DEF 14A 1 a2243198zdef14a.htm DEF 14A

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

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ATLAS AIR WORLDWIDE HOLDINGS, INC.

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LOGO

LETTER TO OUR SHAREHOLDERS FROM THE BOARD OF DIRECTORS

Dear Shareholders,

We are pleased to invite you to attend the Annual Meeting of Shareholders on Tuesday, May 25, 2021 beginning at 10:00 a.m. Eastern Daylight Time. In light of restrictions and guidelines on group gatherings issued by government and public health officials regarding the ongoing coronavirus pandemic, and to support the health and safety of our shareholders, employees, and communities, shareholders may only attend the Annual Meeting virtually. Shareholders will not be able to attend the Annual Meeting in person. Instructions on how to attend, and vote at, the Annual Meeting are described in the Proxy Statement. We look forward to your participation online or by proxy.

As your Board, we welcome this opportunity to communicate with you. In stewarding your Company, we seek to achieve long-term, sustainable performance and to create value through the right business strategies, prudent risk management, effective corporate governance practices, environmental and social initiatives, effective executive compensation programs, and well-functioning talent and succession planning. We would like to highlight a few areas of significance for the Board this past year:

An Unprecedented Year

2020 was an unprecedented year for the world and for our company.

With the COVID-19 pandemic disrupting businesses, communities, and individuals around the globe, Atlas Air Worldwide demonstrated the resiliency of its business model and the important role airfreight plays in transporting goods, particularly during times of need.

Steered by our experienced management team, everyone at Atlas worked tirelessly to navigate through a very complex regulatory and operating environment, while keeping the safety of our employees and our operation as first priorities.

Atlas remains committed to delivering safe, high-quality service for our customers and to keeping global supply chains moving throughout this pandemic.

Our company has taken decisive actions over the last several years that have strengthened our leadership position in global aviation outsourcing. These include our focus on express, e-commerce and the fastest-growing global markets, where the demand for our aircraft and services remains strong. It also includes diversifying our customer base, strategically allocating resources, reducing costs, and improving our balance sheet.

Because of these actions, Atlas was ready to respond to market demand and support COVID-19 relief efforts globally. Against the backdrop of significantly reduced international belly cargo capacity due to the pandemic, our agile business model enabled us to quickly deploy our assets and innovative solutions to serve the increased demand for dedicated airfreight capacity.

Our teams stepped up and leveraged the scale of our fleet and scope of our global network to execute on near-term opportunities. We also entered into numerous long-term charter programs with strategic customers, including Cainiao, DHL Global Forwarding, Flexport and HP Inc. These customers came to Atlas to secure dedicated capacity with our high-quality services.


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With the right team and the right initiatives in place, Atlas Air Worldwide is well-positioned to continue to deliver value to our customers and solid results for our shareholders.

2020 Financial and Operating Highlights and Key Accomplishments

Over the years, our performance has shown that our resilient business model allows us to endure challenging market conditions as well as to capitalize on attractive opportunities in more favorable environments. Our unrivaled portfolio of assets, the scale of our global network and our sound financial structure, fuel our ability to execute our strategic growth plans.

Amid ever-changing challenges driven by the COVID-19 pandemic, we added widebody capacity and increased aircraft utilization to fly record block hours. Our team delivered superior performance and service quality for our customers, and provided innovative solutions to overcome a complex operating and regulatory environment to keep their networks moving.

As a result, we delivered record revenues and earnings, including surpassing $3 billion in revenue for the first time in our company's history. We also paid down a significant amount of debt and substantially strengthened our balance sheet.

Volumes in 2020 rose to a record 344,821 block hours, with revenue growing to a record $3.21 billion and total direct contribution by our business segments increasing to $780.7 million.

Reported net income totaled $360.3 million, or $13.50 per diluted share, which included an unrealized loss on financial instruments of $71.1 million related to outstanding warrants.

On an adjusted basis, EBITDA* grew to $844.2 million, with adjusted net income* increasing to $379.0 million, or $13.67 per diluted share*.

Key developments in 2020 that we expect our business to benefit from in 2021 and going forward include:

Diversified our customer base by expanding our long-term charter business. We entered into numerous new long-term charter agreements with strategic customers, including Cainiao, DHL Global Forwarding, Flexport and HP Inc., among others.

Continued to expand our commercial relationship with leading e-commerce retailer Amazon. We began flying three additional 737-800 freighters on a CMI basis in 2020, bringing the total number of 737s we operate for Amazon to eight. Our 737 CMI operations complement the 767-300 freighter aircraft we lease to Amazon and operate for them. And we have the potential to operate additional aircraft for them in the future.

Titan Aviation Investments, the joint venture that we formed in 2019 between our Titan subsidiary and Bain Capital Credit, continued to move forward in 2020. The joint venture arranged $500 million in financing facilities during the year, which will enable it to serve the strong demand for leasing freighters. The joint venture also completed its first transaction in November 2020, which was the acquisition of a 777-200 freighter aircraft, under a sale-leaseback agreement with our Southern Air subsidiary.

Positioned for the Future

We are excited about the future for Atlas Air Worldwide and for airfreight.

Our strategic focus remains on express, e-commerce and the fastest-growing global markets.

Our companies operate the world's largest fleet of 747 freighters, along with large fleets of 777s, 767s and 737s that play a key role in our customers' operating networks and in the world's supply chain.

Our modern and diversified portfolio of assets, value-adding services, and global operating capabilities are unrivaled in our industry.


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With that as our foundation, and through the dedication of our world-class team of employees, we will continue to serve the strong demand for airfreight, while fulfilling our mission to be our customers' first choice and most trusted partner.

In turbulent times like these, it is the unmatched dedication and expertise of our team that enables us to execute our strategic plans and keep Atlas Air Worldwide on a successful trajectory.

Continued Alignment of Strategy, Performance and Executive Compensation

Our operating results and achievements are a reflection of our leadership in international aviation outsourcing, despite significant disruptions and restrictions related to the COVID-19 pandemic.

Our long-term strategy is to continue to move more deeply into the faster-growing areas of global airfreight. Driving our execution of this strategy are an experienced, dedicated team of employees focused on our customers' expectations; a modern, superior fleet tailored to meet our customers' unique needs; a broad array of value-added, global operating services; and a disciplined financial structure.

Our 2020 executive compensation programs were thoughtfully structured to align with our long-term strategy and drive our operational performance and deliver financial results. In 2020, we added a Liquidity performance metric to our Annual Incentive Plan to ensure executive focus on the Company maintaining an adequate and appropriate level of liquidity and to further align our interests with that of our shareholders. Shareholder feedback has been and will continue to be influential in shaping our governance and executive compensation programs and practices.

Recent Governance Enhancements

We regularly conduct ongoing reviews of our governance practices to incorporate specific feedback from shareholders and to ensure that we maintain best practices and enhanced disclosure in our proxy statement and other SEC filings. As a result, we implemented several noteworthy changes since our last shareholder meeting. Among other changes, we (1) amended our Audit and Finance Committee Charter to include oversight of the Company's capital structure, investment strategies, and financial policies to the Committee's list of responsibilities; (2) amended our Nominating and Governance Committee Charter to include the review of the Company's environmental and sustainability policies, practices and goals and the Company's progress toward achieving such long-term goals as an additional area of the Committee's responsibility; and (3) streamlined the presentation of information in our 2020 Annual Report on Form 10-K to enhance the ability of investors to efficiently review our disclosures.

Continued Board Refreshment — Two New Board Members on Board Slate

Our 2021 Board slate includes two new Board members. The Board and Nominating and Governance Committee have a longstanding process in place for seeking out, evaluating, and recommending potential candidates for election to the Board. Pursuant to that process, a thorough review of the skills, qualifications and tenure of our incumbent Directors, as well as the size of the Board, is undertaken in the context of our long-range strategic plan, consistent with our governance principles, and taking into account any feedback received during shareholder outreach. The Board then reviews in detail the makeup, experience, skills, and qualifications of our then-incumbent Directors and identifies areas for opportunity, including the need to add new members with particular expertise and experience that would enhance the overall strength of our current Board and the ability of the Company to execute its long-term strategic plan. Diversity with regard to gender, race and ethnicity, background, professional experiences and perspectives are also important elements considered in the Board selection process. The results of these evaluations, and the meaningful and tangible feedback generated during shareholder outreach, are also considered by the Board and the Committee in searching for and evaluating nominees who could (1) contribute important and new areas of subject-matter expertise to the Board consistent with our growing Company and long-term strategy, and (2) strengthen the overall effectiveness of the Board. Board candidates are found internally and through our use of an independent third-party search firm. Through this process, which is described in greater detail below, the Nominating and Governance Committee, with the assistance of our independent third-party search firm, has determined to recommend, and the Board to nominate, Beverly K. Goulet, who has significant senior executive experience in the aviation industry, and Carol J. Zierhoffer, who has extensive information technology and cybersecurity experience, for election as Directors of the Company at the Annual Meeting.


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Continued Focus on our Environmental, Social and Governance Commitment

We believe that our long-term growth and success as an aviation leader will be achieved by partnering with our stakeholders to sustain and protect our natural resources, empower our employees and business partners, and demonstrate transparency and accountability through responsible corporate governance. Examples of how we strive to maintain sound business practices and long-term, sustainable strategies that are designed to promote our commitment to environmental, governance and social (ESG) matters include the following, among others:

Environmental- minimize the impact of our business on the environment and partner with our customers and other stakeholders to ensure a clean, low-carbon future (such as our FuelWise program and upcoming participation in CORSIA, a global carbon-emissions program governing international flying)

Social- launched Executive and Employee Diversity, Equity and Inclusion Councils; active involvement in our local and global community through programs ranging from volunteering at local socioeconomically disadvantaged schools to providing varied and extensive aid relief during disasters and times of need

Governance- prioritize our shareholders while actively ensuring the needs of our other stakeholders are appropriately addressed — for example, earning trust and support by maintaining the highest level of legal and ethical conduct by our employees, maintaining practices and policies that create a diverse and respectful environment for our globally situated employees and reward them for their hard work, ingenuity and creativity

We recently hired a Corporate Social Responsibility ("CSR") professional to spearhead our CSR, sustainability and broader stakeholder efforts and strengthen our actions associated with our ESG commitments. Please see the section titled "Environmental, Social and Governance" for a discussion of the various ways we address these matters, which we view as an important part of our business.

We look forward to our continued dialogue with you and welcome your feedback as we execute our strategy and focus on sustainable, long-term value creation. Please feel free to share your thoughts or concerns with us. Communications may be addressed to the Board in care of the Office of the Secretary, Atlas Air Worldwide Holdings, Inc., 2000 Westchester Avenue, Purchase, NY 10577, or e-mailed to corporate.secretary@atlasair.com.

We value your input and thank you for your investment and ongoing support.

William J. Flynn, Chairman
Duncan J. McNabb, Lead Independent Director
Timothy J. Bernlohr
Charles F. Bolden, Jr.
John W. Dietrich
Bobby J. Griffin
Carol B. Hallett
Jane H. Lute
Sheila A. Stamps
John K. Wulff

   


*
Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. A reconciliation to the most directly comparable GAAP measures may be found on Page 43 and Page 44 of our 2020 Annual Report on Form 10-K, included with our Annual Report to Shareholders.

