by: Govindarajan, Vijay; Lang, Julie B.
Source: Tuck School of Business, Dartmouth College
Southwest initiated the first profit-sharing plan in the U.S. airline industry in 1974 and offered profit sharing to its employees every year since then. Through this plan, employees owned about 10 percent of the company stock. In 2000, Southwest offered its employees a record-setting $138m in profit sharing. This tax-deferred compensation represented an additional 14.1 percent of each employee's annual salary.
Link: Southwest Airlines Corporation
Publication Date: 2002-01-01