2018 Guide to Effective Proxies

2.17.5 Elements of pay tables | 351 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES COMPENSATION DISCUSSION AND ANALYSIS 2017 Achievements Pay for Performance In Action - Best Practices Primary Components of NEO Compensation The below table summarizes the three primary components of our NEOs’ compensation: Elements of Pay Form Links to Performance Purposes Base Salary Cash Fixed annual compensation ▪ Attract and retain executive talent ▪ Compensate executives for their responsibility, experience, sustained high performance and contributions to Company success Annual Incentives Cash Adjusted Net Income (previously EPS) ▪ Drives key business, operating and individual results on an annual basis (Adjusted Net Income) ▪ Derived from our annual operating plan (Adjusted Net Income) ▪ Strictly performance-based against measureable metrics; no payout guaranteed (all metrics) On-time customer reliability metrics Individual performance objectives Long-Term Incentives Performance Share Units (PSU) and Performance Cash Growth in Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA growth”) ▪ Links NEO and long-term shareholder interests ▪ Serves as a key retention tool and a strong long-term performance driver ▪ Performance-based against measureable metrics; no payout guaranteed (all metrics) ▪ Close alignment to shareholder returns via a relative metric (TSR) ▪ Specific responsiveness to shareholder feedback and recent Say-on-Pay outcomes Return on Invested Capital (“ROIC”) Relative Total Shareholder Return (“TSR”) ( for awards granted in 2018 and after ) RSUs Alignment with shareholder returns ▪ Multiyear long-term retention ▪ Value tied to share price Significant Portion of CEO Compensation Opportunity Performance-Based and/or At-Risk We design our CEO’s compensation opportunity to be largely performance-based and at-risk. 66.5% of the maximum total CEO compensation opportunity in 2017 was designed to be based on attainment of performance metrics, including approximately 43.5% in the form of long-term multiyear opportunities and 23.0% in annual incentive opportunity. An additional 22.0% of compensation opportunity was granted in the form of RSUs with four- year vesting, resulting in 88.5% of CEO compensation opportunity being at-risk. 34 | Atlas Air Worldwide Holdings, Inc. 2018 Notice & Proxy Statement ATLAS AIR WORLDWIDE HOLDINGS, INC.