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Notice of 2021
Annual Meeting of Shareholders

To be held on May 25, 2021

We will hold the 2021 Annual Meeting of Shareholders of Atlas Air Worldwide Holdings, Inc., a Delaware corporation, on Tuesday, May 25, 2021, at 10:00 a.m., Eastern Daylight Time. The Annual Meeting will be held online, accessed through the site www.meetingcenter.io/228190353, to consider and act upon the following proposals:

1.
To elect a Board of Directors to serve until the 2022 Annual Meeting of Shareholders or until their successors are elected and qualified;

2.
To ratify the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2021;

3.
To hold an advisory vote to approve the compensation of the Company's Named Executive Officers; and

4.
To transact such other business, if any, as may properly come before the meeting and any adjournments thereof.

The foregoing matters are described in more detail in the Proxy Statement that is attached to this notice.

Only shareholders of record at the close of business on April 5, 2021, which date has been fixed as the record date for notice of the Annual Meeting of Shareholders, are entitled to receive this notice and to vote at the meeting and any adjournments thereof.

Because the Annual Meeting is virtual and being conducted online only, shareholders will not be able to physically attend the Annual Meeting. Shareholders of record and beneficial shareholders who have registered in advance may attend the virtual Annual Meeting, vote and submit questions pertinent to Annual Meeting matters. See "Attending the Annual Meeting," "Submitting a Question at the Annual Meeting" and "Voting at the Annual Meeting" for additional information. To ensure your representation at the Annual Meeting, we urge you to complete, sign and date your proxy card and return it in the postage prepaid envelope provided for that purpose. The Proxy Statement accompanying this notice describes each of the items of business listed above in more detail.

           By Order of the Board of Directors

 

 

 

 

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ADAM R. KOKAS
Executive Vice President, General Counsel and Secretary

April 16, 2021

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 25, 2021
This Proxy Statement and the AAWW 2020 Annual Report are available for
downloading, viewing and printing at https://www.ezodproxy.com/atlasair/2021.


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PROXY SUMMARY

PROXY SUMMARY

Overview of the Business

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We are a leading global provider of outsourced aircraft and aviation operating services. We operate the world's largest fleet of 747 freighters and provide customers a broad array of 747, 777, 767, and 737 aircraft for domestic, regional and international cargo and passenger operations. Our fleet total at 2020 year end was 115 aircraft, including the eight we introduced in 2020 in response to customer demand for our assets and services.

We provide unique value to our customers by giving them access to a wide range of modern, efficient aircraft, combined with outsourced aircraft operating services that we believe lead the industry in terms of quality and global scale. We operated over 68,000 flights serving more than 300 destinations in over 70 countries in 2020, reflecting our far-reaching global scale and scope.

Our customers include express delivery providers, e-commerce retailers, airlines, freight forwarders, the U.S. military, manufacturers and charter brokers. We provide global services with operations in Africa, Asia, Australia, Europe, the Middle East, North America, and South America.

Our worldwide network and the diversity of our fleet enable us to keep global supply chains and our customers' operating networks moving. We are proud that we have been able to play an important role in facilitating the movement of essential goods around the world throughout the pandemic, and grateful that our company provides a service that is helping to support COVID-19 relief efforts. As we work toward better days ahead, we remain committed to moving vaccines, pharmaceuticals, personal protective equipment ("PPE"), educational supplies, e-commerce and other daily essentials, with the safety, speed and reliability that only airfreight can provide.

Our COVID-19 Response

The COVID-19 pandemic has challenged all of us – businesses large and small, local and national governments, families and individuals – in ways few of us could have imagined. As the pandemic spread globally, we swiftly took action to support our employees, customers, partners and communities.

Our employees.    Since the onset of the COVID-19 pandemic, we have taken an integrated approach to helping our employees, all of whom are essential employees, manage their work and personal responsibilities, with a strong focus on employee wellbeing, health and safety and by providing enhanced access to mental health and financial

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wellness resources. In an effort to keep our employees connected, we also were dedicated to our employees' work flexibility.

As soon as COVID-19 started to take hold on a global scale, we seamlessly pivoted to remote working for those employees who were not required to be on-site, significantly limited business travel and site access, and implemented enhanced sanitization processes for our aircraft and facilities.

We also took the following steps, which were integral to ensuring the safety of our employees:

Formed a Coronavirus Task Force that developed action plans to ensure the effective management of risks

Developed a COVID-19 policy manual to enable our employees to access up-to-date guidance policies and procedures

Held frequent CEO-led Town Hall meetings with our employees to keep them informed about how we were actively managing the COVID-19 crisis

Implemented a free COVID-19 testing program for employees, including antibody testing

Developed enhanced cleaning protocols for our aircraft and our ground and flight operations

Implemented a proactive contact tracing policy

Issued frequent guidance on the availability and use of PPE, as well as provide complimentary masks to all employees and their families

Implemented a temperature screening process at our offices and operating sites

Provided all COVID-19 related healthcare at no cost to employees

Began development of a comprehensive return-to-work policy

Recently approved as a vaccine administrator

Our customers and partners.    We have taken meaningful actions to remain close to our customers and partners, including implementing a variety of initiatives to help them navigate their operational and financial challenges.

Our community.    We are also putting our resources behind efforts to support local communities and to assist in the public health response. We were involved in a number of mission critical transports to support frontline heroes, including coordination in the U.S. with the Coronavirus Task Force, the Federal Emergency Management Agency (FEMA), and outside the U.S. with sovereign leadership and international business partners. We also donated air cargo transport to NYU Langone Health for critical PPE. In addition, we provided meals to doctors, nurses, hospital workers, and other frontline employees.

The role of our Board and management.    The Board has been and remains highly engaged with management regarding the impact of the COVID-19 pandemic and the Company's response and plans. The Board met a total of 16 times in 2020 and many of these meetings were devoted to the Company's ongoing management of and response to the COVID-19 crisis. Management has regularly held informational calls with Board members covering employees and operations, financial impact, supply chain disruptions, and related legal and regulatory matters. Management also is engaged with the Board on identifying and addressing ongoing strategic risks and opportunities arising out of and in connection with the COVID-19 pandemic.

2020 Performance Highlights

2020 Financial and Operating Highlights and Key Accomplishments

Over the years, our performance has shown that our resilient business model allows us to endure challenging market conditions as well as to capitalize on attractive opportunities in more favorable environments. Our unrivaled portfolio

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of assets, the scale of our global network and our sound financial structure, fuel our ability to execute our strategic growth plans.

Amid ever-changing challenges driven by the COVID-19 pandemic, we added widebody capacity and increased aircraft utilization to fly record block hours. Our team delivered superior performance and service quality for our customers, and provided innovative solutions to overcome a complex operating and regulatory environment to keep their networks moving.

As a result, we delivered record revenues and earnings, including surpassing $3 billion in revenue for the first time in our company's history. We also paid down a significant amount of debt and substantially strengthened our balance sheet.

Volumes in 2020 rose to a record 344,821 block hours, with revenue growing to a record $3.21 billion and total direct contribution by our business segments increasing to $780.7 million.

Reported net income totaled $360.3 million, or $13.50 per diluted share, which included an unrealized loss on financial instruments of $71.1 million related to outstanding warrants.

On an adjusted basis, EBITDA* grew to $844.2 million, with adjusted net income* increasing to $379.0 million, or $13.67 per diluted share*.

Key developments in 2020 that we expect our business to benefit from in 2021 and going forward included:

We diversified our customer base by expanding our long-term charter business. We entered into numerous new long-term charter agreements with strategic customers, including Cainiao, DHL Global Forwarding, Flexport and HP Inc., among others.

We continued to expand our commercial relationship with leading e-commerce retailer Amazon. We began flying three additional 737-800 freighters on a CMI basis in 2020, bringing the total number of 737s we operate for Amazon to eight. Our 737 CMI operations complement the 767-300 freighter aircraft we lease to Amazon and operate for them. We also have the potential to operate additional aircraft for them in the future.

Continued to move forward with Titan Aviation Investments, the joint venture that we formed in 2019 between our Titan subsidiary and Bain Capital Credit. The joint venture arranged $500 million in financing facilities during the year, which will enable it to serve the strong demand for leasing freighters. The joint venture also completed its first transaction in November 2020, which was the acquisition of a 777-200 freighter aircraft, under a sale-leaseback agreement with our Southern Air subsidiary.

Continued Growth Opportunities

Our 2020 financial and operating results illustrate the resiliency of Atlas' diversified business model, and our ability to deliver strong earnings and free cash flow even in an uncertain environment.

Despite current market challenges, we see continuing opportunity for long-term growth in our key markets, fueled by demand for dedicated airfreight capacity, robust e-commerce and express growth, and an expanding global middle class. Further globalization will require expansive and time-definite air networks to facilitate the domestic, regional, and international flow of goods.

While directing our operating platforms and our fleet during 2020, we continued to maintain a lean management structure.

In addition, we continued to execute on strategic initiatives to diversify our business mix, generate cost savings through operating efficiencies and other continuous improvement initiatives, and enhance our portfolio of assets and services. Our actions continue to position us to capitalize on both near- and long-term market opportunities.

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2020 Performance Highlights

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Providing our customers with modern, fuel-efficient aircraft has been a long-standing focus at AAWW. We were excited to announce in January 2021 that we ordered four new 747-8Fs from Boeing. Not only does this order underscore our commitment to providing customers with the best available fleet, it also reinforces our focus on the environment by investing in the latest technologies to reduce aircraft noise, emissions and fuel consumption. We look forward to taking delivery of these leading-edge aircraft between May 2022 and October 2022.

Disciplined and Balanced Capital Allocation Strategy

Our commitment to creating, enhancing and delivering value to our shareholders reflects a disciplined and balanced capital allocation strategy. Our focus is on growing our business while generating returns above our cost of capital and maintaining a strong balance sheet.

2020 Capital Allocation Actions:

Reactivated four Boeing 747 converted freighter aircraft and operationalized one Boeing 777 freighter aircraft previously in our Titan Dry Leasing business in response to customer demand

Increased our cash and cash equivalents, short-term investments and restricted cash to $856.3 million at year-end 2020 from $114.3 million at year-end 2019

Paid $429.7 million of debt and finance lease obligations

Repaid $175.0 million previously outstanding under revolving credit facility

Secured $406.8 million through the Payroll Support Program available to air cargo carriers under the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act")

Secured $164.0 million from the refinancing of term loans on two Boeing 777 freighter aircraft

Secured $53.8 million of financing related to GEnx-engine performance-upgrade kits and overhauls

Completed disposition of nonessential assets, including one Boeing 777 freighter aircraft, one Boeing 757 freighter aircraft and one Boeing 737 passenger aircraft

   


*
Adjusted EBITDA, adjusted net income and adjusted diluted earnings per share are non-GAAP measures. A reconciliation to the most directly comparable GAAP measures may be found on Page 43 and Page 44 of our 2020 Annual Report on Form 10-K, included with our Annual Report to Shareholders.

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Our ESG Priorities

We believe that actively engaging in environmental, social and governance ("ESG") matters is critical to the long-term success of our company and benefits all stakeholders. We advanced our efforts throughout 2020, building upon a number of achievements in 2019, which included a formalized ESG Policy, the creation of an ESG Steering Council and publication of our first ESG Report.

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Environmental stewardship is a priority for us and our customers. Our FuelWise program has been in place since 2006. In addition, we've continued to expand our capabilities to track and store data on our fleet's fuel efficiency. In January 2021, we announced our intention to purchase four new 747-8F aircraft, to be delivered in 2022. These aircraft deliver 20% higher payload capacity, utilize 16% less fuel than the 747-400F and will reduce noise by approximately 30% compared to the previous generation of aircraft. We collaborate with customers to improve efficiencies and to decrease environmental impact. In December 2020, we partnered with a customer on a test flight from Spain to Mexico using sustainable aviation fuel (SAF).

