UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE l4A
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
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| ATLAS AIR WORLDWIDE HOLDINGS, INC. | ||||
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 Shareholder Engagement
Shareholder Engagement
Proxy Season 2015
Proxy Season 2015 |
 Executive
Summary 2
Pay for
Performance
Alignment
Shareholder
Outreach and
Responsiveness
Business
Performance
Commitment to
Best Practices
Capital Allocation
Strategy
We made changes to our compensation program as a result of shareholder
engagement, including changes being implemented in 2014 after last year’s
vote In
late
2014
–
early
2015,
we
reached
out
to
nearly
75%
of
shares
outstanding
to
discuss governance and compensation matters
We delivered strong performance in 2014 with total shareholder return of 21.3%,
significantly exceeding peers; this strong performance has continued into
2015 We
executed
on
a
strategic
plan
that
positioned
us
to
capitalize
on
market
improvement and the strong operating leverage of our model
We
remain
committed
returning
value
to
shareholders;
in
2014,
we
maintained
a
strong cash position and repurchased 1.8% of outstanding shares (after
repurchasing 6.5% in the prior year)
More
than
65%
of
total
compensation
opportunity
is
performance-based,
including
majority of long-term compensation
Robust
process
for
setting
performance
metrics
to
align
with
our
short-
and
long-
term operating plans, budget and anticipated market conditions
Payouts
strongly
linked
to
company
performance:
2012
–
2014
long-term
(3
year)
performance awards vested at 25% (50% of target) while 2014 annual incentive
payout was 2x target, reflecting performance during respective
periods We maintain strong, well-balanced governance practices,
including a highly qualified board, independent board leadership, and best
practices that promote accountability and protect shareholder rights
|
 Following extensive shareholder outreach in 2013 and the first half of 2014, we
continued to maintain an active dialogue with our shareholders over the
last year In late 2014 –
early 2015, we reached out to holders of nearly 75% of our outstanding
shares
to
help
our
Board
better
understand
the
evolving
perspectives
of
our
shareholders regarding the Company’s governance and compensation
practices In response to these outreach efforts, we held in person or
telephonic meetings with holders of approximately 55% of our outstanding
shares We continue to engage extensively with our investors to solicit
their points of view and consider further improvement
Shareholder Outreach and Engagement
3
We value our shareholders’
input and continue to solicit feedback |
 Strong
Performance in 2014 4
The Company performed well in 2014, delivering strong stock price performance and
total shareholder return
We executed on our strategic initiatives to strengthen and diversify our business
mix, expand our customer base, generate cost savings through operating
efficiencies, and enhance our portfolio of assets and services
Our results reflected the strength of our ACMI and Charter businesses, growth in
Dry Leasing, progress in our efficiency and productivity initiatives, and an
increase in the average utilization of our operating fleet during the year
as we capitalized on improving market demand Operating Revenue
$1.8 billion
9% v. 2013
2014
Total
Shareholder
Return
Financial Results
Net Income
$106.8 million
EPS
$4.25
14% v. 2013
16% v. 2013
1
All calculations as of 12/31/2014. AAWW and Russell TSR calculations reflect
change in share price plus returns of capital, including dividends and share
repurchases; S&P SmallCap 600 reflects only change in index value 1
|
 Strong TSR
Performance for 2014 & 2015 AAWW and Russell 2000 Total Shareholder
Return (TSR) calculations reflect change in share price plus returns of capital, including
dividends and share repurchases.
S&P SmallCap 600 reflects only change in index value.
All calculations are as of May 15, 2015.
Last Year Through The Present
Last 12 Months
5 |
 ~70-75% of AAWW block hours
ACMI
Provide outsourced cargo and passenger
aircraft operating solutions, including aircraft,
crew, maintenance and insurance. Customers
assume fuel, demand and yield (rate) risk and
most other operational fees and costs
CMI (Crew, Maintenance and Insurance)
Provides outsourced cargo and passenger
aircraft operating solutions, including the
provision of crew, maintenance and insurance,
while customers provide the aircraft and
assume fuel, demand and yield risk and most
other operational fees and costs
We
are
a
leading
global
provider
of
outsourced
aircraft
and
aviation
services,
operating
the
world’s
largest
fleet
of
Boeing
747
freighters,
as
well
as
Boeing
747
and
767
passenger
aircraft
and Boeing 767 freighters
ACMI
(Aircraft, Crew, Maintenance, and Insurance)
A Diverse Service Provider of Global Airfreight
6
~25-30% of AAWW block
hours
Provides cargo and passenger
aircraft charter services to
customers including the U.S.
