Dec 31, 2026, subject to continued employment |
2024–2026 PSU Metrics and Early Achievement
- 2024–2026 PSUs are measured annually over 2024, 2025, 2026; weights: Free Cash Flow 40%, Adjusted EBITDA 30%, Controllable Completion 20%, Controllable On-Time Departures 10%; threshold 50%, target 100%, max 200% .
- In Feb 2025, Committee determined 200% performance for the 2024 tranche; awards remain subject to service through 12/31/2026 .
Prior-Cycle PSU Outcome (2012/2022 grant cycle concluding 2024)
| PSU Cycle | Weighting/Design | 2024 Results | Payout |
|---|---|---|---|
| 2022 PSUs (covering 2022–2024) | 34% Adj. EBITDA, 33% Controllable Completion, 33% Controllable OT Departures each year | 2024: Adj. EBITDA $834 (vs $615 max), Completion 99.9%, OT Departures 88.8% (all above max) | 250% of target; CEO vested in 175,521 shares in Feb 2025 |
Equity Vesting Activity (2024)
| Metric | CEO |
|---|---|
| Shares Acquired on Vesting (2024) | 76,889 |
| Value Realized on Vesting (2024) | $4,561,055 |
Equity Ownership & Alignment
- Beneficial Ownership (Mar 6, 2025): 224,930 shares; less than 1% of 40,621,774 shares outstanding .
- Unvested/Outstanding Equity (as of Dec 31, 2024; $100.13 stock price used for values):
- 2022 PSUs earned (subject to certification/service): 175,521; value $17,574,918 .
- 2024 PSU cycle positions (various tranches noted in table); selected entries for CEO include 205,540 and 41,108 categorized per table columns; market values shown at $20,580,720 and $4,116,144 respectively (see table footnotes for categorization) .
- 2024 RSUs: 15,953; value $1,597,374 .
- No stock options outstanding for NEOs at 12/31/24 .
Ownership/Trading Policies and Guidelines
- Executive stock ownership guideline: CEO = 5x salary; all NEOs met guidelines as of 12/31/24 .
- Hedging and pledging prohibited for officers/directors .
- Directors must hold at least 5x cash retainer in stock; most met as of 12/31/24 (new appointee exception) .
Insider Selling Pressure Considerations
- Near-term supply drivers are primarily from vesting/settlement, not options (none outstanding). 2022 PSUs vested at 250% in Feb 2025 for 175,521 shares for CEO; 2024 PSU and RSU grants vest in 2026–2027, creating future scheduled settlements that could prompt tax-related sales but are subject to ongoing service and performance conditions .
Employment Terms
Severance/Change-in-Control (CIC)
- Company states NEOs have no other severance benefits, severance agreements, or CIC agreements; no single-trigger accelerated vesting upon a change in control; equity and 2023 cash awards can accelerate under certain circumstances (generally double-trigger) .
- Illustrative intrinsic values of unvested awards if triggering events had occurred on Dec 31, 2024 (closing price $100.13):
Component Change in Control Involuntary Termination Following CIC or Death Involuntary Termination Prior to CIC RSU Acceleration $0 $1,597,374 $1,597,374 PSU Acceleration $17,574,918 $47,241,434 $40,640,464 2023 Cash Performance Award Acceleration $0 $1,750,000 $1,250,000
Clawback/Forfeiture
- Compensation recovery policy adopted in 2023 per SEC/Nasdaq; 2019 Plan awards subject to recovery in event of restatement .
Deferred Compensation and Retirement
- SkyWest Deferred Compensation Plan: Employer discretionary contribution of 15% of salary, annual cash incentive, and short-term performance cash incentive; fully vested; payable on retirement/separation per elections .
- 2024 CEO entries: Company contributions $354,581; aggregate balance $3,970,980 .
Perquisites and Tax
- Perquisites include employer-paid health/dental/vision, personal vehicle lease, limited personal use of recreational equipment; travel benefits are broad-based across employees .
- No tax gross-ups provided to NEOs .
Board Governance
- Board Role: Childs is a director since 2016; not on any board committees .
- Leadership/Independence: Independent Chairman (James L. Welch); all key committees (Audit, Compensation, Nominating & Corporate Governance, Safety & Compliance) composed entirely of independent directors; independent directors meet in executive session regularly (generally quarterly) .