As part of our commitment to diversity, equity and inclusion, in 2020 we convened our Employee and Executive Diversity, Equity and Inclusion (DEI) Councils, which guide the organization on priorities such as employee empowerment, learning and development, external advocacy, communication, and accountability and achievement.

In 2020, our Nominating & Governance Committee revised its charter to assume specific oversight responsibility for our environmental and sustainability practices. The Committee's Charter further provides that diversity (including age, gender, race, and ethnicity) should be a factor in assessing the Board's core competencies as a whole and when reviewing candidates for the Board, thus forming an integral part of the Board's refreshment process.

As a leader in international aviation outsourcing, AAWW has the opportunity to be a powerful contributor to economic and social progress, connecting people and goods to markets all over the world. We are committed to caring for the world we carry, and will do so with oversight of ESG topics that are a priority in the industry, for stakeholders and the communities in which we serve.

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Shareholder Outreach, Engagement and Responsiveness

We have engaged in extensive ongoing shareholder outreach for almost a decade to better understand our shareholders' perspectives and consider ideas for improvements to, among other things, our corporate governance, sustainability, and executive compensation practices, as well as our business strategy and performance, capital allocation strategy, and public disclosures. This year, we again engaged in a robust shareholder outreach program, reaching out to shareholders representing approximately two-thirds of our outstanding shares, establishing a dialogue with our newer shareholders, and maintaining a dialogue with those with which we have built a long-standing relationship. Based on the relationships we have solidified over the years, certain of our institutional shareholders provided positive feedback without the desire for a formal meeting. We have made meaningful changes over the past several years to our governance and executive compensation practices in response to insights gained during these discussions.

During all shareholder outreach meetings, we sought input on our overall executive pay programs, as well as emerging topics of expressed shareholder interest. We received many supportive and positive comments on the Company's direction (both from a business growth and governance perspective), and on changes made to our pay and governance programs and our Board and Committee rotation/refreshment, among others. We discussed our continued focus on sustainability efforts, including our Nominating and Governance Committee's assumption of specific oversight responsibility for sustainability matters and our newly created Corporate Social Responsibility role. In addition, our shareholders were very focused on the impact of the COVID-19 pandemic on the Company and our employees, and they were pleased by the level of Board engagement throughout the early days of the pandemic.

As a result of specific feedback from shareholders and to ensure that our programs reflect best practices, we have made meaningful changes to our compensation programs, practices, and disclosures over recent years. In addition, we made changes to our governance practices in response to topics of importance raised by shareholders, as noted below.

Summary of Recent Key Messages and Actions Related to Shareholder Outreach

 

  Topic Discussed
  How We Addressed
       

 

 

Pay-for-Performance

     

2020 CEO compensation was structured to be in line with that of a newly elected CEO, and was reduced to approximately 75% of the compensation received by predecessor CEO, to limit the opportunity for there to be a pay-for-performance disconnect. In addition, 83% of CEO compensation (at the target level) is at-risk

The 2020 compensation package for our new COO was similarly reset meaningfully lower

Notably, our total shareholder return ("TSR") year-over-year was up almost 100%

   

 

 

Impact to our compensation program due to the COVID-19 pandemic

     

No adjustments to the financial targets or metrics under our Annual Incentive Plan or long-term performance-based incentives were made

Given the Company's 2020 performance, paid company-wide bonuses to all employees who are not otherwise bonus eligible

Provided enhanced financial wellness programs to all employees

   

 

 

Board Composition and Refreshment

     

The average tenure of our Board members is 5.7 years; and, assuming the new slate is approved, over half of our Board members will have a tenure of 8 years or less

With our new Board slate, our Board will be 60% diverse, with 40% gender diversity and 30% racial and ethnic diversity

In 2020, the members of each of our Committees rotated, including the appointment of new Chairs for each of our three standing Committees

   

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  Topic Discussed
  How We Addressed
       

 

 

ESG/Sustainability

     

In response to shareholder feedback, we amended the Nominating and Governance Committee's charter to add environmental and sustainability duties to its responsibilities

Hired a Corporate Social Responsibility professional to spearhead our corporate social responsibility and sustainability efforts together with our internal ESG Steering Council, which is made up of professionals across multiple departments

   

 

 

Review of Peer Group

     

In 2020, our Compensation Committee worked with its independent compensation consultant and management to revise and revamp our peer group so that it more closely reflects the Company's significant growth and the global nature and structure of our business and operations

   

 

 

Diversity, Equity and Inclusion

     

We added a diversity, equity and inclusion objective as an individual performance objective for our named executive officers ("NEOs") under our short-term incentive plan

60% of the Board will be diverse, with 30% being racially and ethnically diverse (assuming that all Director nominees are elected at the 2021 Annual Meeting)

We launched our Executive and Employee Diversity, Equity and Inclusion Councils to drive our Company's diversity, equity and inclusions initiatives and programs

We became a signatory to the CEO Action for Diversity and Inclusion Pledge

   

 

 

Importance of Appropriate Metrics in Short-term Incentive Program

     

For awards granted in 2020, we added a Liquidity performance metric to our AIP to further align our compensation program with our shareholders' interest in the Company maintaining an adequate and appropriate level of liquidity

   

 

 

Favorability of Relative long-term incentive ("LTI") Metrics

     

We maintain a Total Shareholder Return ("TSR") modifier with a thoughtful broad comparator group. We do not provide for upward modification in the event the absolute total shareholder return is negative (even if the Comparative TSR performance achieved would have provided for an upward adjustment)

In 2021, payout of the 2018 - 2020 long-term performance awards were reduced as a result of the TSR modifier, as discussed in greater detail on page 63 of this Proxy Statement

   

 

 

Meaningful Share Ownership Guidelines

     

We maintain meaningful share ownership requirements for our CEO, executives and Board members to further align the interests of management with those of shareholders

   

 

 

Compensation Structure to Limit Inappropriate Risk Taking

     

Our Compensation Committee together with its independent compensation consultant and management monitors and reviews our executive compensation programs to identify potential sources of material risk within the programs' design and administration

The Compensation Committee's independent compensation consultant administers an annual comprehensive risk assessment

   

We regularly conduct reviews of both our governance and executive compensation practices to ensure that we maintain best practices and enhanced disclosure in our proxy statement and other SEC filings. We have also worked to expand and enhance our public disclosure around the topics of interest to our shareholders during these discussions.

In general, our outreach program has targeted shareholders representing almost 70% of our outstanding shares, with investor discussions occurring throughout the year on relevant topics and on the evolving governance and sustainability landscapes in the off-season and during the proxy season, as appropriate.

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PROXY SUMMARY

The diagram below represents our ongoing shareholder outreach process.

GRAPHIC

Compensation Program that Aligns Pay and Performance

Our compensation programs are designed to drive achievement of our business strategies and to provide competitive opportunities. Accordingly, achievement of most of those opportunities depends on the attainment of certain performance goals tied to Company performance. Our compensation programs are designed to provide compensation that:

1.
Attracts, motivates and retains high-performing executives

2.
Provides performance-based incentives to reward achievement of short- and long-term business goals and strategic objectives, which align with our operating plan, while recognizing individual contributions

3.
Aligns the interests of our executives with those of our shareholders, including by placing more than 83% of our CEO's 2020 total compensation opportunity "at risk"

In making compensation decisions for 2020, the Compensation Committee considered our operating strategy and goals, as well as comments received through our shareholder outreach program. In response to shareholder feedback, we adopted some impactful changes, as described in this summary and the Compensation Discussion and Analysis.

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PROXY SUMMARY

The Company's 2020 performance metrics that we believe are important to our shareholders are the same metrics that we used in our incentive plans in 2020:

GRAPHIC

Strong, Well-Balanced Corporate Governance Practices

Corporate Governance Highlights

We have an abiding commitment to good governance as illustrated by the following practices:

Continued focus on Board refreshment, which has resulted in the addition of two new nominees for election to the Board at the Annual Meeting
Retained an independent third-party search firm that conducted a Board composition study, devised a Board skills criteria matrix to help guide our Board recruitment process over the next several years, and helped recruit two highly-qualified Director nominees for election to the Board at the Annual Meeting
Rotation of Board and Committee Chair positions and Committee composition
Annual review of corporate governance instruments to ensure they reflect best practices
Annually elected directors
Highly qualified, diverse Board with deep industry and cybersecurity experience
Majority voting for the election of directors with a resignation policy
Lead Independent Director with clear, robust responsibilities
100% independent Audit and Finance, Compensation and Nominating and Governance Committees
Regular executive sessions of the independent Directors
Active shareholder engagement program
Overboarding policy in place for Directors regarding public company boards and committees
Regular Director Skills Assessment and Board succession planning

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PROXY SUMMARY
Meaningful share ownership guidelines for Directors and Officers
Proxy access available to three year, 3% shareholders for up to 20% of Board
Clear and robust Corporate Governance Principles
Annual "Say on Pay" vote
Anti-hedging/anti-pledging policies for Directors, Officers and employees

Shareholders should note that while the Board does not follow formal age and tenure policies, it is the Board's current expectation that Chairs (Board and Committees) will generally serve from three to five years and that members of the Board will generally serve 10-to-12 years, but not more than 12-to-15 years. Both the Board and the Nominating and Governance Committee review Board and Committee composition, tenure, refreshment, and rotation matters on a regular basis.

Director Leadership Highlights

Board Retirements and New Board Slate.    We continue to make significant and meaningful progress to refresh the leadership and composition of our Board. As described in detail below, Mr. Flynn, our Chairman, will be retiring from the Board at the time of the Annual Meeting and is expected to be replaced in that role by Duncan J. McNabb, who is currently our Lead Independent Director. Jane H. Lute will also be retiring from the Board at such time. Beverly K. Goulet, who possesses extensive senior executive experience in the airline industry, and Carol J. Zierhoffer, who has extensive experience in the information technology and cybersecurity areas, are nominees for election to the Board, and are expected to replace Mr. Flynn and Ms. Lute as Directors. An independent third-party search firm assisted our Nominating and Governance Committee, a special Board search committee, and the full Board in assembling a diverse pool of well-qualified candidates to fill the open Board positions as of the time of the Annual Meeting. The search firm also conducted a board composition study and devised a board skills criteria matrix to help guide our Board recruitment process over the next several years. See below for additional information regarding our Board refreshment efforts.

Board Skills, Qualifications and Diversity.    The charts on diversity, tenure, skills and qualifications appearing below assume that all Director nominees are elected as Directors at the Annual Meeting.

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PROXY SUMMARY

GRAPHIC

Board and Committee Oversight of Risk

The Board is responsible for overseeing management in the execution of its responsibilities and for assessing AAWW's approach to risk management. The Board exercises these responsibilities regularly as part of its meetings and also through the Board's three Committees, each of which examines various components of enterprise risk as part of their responsibilities. AAWW's enterprise risk management framework and processes are reviewed regularly.

      Audit and Finance Committee
    Compensation Committee
    Nominating and Governance Committee
                 
      Financial statement integrity and reporting         Executive compensation policies and practices         Governance structure and processes    
      Legal, regulatory and compliance         Succession planning         Shareholder matters    
      Internal controls         Human capital management         Board refreshment    
      Financing and liquidity initiatives         Pilot Profit Sharing         Environmental and sustainability matters    
      Capital structure                            

AAWW's management is responsible for assessing and managing AAWW's various exposures to risk on a day-to-day basis, including the creation of appropriate risk management programs and policies.

