Spirit Airlines’ equity in November 2024 was worth less than the amount it paid to its executives in 2023.
Tough financial situation
Spirit Airlines
, one of the largest ultra-low-cost carriers (ULCC) in the United States, was worth less than $13 million in November. According to a filing with the SEC, the airline’s equity at the end of November 2024 was $12,597,019. As first reported by QZ, Spirit paid its executives more than $18 million in 2023.
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According to the airline’s proxy statement before its June investor meeting, Spirit’s CEO alone made more than $6 million in 2023. Ted Christie, Spirit’s president and CEO, earned a base salary of $745,833 in 2023. However, Christie also earned a bonus, stock awards, non-equity incentive plan compensation, and more.
Christie’s bonus alone was more than double his yearly salary, $1.77 million. In stock awards, Christie earned $2.9 million. Christie’s compensation was just over $6.6 million with everything put together. The year before, Christie earned about $3.3 million.
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Scott Haralson, executive vice president and chief financial officer, earned more than $3.5 million in 2023. His base salary was $422,917, and he earned a bonus of $1,410,000. His stock earnings were almost $1.1 million. John Bendoraitis, executive vice president and chief operating officer, earned just under $3.1 million. Bendoraitis’ base salary was $458,333, and he received a bonus of $940,500.
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The last two executives both earned more than two million. Matthew Klein, executive vice president and chief commercial officer, had a base salary of $422,917 and earned a bonus of $855,000. Altogether, Klein earned $2,883,219 in 2023.
Rocky Wigging, senior vice president and chief information officer, earned $2,206,849. His base salary was just over $393,000, and he earned a bonus of more than $715,000.
The reason the executives received such large bonuses in 2023 is because,
“Amounts shown in the “Bonus” column represent the sum of (i) the one-time partial retention award paid to each of our NEOs in connection with the termination of the Frontier Merger Agreement in April 2023, which amount is equal to 50% of the NEO’s original retention award, and (2) the one-time partial retention award paid to each of our NEOs in connection the now-terminated JetBlue Merger in July 2023 in light of the protracted regulatory approval process, which amount is equal to 25% of each NEO’s original retention award.”
Spirit also planned to pay large bonuses to its executives in 2024. Simple Flying reported that Spirit was paying $5.3 million to five executives. In early December, a shareholder sent a letter to Judge Sean Lane, who is presiding over Spirit’s bankruptcy case.
The shareholder was concerned about some events surrounding the bankruptcy process. One of their concerns was the amount that Spirit planned to pay out in 2024.
“This gross enrichment of the very people responsible for Spirit’s financial collapse has come directly at the expense of shareholders who trusted the company with their life savings.”
Recent Spirit news
A few months ago, Spirit Airlines filed for Chapter 11 bankruptcy protection. One action step to improve its situation was selling 23 Airbus A320ceo and A321neo aircraft. In mid-December, the US Bankruptcy Court for the Southern District of New York approved the sale of the planes.
“The agreement, part of Spirit’s broader fleet optimization and liquidity strategy, involves the sale of 15 Airbus A320 and 8 Airbus A321 aircraft to GA Telesis. The closing of this sale is expected to occur over a specified period, allowing Spirit to accelerate its restructuring efforts while continuing to streamline its operations.”
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At least 19 Spirit Airlines aircraft that are being sold to GA Telesis have been stored in Phoenix, Arizona.
When the transaction was announced in October, it was worth $519 million and would improve Spirit’s liquidity by $225 million. A few days before the deal was approved, Spirit shared its plan to emerge from bankruptcy and restructure its debt. The airline will restructure $1.6 billion of its outstanding funded debt and reduce its total debt by almost $800 million.
