2018 Guide to Effective Proxies

2.17.4 Compensation mix | 321 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES COMPENSATION DISCUSSION AND ANALYSIS Our CEO’s base salary has not been increased in the past five years, his bonus opportunity has not been increased since 2010 and his long-term incentive opportunity was decreased from a 4.75 multiple of salary to a 3.75 multiple of salary in 2014 to be better aligned with peer group levels. The following charts illustrate our CEO’s total compensation opportunity in 2017, as well as the 2017 long-term incentive opportunity for our CEO (assuming payout at maximum levels): Starting with 2018 CEO compensation design, the addition of a comparative TSR modifier and other changes to performance-based long-term incentive awards results in approximately 75% of compensation opportunity structured to be performance-based. 2017 Total CEO Compensation Opportunity 2017 CEO’s Long-Term Incentive Opportunity Performance- Based Compensation 66.5% Base Salary 11.5% Annual Incentive 23.0% Performance Long-Term Incentives 43.5% Long-Term Incentive RSUs 22.0% Performance Long-Term Incentives 66.5% RSUs 33.5% Aligned with Long-Term Success of the Company Pay Outcomes Reflect Company Performance Our compensation program is structured to be strongly aligned with the performance of the Company, with a significant portion of our NEOs’ compensation based upon various performance metrics tied to our annual and long-term incentive plans. The performance metrics are designed to drive the achievement of key business, financial, on-time customer, and operational annual and long-term results, in addition to individual contributions. The performance-based payouts for 2017 demonstrate the Compensation Committee has set rigorous goals that align with the Company’s strategy and reflect the performance outcomes over the past few years: • Annual Incentive (2017) : Payout at 1.76x of Target for our NEOs, reflecting our strong 2017 performance, which included the continued rollout of Amazon aircraft, customer and market growth, synergies realized through integration of Southern, and an increase in adjusted net income of approximately 18%. Please see page 39 for a further discussion of our 2017 annual incentive (“AIP”) payout. • Performance-Based Long-Term Incentive (for three-year period 2015-2017) : Payout reflecting transformative company growth and attainment of metrics due to 2016 Amazon transaction (see page 45). Best Practices and Risk Mitigation The Compensation Committee is required by its charter to meet at least four times annually. During 2017, the Compensation Committee held four in-person meetings and two telephonic meeting and acted once by written consent. In 2017, the Compensation Committee consisted of four outside Directors, Ms. Hallett (Chair), Mr. Wulff, Mr. Griffin and Mr. McCorkle, each of whom is an independent Director within the meaning of applicable SEC and NASDAQ rules. Atlas Air Worldwide Holdings, Inc. 2018 Notice & Proxy Statement | 35 Best Practices 2017 Achievements Pay for Performance In Action - ATLAS AIR WORLDWIDE HOLDINGS, INC.