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    Page  

General Information

    1  

The Company

   
1
 

About the Annual Meeting

   
3
 

Record Date and Voting Securities

    3  

Quorum, Vote Required

    3  

Attending the Virtual Annual Meeting

    4  

Submitting a Question at the Virtual Annual Meeting

    5  

Voting at the Virtual Annual Meeting

    5  

Technical Questions

    6  

Replay of the Virtual Annual Meeting

    6  

Proposal No. 1 – Election of Directors

   
7
 

Director Core Competencies

    8  

Nominees for Director

    11  

Corporate Governance, Board and Committee Matters

   
21
 

Board Leadership Structure

    21  

Board Effectiveness and Annual Assessment

    23  

Board Refreshment, Evaluation and Recent Expansion

    24  

Board Oversight of Strategy

    25  

Board Oversight of Risk-Mitigation Process

    26  

Director Independence

    28  

Active and Engaged Board

    30  

Executive Sessions

    31  

Communications with the Board

    31  

Environmental, Social and Governance

    32  

Code of Ethics and Employee Handbook

    34  

Anti-Hedging, Anti-Pledging Policies

    34  

Compensation of Nonemployee Directors

    34  

Board and Committee Information

    37  

Nominating and Governance Committee

    37  

Audit and Finance Committee

    39  

Compensation Committee

    40  

Compensation Discussion and Analysis

   
43
 

Overview

    44  

Discussion of Our Compensation Program

    54  

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    Page  

Peer Group

    64  

Other Elements of Compensation

    66  

Compensation Committee Report

    68  

Compensation Tables and Explanatory Notes

    69  

Pay Ratio

   
81
 

Proposal No. 2 – Ratification of PricewaterhouseCoopers LLP as the Company's Independent Registered Public Accounting Firm for 2021

   
82
 

Proposal No. 3 – Advisory Vote to Approve the Compensation of Our Named Executive Officers

   
84
 

Stock Ownership

   
86
 

Beneficial Ownership Table

    86  

Delinquent Section 16(a) Reports

    88  

Certain Relationships and Related Person Transactions

    88  

Deadline for Receipt of Shareholder Proposals to be Presented at the 2022 Annual Meeting

   
89
 

Shareholder Proposals to Be Included in Our 2022 Proxy Statement

    89  

Proxy Access Notice Procedures

    89  

Advance-Notice Procedures

    89  

Additional Information

   
89
 

Shares Registered in the Name of a Bank, Broker or Nominee

    89  

Broker Non-Votes

    90  

Revocability of Proxies

    90  

Proxy Solicitation

    90  

Proxy Tabulation

    90  

Separate Voting Materials

    90  

List of Shareholders

    91  

Additional Copies of Annual Report

    91  

Limited Voting by Foreign Owners

    91  

Extent of Incorporation by Reference of Certain Materials

    92  

Other Matters

   
93
 

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GENERAL INFORMATION

ATLAS AIR WORLDWIDE HOLDINGS, INC.
2000 Westchester Avenue
Purchase, New York 10577

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS

May 25, 2021

GENERAL INFORMATION

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors (the "Board of Directors" or "Board") of Atlas Air Worldwide Holdings, Inc., a Delaware corporation ("AAWW" or the "Company"), for use at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on Tuesday, May 25, 2021, at 10:00 a.m., Eastern Daylight Time, and at any adjournments or postponements of the Annual Meeting. The Annual Meeting will be held online, accessed through the site www.meetingcenter.io/228190353. It is expected that this Proxy Statement and the accompanying proxy will first be mailed or delivered to shareholders beginning on or about April 22, 2021. Proxies may be solicited in person, by telephone or by mail, and the costs of such solicitation will be borne by AAWW.

THE COMPANY

AAWW is a leading global provider of outsourced aircraft and aviation operating services. We operate the world's largest fleet of 747 freighters and provide customers with a broad array of 747, 777, 767 and 737 aircraft for domestic, regional and international cargo and passenger operations.

AAWW is a holding company with two wholly owned airline operating subsidiaries, Atlas Air, Inc. ("Atlas") and Southern Air, Inc. ("Southern"). We also have a 51% economic interest and a 75% voting interest in Polar Air Cargo Worldwide, Inc. ("Polar"). In addition, we are the parent company of several wholly owned subsidiaries related to our dry leasing services (collectively referred to as "Titan"). Except as otherwise noted, AAWW, Atlas, Southern and Titan (along with all other entities included in AAWW's consolidated financial statements) are collectively referred to herein as the "Company," "AAWW," "we," "us," or "our."

Combined with Polar, AAWW provides ACMI, CMI, Charter and Dry Leasing services to DHL Express ("DHL") in support of DHL's transpacific express, North American, intra-Asian and global networks. Additionally, we fly between the Asia Pacific region, the Middle East and Europe on behalf of DHL and other customers. Atlas also provides incremental charter capacity to Polar and DHL from time to time.

Our primary service offerings include the following:

    ACMI (Aircraft, Crew, Maintenance, and Insurance): We provide outsourced cargo and passenger aircraft operating solutions, including the provision of an aircraft, crew, maintenance, and insurance. Customers assume fuel, demand, and price risk and most other operational fees and costs.

    CMI (Crew, Maintenance, and Insurance): Within ACMI, we also provide outsourced cargo and passenger aircraft operating solutions, generally including the provision of crew, line maintenance, and insurance, but not the aircraft. Customers assume fuel, demand and price risk, and are responsible for providing the aircraft (which they may lease from us), generally responsible for heavy and non-heavy maintenance, and most other operational fees and costs.

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THE COMPANY

    Charter:  We provide cargo and passenger aircraft charter services to customers including the U.S. military Air Mobility Command, brokers, freight forwarders, direct shippers, manufacturers, airlines, sports teams and fans, and private charter customers. The customer generally pays a fixed charter fee that includes fuel, insurance, landing fees, navigation fees, and most other operational fees and costs.

    Dry Leasing:  We provide cargo and passenger aircraft and engine leasing solutions. The customer operates, and is responsible for insuring and maintaining, the flight equipment.

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ABOUT THE ANNUAL MEETING

ABOUT THE ANNUAL MEETING

At our Annual Meeting, the holders of shares of our Common Stock, par value $0.01 per share (the "Common Stock"), will act upon the matters outlined in the notice of meeting at the beginning of this Proxy Statement, in addition to transacting such other business, if any, as may properly come before the meeting or any adjournments or postponements thereof. The shares represented by your proxy will be voted as indicated on your proxy, if properly executed. If your proxy is properly signed and returned, but no directions are given on the proxy, the shares represented by your proxy will be voted:

    FOR the election of the Director nominees named herein, to serve until the 2022 Annual Meeting or until their successors are elected and qualified (Proposal No. 1);

    FOR ratifying the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the year ending December 31, 2021 (Proposal No. 2); and

    FOR the adoption of an advisory vote approving the compensation of our NEOs (the "Say-on-Pay" vote) (Proposal No. 3).

In addition, if any other matters are properly submitted to a vote of shareholders at the Annual Meeting, the accompanying form of proxy gives the proxy holders the discretionary authority to vote your shares in accordance with their best judgment on that matter. Unless you specify otherwise, it is expected that your shares will be voted on those matters as recommended by our Board of Directors, or if no recommendation is given, in the proxy holders' discretion.

For additional information regarding our Annual Meeting, see "Additional Information" at the end of this Proxy Statement.

Record Date and Voting Securities

All of our shareholders of record at the close of business on April 5, 2021 (the "Record Date") are entitled to notice of, and to vote at, the Annual Meeting and any adjournments or postponements thereof. As of the Record Date, there were 29,007,024 shares of Common Stock issued and outstanding. Each outstanding share of Common Stock will be entitled to one vote on each matter considered at the Annual Meeting. A description of certain restrictions on voting by shareholders who are not "U.S. citizens," as defined by applicable laws and regulations, can be found in "Additional Information — Limited Voting by Foreign Owners" at the end of this Proxy Statement.

Quorum, Vote Required

A majority of the outstanding shares of Common Stock as of the Record Date must be present, in person or by proxy, at the Annual Meeting to have the required quorum for the transaction of business. If the number of shares of Common Stock present in person and by proxy at the Annual Meeting does not constitute the required quorum, the Annual Meeting may be adjourned to a subsequent date for the purpose of obtaining a quorum.

    Proposal No. 1: Election of Directors. In an uncontested election, a Director is elected by a majority of the votes cast (the number of shares voted "For" a Director-Nominee must exceed the number of votes cast "Against" that Director-Nominee). Shares voting "Abstain" or broker non-votes will have no effect on the election of Directors. Brokers, banks, and other nominees have no discretionary voting power in respect of this item.

    Proposal No. 2: Ratification of the selection of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the Company for the fiscal year ending December 31, 2021. The affirmative vote of a majority of the shares represented at the Annual Meeting, either in person or by proxy and entitled to vote on this proposal is required to ratify the selection of PricewaterhouseCoopers LLP. Shares voting "Abstain" will have

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ABOUT THE ANNUAL MEETING

    the same effect as a vote "Against" this Proposal 2. Brokers, banks, and other nominees have discretionary voting power in respect of this item.

    Proposal No. 3: Advisory Vote to Approve the Compensation of the Company's NEOs. Because Proposal 3 is a nonbinding, advisory vote, there is no "required vote" that would constitute approval. We value highly the opinions expressed by our shareholders in this advisory vote, and our Compensation Committee, which is responsible for overseeing and administering our executive compensation programs, will consider the outcome of the vote when designing our compensation programs and making future compensation decisions for our NEOs. Shares voting "Abstain" will have the same effect as a vote "Against" this Proposal 3. Broker non-votes will have no effect on this nonbinding advisory vote. Brokers, banks, and other nominees have no discretionary voting power in respect of this item.

Attending the Virtual Annual Meeting

General

We will host the Annual Meeting live solely via the Internet. We have designed the format of the virtual Annual Meeting to ensure that shareholders who attend will be afforded fully comparable rights and opportunities to participate as they would at an in-person meeting.

You may attend the Annual Meeting live online by visiting www.meetingcenter.io/228190353. The Meeting will start at 10:00 a.m. Eastern Daylight Time on Tuesday, May 25, 2021. All shareholders are entitled to attend the Annual Meeting; however, you are entitled to participate, meaning vote and submit questions, at the Annual Meeting only if you were a shareholder of record as of the close of business on the record date of April 5, 2021, or if you were a beneficial owner of AAWW shares as of the record date and you register in accordance with the instructions below.

The virtual Annual Meeting will begin promptly at 10:00 am, Eastern Daylight Time, on Tuesday, May 25, 2021. Online access to the audio webcast will open 15 minutes prior to the start of the Annual Meeting. Shareholders are encouraged to access the Annual Meeting prior to the start time and allow ample time to log into the audio webcast and test their computer systems.

Shareholders of Record

If you are a shareholder of record, then you do not need to register to virtually attend and participate in the Annual Meeting. You may attend and participate by accessing www.meetingcenter.io/228190353 and selecting "I have a Control Number." Enter the control number shown on your proxy card and the password for the Meeting, which is AAWW2021. If you cannot locate your proxy card but would still like to attend the Annual Meeting, you can join as a guest by selecting "I am a guest." You should note that guest attendees will not be allowed to vote or submit questions at the Annual Meeting.

Beneficial Owners

If you hold your AAWW shares in "street name," meaning a bank, broker or other nominee is the shareholder of record of your shares, you must register in advance to attend and participate in the virtual Annual Meeting. To register online in advance, you must first obtain a legal proxy from your bank, broker or other nominee. Once you have received a legal proxy from your bank, broker or other nominee, please email a scan or image of it to our transfer agent and registrar, Computershare Trust Company, N.A. ("Computershare") at legalproxy@computershare.com with "Legal Proxy" noted in the subject line. If you request a legal proxy from your bank, broker or other nominee, you should note that the issuance of the legal proxy will invalidate any prior voting instructions you have given and will prevent you from giving any further voting instructions to your bank, broker or other nominee to vote on your behalf and, in that case, you would only be able to vote at the virtual Annual Meeting.