- Director Compensation: Non-employee directors receive cash retainers and equity; Childs received no compensation for board service as an employee-director .
- Board operations: Four regular meetings per year; director stock ownership guideline = 5x cash retainer .
Performance & Track Record
Selected 2024 Operating/Financial Highlights
- Reduced total debt by $337.7M to $2.7B; net debt down to $1.9B .
- Repurchased 0.6M shares for $43.3M (combined 2023–2024 repurchases = 22.1% of 12/31/22 shares) .
- Signed capacity agreements (United: 40 CRJ550; American extension for 74 CRJ700s); took 25 E175 deliveries in 2024 .
- Improved captain staffing; block hours +13.3% vs 2023 .
- Cash from operations $692.5M; cash and marketable securities $801.6M at year-end .
- Stock price rose 92% in 2024; 146% in 2023 .
Pay Versus Performance (context)
- 2024: CEO SCT Total $7,216,977; CEO Compensation Actually Paid $35,902,700; TSR value $155.47; Peer TSR $171.24; Net Income $322,962; Adjusted EBITDA $833,629 .
Compensation Structure Analysis
- Mix and leverage: 2024 cash payout at 197% of target reflects strong performance against annual goals; LTI skewed to PSUs (70%) with multi-year metrics including FCF and Adjusted EBITDA, increasing alignment to profitability and cash generation .
- Options vs. full-value equity: No option grants in 2024; no options outstanding at year-end—indicative of a shift to RSUs/PSUs with clearer performance/retention alignment .
- One-time cash programs: 2023 short- and long-term cash performance awards paid into 2023–2024 (CEO: $1,000,000 in 2023 STCPA; $500,000 remaining in 2024; $1,250,000 LTCPA paid in 2024), adding incremental realized cash incentives .
- Shareholder perspective: Say‑on‑pay support exceeded 98% in 2024; committee continues to calibrate targets and design vs. peers .
Equity Ownership & Alignment (Detail Table)
| Item (as of 12/31/24 unless noted) | Shares/Amount | Dollar Value |
|---|---|---|
| Beneficial ownership (as of 3/6/25) | 224,930 shares | n/a (less than 1% of 40,621,774) |
| 2022 PSUs (earned) | 175,521 shares | $17,574,918 (at $100.13) |
| 2024 PSU cycle entries (see table categories) | 205,540; 41,108 | $20,580,720; $4,116,144 (at $100.13) |
| 2024 RSUs (unvested) | 15,953 | $1,597,374 (at $100.13) |
| Options outstanding | 0 | n/a |
Compensation Peer Group (Benchmarking)
- The committee benchmarks against other airlines and similar transportation/logistics companies; target annual cash opportunities remain below median; CEO base salary was below the 25th percentile for peers for 2024 .
- Pay-versus-peer TSR context is shown using the Nasdaq Transportation Index for TSR comparison .
Say‑on‑Pay & Shareholder Feedback
- 2024 say‑on‑pay approval exceeded 98% of votes cast; the committee considered this strong support and continues to refine alignment to financial and stock performance .
Board Service Details and Dual-Role Implications
- Board tenure: Director since 2016; no committee memberships .
- Dual role: CEO and director, but not Chair; independent Chair and fully independent committees, with regular independent executive sessions, mitigate concentration of power and independence concerns .
- Director compensation: Employee-director (Childs) receives no board compensation .
Investment Implications
- Pay-for-performance alignment: High annual bonus payout and 250%/200% PSU achievement underscore strong operational/financial execution; heavier use of PSUs (including FCF and EBITDA) ties realized comp to shareholder value creation and cash generation .
- Supply/overhang: Absence of options limits exercise-driven supply; large PSU vesting events (e.g., 2022 cycle vested Feb 2025) and future RSU/PSU cliffs (2026–2027) can create episodic selling for taxes/liquidity but are governed by ownership guidelines and anti‑hedging/pledging policies .
- Governance/retention risk: No severance/CIC agreements reduce guaranteed exit costs; double‑trigger acceleration and strong clawback/ownership policies, plus high say‑on‑pay support, point to shareholder‑friendly design and moderate retention risk supported by multi‑year vesting .
- Execution track record: Debt reduction, partner growth, staffing normalization, robust cash generation, and share repurchases under Childs’ leadership support continued earnings power; 2024–2026 PSU metrics keep management focused on FCF and operational reliability .
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