Executive Compensation


The Coronavirus Aid, Relief and Employment Security Act places restrictions on employee compensation for businesses that obtain certain relief under the Act
  • Applies to businesses who receive loans or other financial support under the CARES Act
  • Only those employees making over $425,000/year
  • Additional compensation allowed for employees making over $3 million
  • Limitation period depends on which loan or support program used

Which businesses do executive compensation limitations apply:

Distressed businesses, the passenger airline industries and the air cargo industries who obtain

  • Loans under Section 4004 of the CARES Act
  • OR
  • Financial support under Section 4116 of the CARES Act

What are the limitations:

No officer or employee whose 2019 income exceeded $425,000 may receive

  • Total compensation, higher than received in 2019, in any consecutive 12 month during the applicable period
  • Severance pay or other benefits upon employment termination that exceeds more than twice their 2019 compensation
  • Officers or employees with 2019 total compensation in excess of $3 million can receive an increase up to $3 million plus 50% of the excess over 2019 total compensation

No limitations apply to anyone whose compensation is determined through a pre-existing collective bargaining agreement.


  • $425,000 compensation means no increase allowed
  • compensation over $3 million – suppose compensation of $6 million then an increase up to $4.5 million is allowed ($3 million plus 50% of $3 million).

What is the limitation period:

The limitation period varies depending on what relief is obtained:

  • loans obtained by air carriers and other distressed businesses limit compensation from the making of the loan until one (1) year after loan is no longer outstanding
  • financial support received for air worker support limits compensation for two (2) years from March 24, 2020 till March 24, 2020

What is included in total compensation

Total compensation is salary, bonuses, stock awards and other financial benefits

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