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ABOUT THE ANNUAL MEETING

Requests for registration must be received by Computershare no later than 5:00 p.m., Eastern Daylight Time, on May 20, 2021. Upon receipt of your valid proxy, Computershare will provide you with a control number by email. Once provided, you can attend and participate in the virtual Annual Meeting by accessing www.meetingcenter.io/228190353 and selecting "I have a Control Number." Enter the control number provided by Computershare and the password, which is AAWW2021. If you do not have a legal proxy but would still like to attend the Annual Meeting, you can join as a guest by selecting "I am a guest." Please note that guest attendees will not be allowed to vote or to submit questions at the Annual Meeting.

Submitting a Question at the Virtual Annual Meeting

As part of the virtual Annual Meeting, we will hold a live Q&A session, at which time we intend to answer as many questions as time permits. You can submit questions pertinent to Meeting matters at the virtual Annual Meeting only if you were a shareholder of record of the Company at the close of business on the record date or if you were a beneficial owner as of the record date and you registered in advance in accordance with the instructions appearing above.

If you wish to submit a question, you may log into the virtual Annual Meeting website at www.meetingcenter.io/228190353 beginning 15 minutes before the start of the virtual Annual Meeting and submit your questions online. You will also be able to submit your questions during the Annual Meeting. To submit a question, you will need your control number and the meeting password, which is AAWW 2021. Once past the login screen, click on the "Messages" icon at the top of the screen and submit your question. In accordance with the rules of procedure, a copy of which will be available on the virtual Annual Meeting website, only questions pertinent to the Meeting or of concern to shareholders generally will be answered, subject to any time constraints that may be specified in the rules of procedure. Questions and answers may be grouped by topic and substantially similar questions may be grouped and answered once. Any questions that cannot be answered due to time constraints can be submitted to InvestorRelations@atlasair.com.

Voting at the Virtual Annual Meeting

If you are a shareholder of record (i.e., you hold your shares registered in your name through Computershare), you can vote your shares in one of two ways: either by proxy or if you attend the Annual Meeting online, during the Annual Meeting.

If you choose to vote by proxy, you should complete, date and sign your proxy card and return it in the pre-paid envelope provided.

You may also vote your shares online while attending the virtual Annual Meeting by visiting www.meetingcenter.io/228190353. You will need your control number included on your proxy card in order to be able to vote during the Annual Meeting. Even if you plan to attend the Annual Meeting online, we urge you to vote your shares by proxy in advance of the Annual Meeting so that if you should become unable to attend the Annual Meeting online, your shares will be voted as directed by you.

If your AAWW common shares are held in a stock brokerage account by a bank, broker or other nominee, you are considered the beneficial owner of shares held in street name, and these proxy materials are being forwarded to you by your bank, broker or other nominee that is considered the shareholder of record of those shares. As the beneficial owner, you have the right to direct your bank, broker or other nominee on how to vote your shares via the internet or by phone if the bank, broker or other nominee offers these options to you or by completing, dating, signing and returning a voting instruction form. Your bank, broker or other nominee will send you instructions on how to submit your voting instructions for your shares of our Common Stock. Shareholders are encouraged to vote and submit proxies in advance of the meeting.

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ABOUT THE ANNUAL MEETING

If you are the beneficial owner of AAWW common shares and you plan to attend and participate (i.e., vote and/or submit questions) in the Annual Meeting, please see "Attending the Annual Meeting" above for information on how to register in advance.

Technical Questions

If you encounter difficulties accessing the virtual Annual Meeting, click the "Additional Information" button on the Meeting Center login page for assistance. If you encounter difficulties after accessing the Meeting, click the "Help" button in the upper right-hand corner of the Meeting page for assistance.

Replay of the Virtual Annual Meeting

A replay of the virtual Annual Meeting will be made available publicly 24 hours after the virtual Annual Meeting at www.meetingcenter.io/228190353. If prompted for a password, please enter AAWW2021. The replay will be available for one year.

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

PROPOSAL NO. 1 – ELECTION OF DIRECTORS

Our Board has nominated ten persons to stand for election at the 2021 Annual Meeting and to hold office until the next Annual Meeting. All nominees are currently Directors elected at the 2020 Annual Meeting, except for Ms. Goulet and Ms. Zierhoffer, who are new Director candidates.

The Nominating and Governance Committee has recommended the ten nominees for nomination by the Board after an evaluation of the size and composition of the Board and a review of each member's skills, characteristics, and independence. The Board believes that each of the nominees brings strong skills, background, experience, and industry expertise to the boardroom, giving the Board as a group the appropriate balance of skills needed to exercise its oversight responsibilities and composition that aligns with our long-term strategy. The Board further believes that diversity with respect to gender, race and ethnicity, background, professional experiences and perspectives are important elements in the Board selection process. To underscore its commitment to Board diversity, the Nominating and Governance Committee charter provides that such diversity (including gender, race, and ethnicity) should be a factor in assessing the Board's core competencies as a whole. Both the Nominating and Governance Committee and the full Board will therefore consider attributes such as race, ethnicity, gender, cultural background and professional experience when reviewing candidates for the Board and in assessing the Board's overall composition.

We have an effective process in place for seeking out, evaluating and recommending potential candidates for election to the Board. The Board recognizes the importance of evaluating Board refreshment on an annual basis within the context of our overall business strategy. The Nominating and Governance Committee regularly considers the size and composition of the Board by considering the diversity, background, experience, and tenure of our Board members. Discussions are held throughout the year covering Director tenure and the skill sets then-currently represented by the incumbent Directors. These discussions are supported by a formal annual evaluation process that identifies areas of opportunity, including the need to add new members with unique expertise and experiences that the Nominating and Governance Committee and the Board believe will benefit the Company and the Board as a whole.

Through this process, which is described in greater detail below, the Nominating and Governance Committee, with the assistance of an independent third-party search firm, has determined to recommend, and the Board to nominate, Beverly K. Goulet, who has significant senior executive experience in the aviation industry, and Carol J. Zierhoffer, who has extensive information technology and cybersecurity experience, for election as Directors of the Company at the Annual Meeting. These two nominees can be expected to bring a fresh perspective and added skills and experience to help the Board effectively oversee management and to implement the Company's long-term strategy.

Each nominee has consented to be named as a nominee for election as a Director and has agreed to serve if elected. Except as otherwise described below, if any of the nominees is not available for election at the time of the Annual Meeting, discretionary authority will be exercised to vote for substitutes designated by our Board of Directors, unless the Board chooses to reduce the number of Directors. Management is not aware of any circumstances that would render any nominee unavailable. At the Annual Meeting, Directors are expected to be elected to hold office until the 2022 Annual Meeting or until their successors are elected and qualified, as provided in our By-Laws.

Because this election is not a contested election, each Director will be elected by the vote of the majority of the votes cast when a quorum is present. A "majority of the votes cast" means that the number of votes cast "for" a Director exceeds the number of votes cast "against" that Director. "Votes cast" excludes abstentions and any votes withheld by brokers in the absence of instructions from street name holders ("broker non-votes").

It is the policy of the Board that, as a condition of nomination, each incumbent Director nominated has submitted to the Secretary of the Company an irrevocable contingent resignation. This resignation will be effective only if (i) the nominee fails to receive a majority of the votes cast in an uncontested election and (ii) the Board accepts such resignation within 60 days following the certification of the election results.

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

Retiring Directors

William J. Flynn and Jane H. Lute, Directors of the Company since 2006 and 2018, respectively, are retiring from the Board and will not stand for reelection at this year's Annual Meeting. The Board wishes to thank Mr. Flynn and Ms. Lute for their service, leadership and dedication to the Company and to recognize the numerous contributions they have made during their time on the Board. Their experience and knowledge of the Company have been highly valued.

Bill Flynn joined the Company and served as our President and Chief Executive Officer from June 2006 to December 2019. He has been a Director since April 2006 and Board Chairman from August 2019 to the present. During his tenure at AAWW, Bill led the Company's transformation by helping devise and execute a multiyear strategy that diversified our operations and that are committed to the express, e-commerce and other fast-growing markets. His legacy is one of extraordinary growth in terms of revenue and financial strength. His business acumen, extensive knowledge of, and experience in, supply chain management and freight transportation, strategic vision and leadership qualities were an asset to the Company. As further discussed below, Duncan J. McNabb, currently our Lead Independent Director, is expected to succeed Mr. Flynn as Chairman at the time of the Annual Meeting.

Jane Lute joined the Board in 2018. During her time on the Board, she has brought significant leadership experience and qualities to the Board, having managed large, complex organizations over the course of her lengthy and distinguished career. Both the Board and management have benefited greatly from her expertise in cybersecurity and public policy matters. Her judgement, counsel and unique blend of insights and capabilities were invaluable to our Board.

Director Core Competencies

Board Composition and Nomination Considerations

Our Board strives to maintain an appropriate balance of experience, tenure, diversity, leadership, skills and qualifications that are of importance to our Company and the execution of our strategy. Given the diversity of our business operations, it is important to bring together Directors with differing experiences, perspectives and backgrounds to ensure proper oversight of the interests of our Company and our shareholders.

The Nominating and Governance Committee works with the full Board to determine the qualifications, skills, and experiences it believes are most relevant and responsive to the needs of our business. The Nominating and Governance Committee and the Board was assisted in 2020 by an independent third-party consulting firm in making these determinations. In doing so, the Nominating and Governance Committee takes into account a number of factors, including:

    Evolving strategic priorities;

    Existing characteristics of our Board, including tenure and diversity;

    Results of our annual Board and Committee self-evaluations; and

    Shareholder feedback sought as part of a robust outreach program.

Board Refreshment, Evaluation and Recent Board Expansion

The Board of Directors and the Nominating and Governance Committee have a process in place for seeking out, evaluating and recommending potential candidates for election to the Board. Pursuant to that process, the full Board, under the guidance of the Nominating and Governance Committee, undertakes a thorough review of the skills, qualifications and tenure of our incumbent Directors, as well as the size of the Board, in the context of our long-range strategic plan, consistent with our governance principles, and taking into account feedback from shareholder outreach. The Board then reviews in detail the makeup, experience, skills, and qualifications of our then-incumbent Directors and identifies only new areas of subject-matter expertise that would enhance the overall strength of our

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

current Board and the ability of the Company to execute its long-term strategic plan. The results of these evaluations and the meaningful and tangible feedback generated are also considered by the Board and the Committee in searching for and evaluating nominees who could (1) add new and different areas of subject-matter expertise to the Board consistent with our growing Company and long-term strategy, and (2) strengthen the overall effectiveness of the Board. Board candidates are found internally or through our use of an independent third-party search firm. Through this process, the Nominating and Governance Committee, with the assistance of an independent third-party search firm, has determined to recommend, and the Board to nominate, Beverly K. Goulet, who has significant senior executive experience in the aviation industry, and Carol J. Zierhoffer, who has extensive information technology and cybersecurity experience, for the election as Directors of the Company.

We believe that we have established and maintained highly desirable processes to ensure that we provide for thoughtful and timely Board refreshment. These processes were employed to refresh the Board by adding two new nominees for election to the Board at the Annual Meeting.

