American Airlines CEO Robert Isom received his highest compensation in 2023 since taking on the role in 2022, with a total of $31.4 million. This included a base salary of $1.3 million, a bonus of $2.75 million, and significant stock awards and non-equity incentive compensation. Isom’s pay in previous years was considerably lower, partly due to CARES Act restrictions on executive pay which expired in 2023. Despite his high compensation, Isom’s salary was still capped at $5 million, lower than his counterparts at Delta and United.
American Airlines, under Isom’s leadership, is focusing on expanding its presence in smaller cities, particularly in the Sun Belt region. The airline aims to attract high-growth, high-value customers by offering operational reliability and a more extensive schedule than ultra-low-cost carriers serving these areas. American is also looking to enhance its loyalty program, with around 65% of revenue coming from it in 2023. The airline plans to increase this to 80% in 2024 through the addition of more premium seating and retrofitting older aircraft to include more first-class seats.
Despite competitors like United and Delta targeting premium and international travel, American Airlines is carving out its own niche. By focusing on smaller cities ignored by other airlines, American sees an opportunity to capture an underserved market of air travelers. Chief commercial officer Vasu Raja highlighted the potential in areas like Tulsa, Oklahoma, and El Paso, Texas, where American believes it can attract customers with its reliable operations and expanded schedule. The airline’s strategy is centered around meeting the needs of customers in these regions.
The board’s executive compensation committee recognized Isom’s importance in American Airlines’ leadership succession plan and the critical need to retain him as CEO. By awarding him a higher compensation package in 2023, the committee acknowledged Isom’s role in shaping the airline’s strategy during a challenging period. Despite facing financial constraints due to the pandemic, American Airlines is banking on Isom’s leadership to drive growth and expansion in the coming years. With a focus on small cities and loyalty programs, the airline is positioning itself for success in a post-pandemic travel landscape.
In his role as CEO, Isom has been instrumental in leading American Airlines through the challenges of the pandemic and shaping its future strategy. His emphasis on expanding in small cities and growing the loyalty program reflects a unique approach within the airline industry. By focusing on areas with untapped potential and leveraging its loyalty program, American aims to differentiate itself from competitors and attract a loyal customer base. Isom’s leadership and vision for the airline’s future are key drivers behind the board’s decision to award him a higher compensation package in 2023, recognizing his contributions to the company’s success.
