United Airlines Holdings Inc

2024 Executive Compensation Overview

The following table provides information regarding the elements of our fiscal year 2024 executive compensation program.

Elements of 2024 Executive Compensation

Base Salary

The Committee generally reviews and approves base salaries annually in February, with the new rates effective as of April 1, and makes periodic adjustments in connection with promotions, changes in roles and/or responsibilities or to reward individual performance and promote market competitiveness. In making any such adjustments, the Committee considers individual performance, the NEO’s experience, the breadth, scope and complexity of the NEO’s role, internal pay parity and whether the NEO’s base salary is appropriately positioned relative to similarly situated executives in our peer group, among other factors.

Taking into account each NEO’s performance for the most recently completed fiscal year, total target compensation, any outstanding or recently paid special awards, recent compensation adjustments and the average compensation of similarly situated executives in our peer group, the Committee determined to increase each NEO’s base salary, as summarized in the table below. The determination to increase each NEO’s salary was driven by the desire to ensure each NEO’s total market compensation aligned with the compensation levels at our peers as well as to reward each NEO for his continued strong performance in his respective role and his contributions to the Company.

Short-Term Incentive Program

The 2024 STI was designed to align with our business strategy and mission by sharpening management’s focus on key financial, operational and customer service goals to promote achievement of our commitments to our customers and stockholders.

The 2024 STI was structured with a target opportunity granted to each NEO (based on a percentage of base salary), with an entry payout equal to 50% of the target opportunity, a target payout equal to 100% of the target opportunity and a stretch (also called “maximum”) payout equal to 200% of the target opportunity. The 2024 STI awards were earned on December 31, 2024 and were paid out in March 2025 after the Committee certified performance.

The graphic below illustrates the calculation used to determine 2024 STI payouts:

STI Target Opportunities

The target opportunities as a percentage of base salary for 2024 for our NEOs are shown below.

Such STI target opportunities are determined by the Committee after considering a number of factors, including the breadth, scope and complexity of the NEO’s role, whether the target annual incentive is competitive with target annual incentives for similarly situated executives in our peer group, consideration of internal pay parity and our recent and projected financial performance. For 2024, the Committee determined not to increase the STI opportunities for any of our NEOs as a percentage of base salary, although the absolute STI target opportunities for each NEO increased due to their base salary increases that took effect in 2024.

The STI target opportunity for each NEO is expressed as a percentage of the executive’s base salary.

Performance Metrics Underlying the STI Program

At the beginning of the performance year, the Committee undertakes a rigorous, holistic process to establish predefined metrics that it believes will motivate our executives appropriately to deliver the high performance that supports stockholder value creation in both the short- and long-term in accordance with our compensation philosophy. The 2024 STI had a performance period of January 1, 2024 through December 31, 2024.

Our 2024 STI metrics were as follows, with the metrics selected and the targets set by the Committee in February 2024.

2024 STI Outcomes

Threshold, target and maximum performance levels are evaluated independently by the Committee and are set to provide appropriate awards across a range of performance outcomes. In establishing performance levels and metrics each year, the Committee considers, among other things: budget; operational priorities; long-term strategic plans; historical performance and external factors, including external expectations; competitive developments; and the regulatory environment. The achievement of threshold, target and maximum performance levels were set by the Committee to be challenging to attain and require strong performance and execution without encouraging unnecessary or excessive risk-taking.

The payouts for the 2024 STI were based on an executive’s target bonus amount and the total payout percentage. Company performance results for the year led to a formulaic payout percentage of 175% of target for 2024. The calculation was based on the following performance against the goals shown below.

2024 STI Payments

The actual 2024 STI awards paid to our NEOs are shown in the table below and are also included in the 2024 Summary Compensation Table under the Non-Equity Incentive Plan Compensation column:

Long-Term Incentive Program

2024 Long-Term Incentive Program Summary

Our LTI program, like our STI program, is designed to focus the efforts of our executives on key drivers of both short- and long-term success and on stockholder value. A significant percentage of our NEOs’ compensation is in the form of equity with three-year vesting periods, which is designed to promote retention and closely tie the interests of our NEOs to the interests of our stockholders.

In determining the size of the individual LTI awards granted to our NEOs in 2024, the Committee considered annual financial forecasts, capital expenditure budgets and United’s annual business plan, along with input from the Committee’s independent compensation consultant, Exequity, on compensation trends, peer long-term incentive levels and compensation risk factors.