Director Skills and Experience

Our Board selected Director nominees based on their diverse skills, qualifications, backgrounds and expertise, which the Board believes will collectively provide for the effective oversight of the Company. The chart below depicts the current skills, qualifications, and expertise represented on our Board.

GRAPHIC

We view each of the skillsets discussed in the above chart to be essential to the effective oversight of the Company, as discussed further below.

    Capital Structure: Background and experience in capital structure and allocation to help the Board make informed decisions regarding the funding of our operations

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

    Civil & Governmental Aviation: Background and experience in commercial aviation and the impact of governmental regulation on the industry to help the Board deepen its understanding of the markets in which we operate

    Corporate Governance: Experience and knowledge of public-company governance issues and policies and governance best practices to support our goal to operate ethically, with accountability and transparency

    Current/Previous Senior Executive Experience: Business and strategic management experience from service in a significant leadership position such as a CEO or CFO or other senior leadership role to help us drive business strategy, growth and performance

    Cybersecurity & Information Technology: Experience in technology, innovation or cybersecurity, particularly as a senior executive, to assist us as we seek to identify and address the impact of technology on our business and our long-term success

    Finance, Accounting & Risk Management: Background and experience in finance, accounting, financial reporting or risk management to support the Board in providing effective financial oversight over a growing and increasingly complex organization

    Global Operations: Experience doing business internationally or focused on international issues and operations and exposure to markets, economies and cultures outside the U.S. that provides the Board with a diversity of perspectives in its decision-making

    International Trade: Experience in the international exchange of goods and services whose economic, social and political importance are on the rise and that are taking on a larger role in the Board's practical understanding in Company decision-making and strategy

    Legal, Regulatory & Governmental Affairs: Experience in legal, regulatory and governmental affairs, including as part of a business and/or through positions with governmental organizations, helps the Board understand legal risks and contributes to its understanding of the regulatory landscape and working with governmental agencies

    Mergers & Acquisitions: Experience that provides the Board with insight into developing and implementing strategies for our growing business

    Military Affairs: Experience in military matters to help the Board understand and oversee the development of our business and relationship with the Air Mobility Command, United States Transportation Command other government-related operations

    Public-Company Board Experience: Experience acquired on other boards to help the Board oversee an ever-changing mix of strategic, operational and compliance-related matters

    Sales & Marketing: Experience to help the Board oversee the identification and development of new markets for our services and related goods

    Strategic Planning: Experience and background in strategic planning to help the Board define and prioritize our direction, communicate our message and ensure organizational alignment that reflects a shared vision of the Company's role, values and priorities

    Supply Chain & Procurement: Experience in sourcing and managing the flow of goods and services to help us maximize customer value and to gain a competitive advantage in the marketplace

    Transportation: Experience in our business and industry that contributes to the Board's understanding in defining and prioritizing our strategy and key issues most impactful to our business

THE BOARD OF DIRECTORS OF THE COMPANY RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES NAMED ON THE IMMEDIATELY FOLLOWING PAGES.

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

Nominees for Director

  Duncan J. McNabb

GRAPHIC

Lead Independent Director
Age: 68
Director since: 2012

Committees:
    Audit and Finance
    Nominating and Governance

Other Public Company Directorships:
    AAR Corp.

Previous Public Company Directorships (last 5 years):
    None

Other Activities:
    Chairman of the Airlift/Tanker
    Association
    Chairman of Government Security
    Committee of AT Kearney Public
    Sector & Defense Services
    Co-Founder and Managing
    Partner of Ares Mobility
    Solutions, Inc.
    Director of Elbit Systems of
    America
    Former director of AdvanTac
    Technologies

 

Background: General Duncan J. McNabb, U.S. Air Force (retired), served as Commander of the United States Air Mobility Command from 2005 to 2007 and Commander of the United States Transportation Command (USTRANSCOM) from 2008 until his retirement from the Air Force in December 2011. USTRANSCOM is the single manager for air, land, and sea transportation for the Department of Defense (DOD). He also served as DOD's Distribution Process Owner, overseeing DOD's end-to-end supply chain, transportation, and distribution to our armed forces worldwide. General McNabb commanded more than $56 billion in strategic transportation assets, over 150,000 service personnel and a worldwide command-and-control network. A graduate of the United States Air Force Academy and Air Force pilot, he flew more than 5,600 hours in transport and rotary aircraft. General McNabb has held command and staff positions at squadron, group, wing, major command, and DOD levels. During his over 37-year military career, General McNabb also served as the Air Force Deputy Chief of Staff for Plans and Programs with responsibility for all Air Force programs and over $500 billion in funding over the Air Force's Five-Year Defense Plan (FYDP). He later served as Director of Logistics on the Joint Staff and was responsible for operational logistics and strategic mobility support. Before his final command at USTRANSCOM, Mr. McNabb served as the 33rd Vice Chief of Staff of the Air Force. Following retirement, General McNabb has served on a number of public, private, and not-for-profit boards and has provided strategic consulting services.

    

Board Skills and Qualifications: Civil and Governmental Aviation; Corporate Governance; Cybersecurity and Information Technology; Global Operations; International Trade; Legal, Regulatory and Government Affairs; Military Affairs; Supply Chain and Procurement; Public-Company Board Experience; Strategic Planning; Transportation and Security


    

    

    

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  Timothy J. Bernlohr

GRAPHIC

Independent Director
Age: 62
Director since: 2006

Committees:
    Audit and Finance
    Compensation (Chair)

Other Public Company Directorships:
    WestRock Company
    International Seaways, Inc.
    Skyline Champion Corporation

Previous Directorships (last 5 years):
    Chemtura Corporation
    The Cash Store Financial
    Services, Inc.
    Overseas Shipholding Group, Inc.
    Rock-Tenn Company

 

Background: Mr. Bernlohr is the founder and managing member of TJB Management Consulting, LLC, which specializes in providing project-specific consulting services to businesses in transformation, including restructurings, interim executive management and strategic planning services (TJB Management Consulting is a privately held business). Mr. Bernlohr founded the consultancy in 2005. Mr. Bernlohr was President and Chief Executive Officer of RBX Industries, Inc., which was a nationally recognized leader in the design, manufacture, and marketing of rubber and plastic materials to the automotive, construction, and industrial markets, until it was sold in 2005. Prior to joining RBX in 1997, Mr. Bernlohr spent 16 years in the International and Industry Products divisions of Armstrong World Industries, where he served in a variety of management positions.

    

Board Skills and Qualifications: Capital Structure; Corporate Governance; Finance, Accounting and Risk Management; Legal, Regulatory and Government Affairs; Mergers and Acquisitions; Current/Previous Senior Executive Experience; Supply Chain and Procurement; Sales and Marketing; Strategic Planning; Transportation and Security

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
  Charles F. Bolden, Jr.

GRAPHIC

Independent Director
Age: 74
Director since: 2017

Committees:
    Audit and Finance
    Compensation

Other Public Company Directorships:
    None

Previous Public Company Directorships (last 5 years):
    None

Other Activities:
    Director of Blue Cross/Blue
    Shield of South Carolina
    Member of the Advisory
    Committees of the UAE Space
    Agency and the Kingdom of
    Saudi Arabia Space Commission

 

Background: Major General Charles F. Bolden, Jr., Retired, U.S. Marine Corps, served as the 12th Administrator of the National Aeronautics and Space Administration (NASA) from July 2009 to January 2017. As Administrator, he led a nationwide NASA team to advance the missions and goals of the U.S. space program. General Bolden's 34-year career with the U.S. Marine Corps also included 14 years as a member of NASA's Astronaut Office. After joining the Office in 1980, General Bolden traveled to orbit four times aboard the space shuttle between 1986 and 1994, commanding two of the missions and piloting two others. His flights included deployment of the Hubble Space Telescope and the first joint U.S.-Russian shuttle mission, which featured a cosmonaut as a member of his crew. General Bolden left NASA in 1994 and returned to the operating forces of the Marine Corps. His final duty was as Commanding General of the 3rd Marine Aircraft Wing, Miramar, Calif.

    

Board Skills and Qualifications: Civil and Governmental Aviation; Corporate Governance; Cybersecurity and Information Technology; Global Operations; Military Affairs; Public-Company Board Experience; Strategic Planning; Transportation and Security

    

    

    

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  John W. Dietrich

GRAPHIC

President and CEO
Age: 56
Director since: 2020

Other Public Company Directorships:
    None

Previous Public Company Directorships (last 5 years):
    None

Other Activities:
    Chairman of the National Defense
    Transportation Association
    Director of Airlines for America
    Director of the National Air Carrier
    Association

 

Background: Mr. Dietrich became our President and Chief Executive Officer in January 2020. He was also elected to our Board of Directors at such time. Prior to January 2020, he served as our President and Chief Operating Officer from July 2019 and our Executive Vice President and Chief Operating Officer from September 2006. During the period of March 2003 to September 2006, Mr. Dietrich held a number of senior executive positions in the Company, including Senior Vice President, General Counsel, Chief Human Resources Officer, Corporate Secretary, head of the Corporate Communications function, and President of Atlas Air, Inc. Mr. Dietrich joined Atlas in 1999 as Associate General Counsel. Prior to joining us, he was a litigation attorney at United Airlines from 1992 to 1999, where he focused on employment and commercial litigation issues. He also serves as Chairman of the National Defense Transportation Association, a director of Airlines for America, and a director of the National Air Carrier Association. Mr. Dietrich earned a Bachelor's of Science degree from Southern Illinois University and received his Juris Doctorate, cum laude, from the University of Illinois at Chicago John Marshall Law School. He is a member of the New York, Illinois and Colorado Bars.

    

Board Skills and Qualifications: Capital Structure; Civil and Governmental Aviation; Corporate Governance; Current/Previous Senior Executive Experience; Global Operations; International Trade; Legal Regulatory and Government Affairs; Mergers and Acquisitions; Military Affairs; Strategic Planning; Supply Chain and Procurement; Transportation and Security

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
  Beverly K. Goulet

GRAPHIC

Independent Director
Age: 66

New Director Nominee

Other Public Company Directorships:
    Xenia Hotels & Resorts, Inc.

Other Activities:
    Director, Rolls-Royce Holdings plc

 

Background: Ms. Goulet served as Senior Vice President and Chief Integration Officer of American Airlines Group Inc. ("American") from 2013 through November 2015 and Executive Vice President and Chief Integration Officer from December 2015 until her retirement from American in June 2017. Ms. Goulet was also the Chief Restructuring Officer of American from 2011 to 2013 and Vice President — Corporate Development and Treasurer from 2002 to 2013. Prior to joining American, Ms. Goulet practiced corporate and securities law for 13 years. She received a Bachelor's degree and a Juris Doctor from the University of Michigan.

    

Board Skills and Qualifications: Capital Structure; Civil and Governmental Aviation; Corporate Governance; Current/Previous Senior Executive Experience; Finance, Accounting and Risk Management; Global Operations; Legal, Regulatory and Government Affairs; Mergers and Acquisitions; Public Company Board Experience; Strategic Planning; Transportation and Security

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

  Bobby J. Griffin

GRAPHIC

Independent Director
Age: 72
Director since: 2016

Committees:
    Compensation
    Nominating and Governance
    (chair)

Other Public Company Directorships:
    Hanesbrands Inc.
    United Rentals, Inc.
    WESCO International, Inc.

Previous Public Company Directorships (last 5 years):
    None

 

Background: Mr. Griffin served as President — International Operations for Ryder System, Inc., a global provider of transportation, logistics and supply chain management solutions from 2005 to 2007. Beginning in 1986, Mr. Griffin served in various other management positions with Ryder, including as Executive Vice President — International Operations from 2003 to 2005 and Executive Vice President — Global Supply Chain Operations from 2001 to 2003. Prior to Ryder, Mr. Griffin was an executive at ATE Management and Service Company, Inc., which was acquired by Ryder in 1986.