Military Air Mobility Command,
brokers, freight forwarders,
direct shippers, airlines, sports
teams and fans, and private
charter customers
Charter
Revenue not tied to block
hours
Provide cargo and
passenger aircraft and
engine leasing solutions
Significantly growing part of
our business
Dry
Leasing
Reportable Segments |
 Disciplined
Capital Allocation Strategy 7
2014 Actions
Share Repurchases
Paid
down
~$200
million
of
debt
Acquired
three 777Fs for Dry Leasing
Maintained
strong cash position
Repurchased
1.8%
of
outstanding
shares (after repurchasing 6.5% the prior
year)
Remaining
authority
for
up
to
$45
million
Repurchases
do
not
affect
EPS
or
other incentive metric calculations
We
are
committed
to
creating,
enhancing
and
returning
value
to
our
shareholders
through
the
disciplined execution of our capital allocation strategy
|
 Changes to
Compensation Program for 2014 and Beyond in Response to Shareholder
Feedback 8
In
response
to
shareholder
feedback
last
year,
our
Compensation
Committee
made
significant
changes
to
our
2014
compensation
program
to
further
link
pay
and
performance and enhance market alignment
CEO Compensation
Benchmarking
2014 CEO long-term incentive plan (LTI) award grants targeted at median of
benchmark peer group; all future CEO total direct compensation pay
decisions targeted at median of peers Annual Bonus
Performance Metrics
Further decreased individual performance element weight for CEO to 20% in 2014
(versus 30% in 2013) Annual CEO incentive objective weightings include: 60%
EPS, 20% customer service and 20% individual Peer Group
Revised the 2014 peer group to consist of 20 companies in industries similar to
ours, with median revenue size approximately equal to AAWW revenues
(including revenues of Polar) Multiple Peer Groups
Single new representative and relevant peer group to benchmark 2014 compensation
Incentive Plans
Performance Metrics
Long-term incentive plan metrics changed from relative to absolute measures
tied to our long-term business strategy and metrics important to
shareholders (ROIC and EBITDA). Clawback
Adopted incentive plan clawback policy
Change-in-Control
Provisions
Only
legacy
“single
trigger”
agreements
remain
outstanding.
Beginning
in
2014,
all
equity
and
other
long-term
incentive
awards
under
our
incentive
plan
include
“double
trigger”
change-in-control
provisions
As of 2015, less than one half of all outstanding long-term grants are subject
to single-trigger change-in-control arrangements; once the
outstanding awards vest or expire by their terms, there will be no remaining single-
trigger arrangements |
 Robust
Target-Setting Process 9
The Compensation Committee sets the annual performance targets for
performance-based executive compensation in the beginning of each
year At the time they are set, the Committee believes each target is
challenging to achieve under anticipated market conditions; tied directly
into annual budget and publicly disclosed outlook If targets are achieved, it
means the Company has successfully met the significant challenges
posed
by
business
conditions,
competition,
and
a
volatile
global
market
In setting each target, the Compensation Committee reviews and considers the
following factors through a bottoms-up process that starts with
department budgets and plans throughout the Company:
(1)
Short-
and long-term operating plans and budget
(2)
Publicly disclosed outlook and financial targets
(3)
Company and market performance history
(4)
Economic and air freight industry conditions
(5)
Anticipated difficulty of each target
1
Target
performance
is
set
in
line
with
the
Company’s
publicly
disclosed
outlook,
which
ensures
transparency
and
rewards
management
at
target
only
if
it
is
successful
in
achieving
financial
results that align with expectations communicated to the market
|
 Approach
to Setting Challenging 2014 Metrics 10
The rigor of our targets derives from their alignment with our financial plan
— which
takes
into
account
all
relevant
factors
that
may
influence
our
results
for
the
coming
year,
positively
or
negatively
—
and
not
how
they
compare
to
the
prior year
Our target setting process takes into account prior year results, short-term
volatility of our business and the market generally to ensure that our
employees are incentivized appropriately to achieve challenging goals
1
Aligning Targets
with Financial
Plan and Market
Conditions
Reasons for
Decline in 2014
Target v. 2013
Results
Transparency to
Shareholders
Regarding
Target Setting
We communicated clearly on the expected decline in earnings related to a
decline in military spending to shareholders and the broader market in
February 2014
Throughout
the
year,
we
were
able
to
redeploy
the
three
returned
aircraft
in
new long-term contracts
Specifically,
the
2014
target
was
set
early
in
the
year,
and
was
lower
than
the
2013 results due to several important factors, including:
(1)
Anticipated continued strong contraction in military spending on
outsourced airlift
(2)
Anticipated challenges to redeploying three aircraft that were returned
from a long-term contract with British Airways
(3)
Three consecutive years of essentially no growth in the global
airfreight market |
 Close Link
Between Pay and Performance 11
Our Compensation Program:
Aligns
annual
incentives
with
key
annual
financial
objectives
that
directly
tie
to
our
strategy
Aligns
long-term
incentive
awards
with
executive
retention
and
our
shareholders’
interests
Creates
a
pay
mix
portfolio
with
an
appropriate
balance
of
fixed
and
variable
pay,
as
well
as
performance-
based
pay
having
short-term
and
long-term
components
1
Represents maximum total compensation opportunity in 2014 that was
performance-based, including 43.2% in performance-based long-term incentive
opportunity and 24.1% in annual incentive opportunity.