In 2024, we continued to grant two types of long-term award vehicles, which each served a different purpose:

Goals are established and measured annually so they can be appropriately aligned with evolving market conditions, strategic priorities and our financial forecasts; in 2024, the Committee approved Company-wide target values for each of the three categories of performance metrics applicable to LTI awards granted in 2024. Each tranche represents the performance metrics and goals established by the Committee with respect to 1/3 of the target opportunity under the Performance-Based RSUs. However, beginning with the 2024 Performance-Based RSUs, the Committee added a relative TSR modifier to the annual performance goals, which measures relative TSR performance over a cumulative three-year period, as discussed further below. Given that each year’s awards have an overlapping performance period from the prior year and, in the case of the 2024 Performance-Based RSUs, a three-year relative TSR modifier, we believe these awards provide the right balance between short-term and long-term focus.

Performance-Based RSUs awarded in 2024 as part of our regular LTI Program (not including the Retention LTI Awards) are referred to herein as “2024 Performance-Based RSUs,” the Performance-Based RSUs awarded in 2023 are referred to as “2023 Performance-Based RSUs” and the Performance-Based RSUs awarded in 2022 are referred to as “2022 Performance-Based RSUs.” The performance goals and metrics established in 2024 (excluding the relative TSR modifier) and described herein also apply to the first-half of Mr. Leskinen’s 2023 promotional PBRSU award for which half of the award vests based on performance goals established in 2024 and the remaining half of the award vests based on performance goals established in 2025.

The following table summarizes the equity awards awarded to our NEOs in 2024.

2024 Performance-Based RSUs

2024 Performance-Based RSU awards have a target opportunity of 100% of the target award value and a maximum or “stretch” opportunity equal to 300% of the target award value (taking into account the relative TSR modifier). Payment opportunities under PBRSU awards are subject to linear interpolation between performance levels.

The primary metrics and weights used for tranche 3 of the 2022 Performance-Based RSUs, tranche 2 of the 2023 Performance-Based RSUs and tranche 1 of the 2024 Performance Based RSUs, as well as the first half of Mr. Leskinen’s 2023 promotional PBRSU award, are identical to each other and are set forth in the table below. The liquidity hurdle applicable to the 2022 Performance-Based RSUs, the 2023 Performance-Based RSUs, the 2024 Performance Based RSUs and Mr. Leskinen’s 2023 promotional PBRSU award and the relative TSR modifier applicable to the 2024 Performance-Based RSUs only are described in further detail below.

Cash Liquidity Hurdle

In addition to the above performance metrics measured during calendar year 2024, payout of the Performance-Based RSUs are contingent on the achievement of a cash liquidity hurdle ($8 billion) as of the end of the three-year performance period.

TSR Modifier

In an effort to further align executive compensation with stockholder interests, the 2024 Performance-Based RSUs are subject to a relative TSR modifier, wherein a percentage is applied to the final payout such that the award can increase in value between +0% to +50%. The modifier is based on the Company’s TSR over the full three-year performance period compared to the market cap weighted average TSR for companies in the Dow Jones US Airlines Index as of January 1, 2024. The modifier will only increase the value of the payout if the Company’s TSR is positive during the performance period and exceeds the weighted average TSR of the peer group by at least two percentage points and will only apply if the entry level of performance is met on at least one of the primary PBRSU goals. Assuming maximum application of the relative TSR modifier, the stretch value of the 2024 Performance-Based RSUs is 300% of target. The companies in the Dow Jones US Airlines Index as of January 1, 2024 and used for purposes for the relative TSR modifier consist of: Delta Air Lines, Inc., American Airlines Group Inc., Alaska Air Group, Inc., Southwest Airlines Co., JetBlue Airways Corporation, Allegiant Travel Company and Spirit Airlines, Inc.

The Company’s TSR performance relative to the peer group TSR will affect the payout by increasing it between 0% to 50% as set forth in the following chart:

The relative TSR modifier aligns with stockholder interests in that it provides an upside opportunity when the Company’s TSR is better than the TSR of our peers, but only if the Company’s TSR is also positive during the performance period and the Company also meets at least the entry level of performance on at least one of the primary PBRSU goals.

2024 Time-Based RSUs

Time-Based RSUs make up the remaining 50% of our executives’ target long-term equity incentives. Each grant of RSUs vests one-third on each of February 28, 2025, February 28, 2026 and February 28, 2027.

2022 Performance-Based RSUs and 2023 Performance-Based RSUs

Details relating to the performance goals associated with the 2022 Performance-Based RSUs (tranche 1) and the 2023 Performance-Based RSUs (applies to tranche 1 of the 2023 Performance-Based RSUs and tranche 2 of the 2022 Performance-Based RSUs) are set forth on pages 102 through 105 of United’s 2024 proxy statement filed with the SEC on April 12, 2024.