    

Board Skills and Qualifications: Corporate Governance; Current/Previous Senior Executive Experience; Global Operations; International Trade; Mergers and Acquisitions; Public-Company Board Experience; Supply Chain and Procurement; Strategic Planning; Transportation and Security

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
  Carol B. Hallett

GRAPHIC

Independent Director
Age: 83
Director since: 2006

Committees:
    Compensation
    Nominating and Governance

Other Public Company Directorships:
    None

Previous Public Company Directorships (last 5 years):
    None

Other Activities:
    Of Counsel, U.S. Chamber of
    Commerce
    Current member of the Customs
    Oversight Advisory Committee
    Former director of GAS
    Government Solutions, Inc.
    Former director, Rolls-
    Royce North America

 

Background: Ms. Hallett has been of counsel at the U.S. Chamber of Commerce since 2003 and served as a member of the U.S. Chamber Foundation Board of Directors from 2003 to 2015. From 1995 to 2003, Ms. Hallett was President and Chief Executive Officer of the Air Transport Association of America (ATA), the nation's oldest and largest airline trade association, now known as the Airlines for America (A4A). Prior to joining the ATA, Ms. Hallett served as senior government relations advisor with Collier, Shannon, Rill & Scott from 1993 to 1995. From 2003 to 2004, she was chair of Homeland Security at Carmen Group, Inc., where she helped develop the homeland security practice for the firm. From 1986 through 1989, Ms. Hallett served as United States Ambassador to the Commonwealth of the Bahamas. From 1989 to 1993, she was Commissioner of the United States Customs Service.

    

Board Skills and Qualifications: Civil and Governmental Aviation; Global Operations; International Trade; Legal, Regulatory and Government Affairs; Military Affairs; Supply Chain and Procurement; Public-Company Board Experience; Strategic Planning; Transportation and Security

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

  Sheila A. Stamps

GRAPHIC

Independent Director
Age: 63
Director since: 2018

Committees:
    Audit and Finance (Chair)

Other Public Company Directorships:
    CIT Group, Inc. and its wholly-
    owned subsidiary, CIT Bank N.A.
    Pitney Bowes Inc.
    Forest Road Acquisition Corp.

Previous Public Company Directorships (last 5 years):
    None

Other Activities:
    Director of IES Abroad
    Former Commissioner and Audit
    Committee Chair of the New York
    State Insurance Fund Board
    Advisory Services Faculty
    Member of the National Association
    of Corporate Directors (NACD)
    NACD Board Leadership Fellow

 

Background: Ms. Stamps has a diversity of strategic and financial experience, including governance oversight of aviation businesses. She previously served as Executive Vice President at DBI, LLC, a private mortgage investment company, from 2011 to 2012. She served from 2008 to 2011 as Director of Pension Investments and Cash Management at New York State Common Retirement Fund, and from 2004 to 2005 as a Fellow at the Weatherhead Center for International Affairs at Harvard University. Prior to this, Ms. Stamps served as a Managing Director and Head of Relationship Management, Financial Institutions at Bank of America. From 1982 to 2003, she held a number of executive positions both domestic and international with Bank One Corporation (now JPMorgan), including Managing Director and Head of European Asset-Backed Securitization and a member of the EMEA Strategic Operating Committee. Ms. Stamps holds an MBA from the University of Chicago and a CERT Certificate in Cybersecurity from Carnegie Mellon.

    

Board Skills and Qualifications: Capital Structure; Corporate Governance; Cybersecurity and Information Technology; Finance, Accounting and Risk Management; Mergers and Acquisitions; Regulatory and Government Affairs; Sales and Marketing; Strategic Planning; Current/Previous Senior Executive Experience; Public-Company Board Experience

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS
  John K. Wulff

GRAPHIC

Independent Director
Age: 72
Director since: 2016

Committees:
    Audit and Finance
    Compensation

Other Public Company Directorships:
    Celanese Corporation
    Hexion Holdings Corporation

Previous Public Company Directorships (last 5 years):
    Chemtura Corporation
    Moody's Corporation

Other Activities:
    Former Financial Accounting
    Standards Board member

 

Background: Mr. Wulff is the former Chairman of the board of directors of Hercules Incorporated, a specialty chemicals company, a position he held from July 2003 until Ashland Inc.'s acquisition of Hercules in November 2008. Mr. Wulff was previously Chief Financial Officer of Union Carbide Corporation, a chemical and polymers company, from 1996 to 2001. During his 14 years at Union Carbide, he also served as Vice President and Principal Accounting Officer from January 1989 to December 1995, and Controller from July 1987 to January 1989. Mr. Wulff was also a partner of KPMG LLP and predecessor firms from 1977 to 1987.

    

Board Skills and Qualifications: Finance, Accounting and Risk Management; Current/Previous Senior Executive Experience; Governmental and Regulatory; Capital Structure; Corporate Governance; Global Operations; Mergers and Acquisitions; Public- Company Board Experience; Strategic Planning

    

    

    

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PROPOSAL NO. 1 – ELECTION OF DIRECTORS

  Carol J. Zierhoffer

GRAPHIC

Independent Director
Age: 60

New Director Nominee

Other Public Company Directorships:
    Allscripts Healthcare
    Solutions, Inc.

Previous Directorships (last 5 years):
    MedAssets, Inc.

Other Activities:
    Director, Vizient Inc.
    Executive Advisory Board
    Member,
    OpsCruise
    Founding Board Member,
    A Little Compassion

 

Background: Ms. Zierhoffer has over 30 years of experience in the information technology industry. Most recently and until her retirement in October 2019, Ms. Zierhoffer served as the Senior Vice President and Global Chief Information Officer at Bechtel Corporation ("Bechtel"), where she oversaw Bechtel's Global Information Systems & Technology organization with responsibility for Bechtel's business and technology solutions, cybersecurity, infrastructure and operations, big data and analytics, innovation, emerging technology and knowledge management for Bechtel's business lines and projects worldwide. Additionally, Ms. Zierhoffer served as Vice President and Global Chief Information Officer of Xerox Corporation from 2012 through 2013, Vice President and Global Chief Information Officer of ITT Corporation from 2008 through 2011 and Vice President and Chief Information Officer of three Northrop Grumman Corporation sectors — Electronics, Information Technology and Mission Systems — from 2002 through 2008.

    

Board Skills and Qualifications: Civil and Governmental Aviation; Corporate Governance; Current/Previous Senior Executive Experience; Cybersecurity and Information Technology; Finance, Accounting and Risk Management; Global Operations; International Trade; Mergers and Acquisitions; Public Company Board Experience; Strategic Planning; Supply Chain and Procurement

    

    

    

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CORPORATE GOVERNANCE, BOARD AND COMMITTEE MATTERS

CORPORATE GOVERNANCE, BOARD AND COMMITTEE MATTERS

Our Board held 16 meetings in 2020. Pursuant to Board policy, Directors are expected to attend all Board and Committee meetings, as well as our annual meeting of shareholders. Each Director attended more than 75% of the meetings of the Board and committees of the Board on which such Director serves. All of the current Directors attended the 2020 Annual Meeting.

Board Leadership Structure

We have maintained separate roles for the Chairman of the Board and the CEO for over 15 years. While we do not have a formal policy in place with respect to separating or combining the positions of Chairman and CEO or having an independent Chairman, the Board evaluates its leadership structure on a periodic basis to ensure it aligns with the evolving circumstances and needs of the Company. The Board believes that its current structure as described below is in the best interest of the Company and its shareholders at this time. Notwithstanding the foregoing, on an interim basis following the passing of our late Chairman, Robert F. Agnew, in August 2019, our then CEO, William J. Flynn, held the positions of Chairman of the Board and CEO until he retired from his role as CEO in December 2019. As previously noted, Mr. Flynn will be stepping down as Chairman and retiring from the Board at the time of the Annual Meeting. Duncan J. McNabb, currently our Lead Independent Director, is expected to be elected Chairman of the Board, effective as of the date of the Annual Meeting, and to succeed Mr. Flynn in that role. At such time, the position of Lead Independent Director is expected to become vacant.

The Board of Directors currently consists of ten Directors, eight of whom are considered independent under the existing rules of the NASDAQ and the SEC. The current Chairman of the Board, William J. Flynn, who is our former President and Chief Executive Officer, and John W. Dietrich, our current President and Chief Executive Officer, are not considered independent Directors. To ensure that the Board maintains strong and independent oversight of a focused and effective management team during times when the Board Chair is not independent, the Board created the position of Lead Independent Director. Duncan J. McNabb has filled that position since mid-2019. The Board believes that General McNabb is well qualified to serve as our Lead Independent Director based on his strong leadership qualities and his extensive experience in the areas of civil and governmental aviation, military affairs, operational logistics, and supply chain and procurement. When he retired from the U.S. Air Force in December 2011, General McNabb was Commander of the United States Transportation Command, the single manager for air, land and sea transportation for the U.S. Department of Defense. He commanded more than $56 billion in strategic assets, over 150,000 service personnel and a worldwide command-and-control network. The Board further believes that these same skills, qualities and attributes will enable General McNabb to serve effectively as Board Chairman.

Our Board is structured to promote independence whether or not the Chairman is a member of executive management. The entire Board, with the exception of Messrs. Flynn and Dietrich, are independent Directors, and the Audit and Finance, Compensation, and Nominating and Governance Committees are comprised entirely of independent Directors. The independent Directors on the Board meet after each Board meeting in executive sessions that are not attended by Mr. Flynn, Mr. Dietrich or other members of management.

In addition, under our Corporate Governance Principles, the independent Directors serving on the Board annually designate a Lead Independent Director to provide leadership to the non-management members of the Board and to work with the Chairman and the President and the Chief Executive Officer to provide effective and independent oversight of our management and affairs.

The duties of the Chairman of the Board, the Chief Executive Officer and the Lead Independent Director are described below and are set forth in our By-Laws and Corporate Governance Principles.

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CORPORATE GOVERNANCE, BOARD AND COMMITTEE MATTERS

Chairman of the Board

Presides over meetings of the Board
Presides over meetings of shareholders
Guides Board discussions and facilitates discussions between the Board and management
Performs such other duties as may be assigned by the Board

Chief Executive Officer

Responsible for the affairs of the Company, subject to the overall direction and supervision of the Board and its Committees
Leads the development and implementation of the Company's short-and long-term strategy
Oversees all elements of the Company's business in accordance with the direction established in the Company's strategic plan
Builds and leads the Senior Management Team
Creates, implements, and communicates the Company's vision, mission and overall direction
Ensures that the Company maintains a high level of social responsibility wherever it does business
Communicates, on behalf of the Company, with shareholders, customers and other stakeholders, governmental authorities, and the public
Represents the Company in respect of civil and professional responsibilities and activities in the local community and at the state and national levels
Participates in industry-related events and associations that will enhance the Company's reputation and potential for success

Lead Independent Director (when non-independent Chair)

Chairs all meetings of the Board at which the independent Chairman of the Board is not present
Chairs meetings of the independent Directors of the Board and independent Director executive sessions and briefs the Chairman of the Board and senior management (as appropriate) on issues arising from these meetings and executive sessions
Helps to formulate meeting agendas, schedules, and materials provided to the Board
Calls meetings of the independent Directors of the Board, as necessary or appropriate
Works with the Chairman of the Nominating and Governance Committee to oversee the annual Board self-evaluation process
In coordination with the Chairman of the Board and the Compensation and Nominating and Governance Committees, reviews succession plans for the CEO and other senior executives, as appropriate
Communicates with major shareholders of the Company, as appropriate
Helps to build consensus and encourages a culture of engagement, open dialogue and transparency
Has such other responsibilities and authority as the Board may determine from time to time

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CORPORATE GOVERNANCE, BOARD AND COMMITTEE MATTERS

Board Effectiveness and Annual Assessment

The Board is focused on enhancing its performance through a rigorous assessment process of the effectiveness of the Board and its Committees with a view to increasing shareholder value. We have designed our Board evaluation process to solicit input and perspective from all our Directors on various matters, including, but not limited to:

Effectiveness of the Board and its operations

Board leadership structure

Board composition, including the Directors' capabilities, experiences and knowledge

Quality of Board interactions

Effectiveness of Board Committees

Efficiency of Board and Committee meetings

Effectiveness of the evaluation process itself

As set forth in its charter, the Nominating and Governance Committee oversees the Board and Committee evaluation process. The process includes written evaluation forms that assess the effectiveness of the Board and its standing Committees and that provide feedback on an unattributed basis. Candid, one-on-one discussions between the Chairman of the Nominating and Governance Committee and each of the other Board members are also conducted and provide additional individual feedback.