2014 CEO Compensation Opportunity
2014 Payouts Reflect Performance Outcomes
Performance-Based Long-Term Incentive (for
3 year period 2012-2014)
Payout at 25% (50% of target),
reflecting a challenging operating
environment in 2012 and 2013
Annual Incentive (2014)
Payout at 2x target, reflecting our strong
2014 performance
1 |
 Effective
Compensation Policies and Procedures 12
Significant
“At
Risk”
Compensation:
>65%
of
maximum
total
CEO
and
total
other
NEOs
target
compensation
is
“at
risk”
“Clawback”
Policy:
Adoption
of
a
“clawback”
of
annual
incentive
compensation
to
discourage
imprudent
risk
taking
“Double
Trigger”
Vesting
Acceleration:
“Double
trigger”
in
long-term
equity
and
cash
performance
incentive
awards
No
Change
of
Control
Gross
Ups:
Change
of
control
payments
are
not
grossed
up
for
tax
purposes
Extended
Vesting
Requirements:
Time-based
equity
award
agreements
provide
for
a
four-year
vesting
schedule
Limited
Perquisites:
Strict
limits
on
perquisites
No
Adjustments
for
Shareholder
Buybacks:
Shareholder
buybacks
are
not
factored
in
EPS
calculation
for
AIP
purposes
No
Repricing:
Repricing
of
underwater
stock
options
not
allowed
Stock
Ownership
Requirements:
Minimum
stock
ownership
guidelines
and
recommended
holding
periods
for
stock
No
Hedging
or
Pledging
of
Shares:
Insiders
prohibited
from
hedging
and
pledging
activities
involving
Company
stock
Risk
Management:
Compensation
program
design
does
not
promote
excessive
risk
taking
Independent
Compensation
Consultant:
Retained
by
our
independent
Compensation
Committee
No
Grants
of
Stock
Options:
Equity
awards
with
either
performance-based
vesting
or
extended
time-vesting
requirements
162(m)
Compliant:
AIP
compensation
is
designed
to
qualify
as
performance-based
compensation
under
Section
162(m)
Performance
Assessment:
The
Compensation
Committee
annually
assesses
its
own
performance |
 Annually elected directors
Majority voting for uncontested Director elections; adopted
new voting standard, effective at our 2015 annual meeting
Separate CEO and Chairman positions, with a strong independent Chairman
role; appointed a new Chairman, Frederick McCorkle as of May
2014 All board committees are 100% independent;
appointed a new Chair of the Compensation
Committee, Carol Hallett All directors are independent (except our CEO)
No poison pill in place
Ongoing dialogue with shareholders
Continued Commitment to Corporate
Governance Best Practices
13
1
2
3
4
5
6
7 |
 Our
Board
includes
an
appropriate
balance
of
experience,
tenure,
diversity,
leadership,
skills and qualifications in areas of importance to our Company
Given the diversity of our operations, it is important to bring experience from all
areas key to understanding our business
Balance of Skills, Diversity and Experience
14
Strategic
Planning
Mergers and
Acquisitions
Capital Structure
Civil and
Governmental
Aviation
Legal, Regulatory
and
Government Affairs
Corporate
Governance
Global
Operations
Transportation
and Security
Finance and
Risk
Management
International
and
National Trade
Military
Affairs
Procurement
and
Distribution
Board of Directors’
Expertise |