Payout of 2022 Performance-Based RSUs (Completed Performance Period)

Under the terms of the 2022 Performance-Based RSUs, 2024 represented the final year of the three-year performance period. The 2022 Performance-Based RSUs vested based on performance goals established on an annual basis of the three-year performance period commencing January 1, 2022 and ending December 31, 2024. The 2022 Performance-Based RSUs were divided into three tranches that were each weighted as 1/3 of the target 2022 Performance-Based RSUs. The 2022 Performance-Based RSUs had a continued service condition, generally requiring the named executive officer’s continued employment through the end of 2024 to vest.

Below is a summary of the Company’s performance results under the performance metrics of the 2022 Performance-Based RSUs, which resulted in an overall vesting level of 122% of target. The performance metrics and goals were established annually based on the Company’s financial plan and operating and strategic initiatives, and were designed to be challenging but attainable with strong management performance, which was ultimately reflected by the overall vesting level of 122% of target. The awards vested at the end of 2024 and were settled in the first quarter of 2025 and are included in the “Option Exercises and Stock Vested for 2024” table.

Open Performance Periods

Performance under the 2023 Performance-Based RSUs (as well as Mr. Leskinen’s 2023 promotional PBRSU award) and 2024 Performance-Based RSUs will be determined following the end of the three-year performance periods ending December 31, 2025 and 2026, respectively, given that certain underlying performance metrics (including the liquidity condition and, for the 2024 Performance-Based RSUs, the relative TSR modifier) are still outstanding. The performance metrics and relative weights for the 2024 Performance-Based RSUs are set forth above on page 100 in the table under the heading “2024 Performance-Based RSUs.”

Retention LTI Awards

On July 25, 2024, the Committee approved the Retention LTI Awards to each of our NEOs, which were designed to motivate, retain and reward our executive team in a period of retention vulnerabilities within the industry and incentivize our executives to maintain and drive key financial metrics. The Retention LTI Awards are in the form of Performance-Based RSUs granted under the 2021 Plan and will be settled in shares of Common Stock upon vesting.

In approving the Retention LTI Awards, the Committee consulted with Exequity and considered target and realizable pay levels of executives at our airline peers. Based on such review, the Committee noted that our Chief Executive Officer’s realizable pay level was significantly below the levels of Chief Executive Officers at our peer companies and the Committee determined it was appropriate and in the best interest of the Company to provide an additional incentive performance award opportunity to our CEO, as well as each of other NEOs, to better align realizable pay with that of the airline peers for similar levels of performance, and to enhance retention through performance rewards linked to the Company’s key financial metrics. The Committee also determined to deliver the retention awards in the form of PBRSUs, rather than time-based RSUs, in order to continue to incentivize the NEOs to deliver on key performance metrics that are aligned with the interests of our stockholders.

The Retention LTI Awards provide an incentive opportunity of 0% to 133% of the target opportunity based on achievement of goals with respect to absolute Adjusted EPS and our Adjusted Pre-tax Margin relative to the weighted average Adjusted Pre-tax Margin of certain of our industry peers.

Any earned portion of the first, second and third tranches will vest on July 25, 2025, July 25, 2026, and July 25, 2027, respectively, subject to continued service or qualifying terminations of employment. The target opportunities for the Retention LTI Awards granted to the NEOs are as follows: Mr. Kirby - $10,000,000; Mr. Hart - $6,500,000; Mr. Enqvist - $3,500,000; Mr. Nocella - $3,000,000; and Mr. Leskinen - $2,500,000.

These awards were deemed critical to incentivizing and retaining our key executives and are not a representative component of the Company’s annual compensation program.

Use of Adjustments in Incentive Programs

Our goal is to pay incentives based on the same underlying business trends and results that our investors are using to measure United performance. To incentivize management to make decisions that have positive, long-term impacts, even at the expense of shorter-term results, and to prevent one-time gains and losses from having too great of an impact on incentive payouts, the Committee reviews whether to adjust results under the 2024 STI, tranches 1, 2 and 3 of the 2022 Performance-Based RSU awards, tranches 1 and 2 of the 2023 Performance-Based RSU awards, and tranche 1 of the 2024 Performance-Based RSU awards, although no such adjustment has been made as of the Record Date with respect to such awards.

RETENTION AND TRANSFORMATION AWARDS GRANTED TO NEOS IN PRIOR FISCAL YEARS THAT VESTED OR PAID OUT IN FISCAL YEAR 2024

Prior to fiscal year 2024, as previously disclosed for NEOs for the applicable year, the Committee approved special awards, which continued to vest in 2024. Please see the “Narrative to 2024 Summary Compensation Table and Grants of Plan-Based Awards for 2024 Table” below for a summary of such awards.