Periodically, we may employ the services of an independent third party to facilitate our annual evaluations of the Board and its three standing Committees (Audit and Finance, Compensation and Nominating and Governance). Regardless of whether an independent party is involved in the evaluation process, the results of the assessments are compiled without attribution into a single form and sent to the Directors for a full Board assessment and to each Committee member, for those Committees on which they serve, to identify areas for future improvement. The evaluation results and the feedback received are used to update policies and practices as appropriate. Several examples include the recent amendments to our Committee Charters and Corporate Governance Principles, the rotation of both our Committee Chairs and Committee memberships, a greater focus on diversity at all levels, improved time management at Board and Committee meetings, and a decision to hold executive sessions both at the beginning and end of Board meetings, among others.

The feedback from the assessment process is also considered by the Nominating and Governance Committee and the full Board when searching for and evaluating future Board nominees to help ensure we are adding the proper mix of subject-matter expertise and perspective consistent with the needs of our growing company and our long-term strategy. The 2020 Board assessment reflected the very positive views held by the Directors on the Board refreshment process currently in place at the Company. Results of the 2020 assessment also reflected the Board's belief that future Board candidates should possess airline industry experience, financial expertise (including M&A), chain management experience or international experience. There was also a call to consider using an independent search firm rather than relying solely on internal recommendations to identify and recruit new Directors. The Nominating and Governance Committee and the Board used this feedback in retaining an independent third-party search firm to perform a composition study of the Board, to develop a Board skills criteria matrix to help with future recruitment of Directors and to eventually assist it in helping to find candidates with senior executive experience in the airline industry and with information technology and cybersecurity experience to help fill the skills and experience gaps expected to be created by the departure of Mr. Flynn and Ms. Lute from the Board.

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CORPORATE GOVERNANCE, BOARD AND COMMITTEE MATTERS

GRAPHIC

Board Refreshment, Evaluation and Recent Expansion

We recognize the importance of Board refreshment being evaluated on an ongoing basis within the context of our overall business strategy. The Nominating and Governance Committee regularly considers the size and composition, including consideration of diversity, background, experience, and tenure, of the Board and how its members change over time. Discussions are held throughout the year covering Director tenure and the skill sets then currently represented by the incumbent Directors. These discussions are supported by a formal evaluation process that identifies areas for improvement, including the need to add new members with unique expertise and experience which the Nominating and Governance Committee believes will benefit the Company and the Board as a whole.

Through this process, we added six new Directors over the last five years, including most recently Ms. Stamps, and our two Director nominees, Ms. Goulet and Ms. Zierhoffer. These new Directors bring a fresh perspective and added skills and experience to help the Board effectively oversee management and the implementation of the Company's long-term strategy.

The Board believes that, on balance, mandatory retirement and term limits would sacrifice the contributions of Directors who have been able to develop increasing insight into our strategy and operations over time, and thus has not established a mandatory retirement age or term limits. As noted above, the Nominating and Governance Committee evaluates the qualifications and performance of each incumbent Director before recommending his or her nomination for an additional term. Additionally, our Corporate Governance Principles provide that any Director who has a significant change in his or her job responsibilities must submit a letter of resignation from the Board, which allows the Board to review the continued appropriateness of the Director's membership on the Board in light of the changed circumstances.

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In late 2020, the Board retained an independent third-party search firm (the "Search Firm") to conduct a composition study of the AAWW Board to provide a fresh, objective assessment of the Board's composition. The objective of the study was to ensure that the Board was well-positioned for the future and well-aligned with the Company's long-term business strategy and that the Board's succession plan was well informed by best practices. The Search Firm conducted a review of the Company's long-term strategy, as well as an investor governance priorities review and peer benchmarking, all of which were centered on governance and board composition. The Search Firm interviewed members of the Board and select members of senior management. Through these reviews and interviews, the Search Firm assessed the Board's overall strengths and potential future opportunities. The Search Firm was assisted in its efforts by a special committee of Directors consisting of Messrs. Flynn, Griffin, McNabb and Dietrich (the "Search Committee"). Based on the Search Firm's detailed work product and input from the Search Committee, the Search Firm developed a board skills criteria matrix to help guide Board recruitment over the next several years.

    General/Functional Experience:   Industry Expertise:            
   

Recent/Current Public Company CEO

 

Commercial Aviation Expertise

   
   

Financial Expertise

 

Cargo and Freight Operations

   
   

Consumer Supply Chain Experience

 

Digital Technology Expert

   
   

Global Business Experience

 

Other Transportation/Travel Logistics

   
   

Transformation and Growth Leader

       

The Search Firm's initial focus was to locate potential candidates with aviation executive experience. The search was expanded shortly thereafter to include potential candidates with technology and cybersecurity experience. The Board was also solicited for potential candidate recommendations. Several Board members provided recommendations, which were forwarded to the Search Firm for its consideration. The Search Committee also had a regular cadence of discussions and update meetings with the Search Firm to review current candidates, to consider new candidates and to receive follow-up details from the Search Firm on their discussions with prospective Board members.

The Search Committee's work with the Search Firm ultimately resulted in a short list of highly qualified candidates with extensive experience as senior executives in either the aviation industry or in the IT/ cybersecurity fields. From these candidate pools and through this process, we are further refreshing and strengthening our Board by adding two new Director Nominees, Ms. Goulet, who is a seasoned former aviation industry executive, and Ms. Zierhoffer, who has extensive IT and cybersecurity experience.

The following graphic illustrates how our Board assessment and refreshment processes support our commitment to help ensure that our Board collectively has the right mix of skills and experience necessary to oversee management, implement our long-term strategy and meet our evolving business and strategic needs:

GRAPHIC

Board Oversight of Strategy

Oversight of the Company's business strategy and strategic planning is a key responsibility of the Board. The Board believes that overseeing and monitoring strategy is a continuous process and takes a multilayered approach in exercising its duties.

The Board is committed to oversight of the Company's business strategy and strategic planning, including at the Committee level, along with regular Board meetings and at least one meeting each year is primarily focused on strategy. Our strategic plan is reviewed and updated as necessary and appropriate as our business evolves to meet

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growing and oftentimes changing needs and circumstances. Strategic discussions are led by John Dietrich, our CEO, and other members of senior management. This ongoing effort enables the Board to focus on Company performance over the short, intermediate and long term, as well as the quality of our operations. In addition to financial and operational performance, non-financial measures, including those related to sustainability and governance, are discussed regularly by the Board and Board Committees.

While the Board and its Committees oversee strategic planning, Company management is charged with executing the business strategy. To monitor performance against the Company's strategic goals, the Board receives frequent updates and actively engages in dialogue with the Company's Senior Management Team, which is comprised of Messrs. Dietrich, Forbes, Kokas, Schwartz and Steen and Ms. Patricia Goodwin-Peters, our Senior Vice President, Human Resources. These boardroom discussions are enhanced when circumstances permit with "hands on" experiences, such as visits to operating facilities and with key customers, providing the Directors with an opportunity to see strategy execution firsthand.

The Board's oversight and management's execution of business strategy are viewed with a long-term mindset and focus on assessing both opportunities for and potential risks to the Company, along with the goal of sustaining meaningful shareholder returns.

Board Oversight of Risk-Mitigation Process

The Board of Directors is responsible for oversight of the Company's risk-assessment and management process. It exercises its risk-oversight function both as a whole and through delegation to its three standing Committees, each of which meets regularly and reports back to the Board.

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Board/Committee Areas of Risk Oversight

  Risk
  Board
  Audit and
Finance


  Compensation
  Nominating
and
Governance



 

 

Business resiliency / disaster recovery / insurance

                                 

 

 

Capital availability/balance sheet

                               

 

 

Compensation & benefits risk

                                 

 

 

Competition

                                 

 

 

Corporate governance

                               

 

 

Credit, including liquidity and cash management

                               

 

 

Crisis management

                                 

 

 

Cybersecurity

                                 

 

 

Environmental and social responsibility

                               

 

 

Establishing / cultivating / maintaining customer relationships and profitability and customer concentration

                                 

 

 

Financial reporting and tax matters

                                 

 

 

Financial policies, investment strategies and capital structure

                                 

 

 

Fleet planning / management

                                 

 

 

Human capital / talent management / diversity, equity and inclusion

                               

 

 

Internal controls

                                 

 

 

Investor / shareholder relations

                                 

 

 

Labor relations

                                 

 

 

Legal / compliance and related matters

                                 

 

 

Long-term shareholder value creation

                                 

 

 

Macroeconomic / Geo-Socio political risk

                                 

 

 

Operations / performance / service reliability / continuous improvement

                                 

 

 

Oversight of internal and external auditors

                                 

 

 

Publicity / reputational / brand management

                                 

 

 

Regulatory matters

                               

 

 

Safety and security

                                 

 

 

Shareholder activism

                               

 

 

Strategic planning / business model

                                 

 

 

Succession planning

                             

 

 

Vendor and supply chain management, including procurement

                                 

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The Company's internal control environment facilitates the identification and management of risks and regular communications with the Audit and Finance Committee. Our Internal Audit Department conducts an annual companywide risk assessment that includes interviews with, and surveys completed by, more than 100 employees across the globe to identify and assess our highest impact areas and to devise and implement steps to monitor and mitigate risk exposures on an ongoing basis. The Legal Department also conducts anti-bribery risk assessments on a periodic basis with the assistance of outside counsel.

The Nominating and Governance, Audit and Finance, and Compensation Committees report to the Board, as appropriate, when a matter rises to the level of a material, enterprise-level risk. In addition to the reports from the Nominating and Governance, Audit and Finance and Compensation Committees, the Board regularly receives briefings from management on certain operational, safety and commercial risks, financial and liquidity risks, information technology and cybersecurity risks and human resources and human capital matters. The Board also periodically discusses risk oversight as part of its annual detailed corporate strategy review.

The Company's management is responsible for day-to-day risk management. Our Internal Audit, Safety, Security, Corporate Controller, Information Technology, Human Resources, Legal, Business Resiliency, and Treasury Departments serve as the primary monitoring and testing functions for companywide policies and procedures, and manage the day-to-day oversight of the risk-management strategy for the ongoing business of the Company. This oversight includes identifying, evaluating, and addressing potential risks that may exist at the enterprise, strategic, financial, operational, technological, compliance, and reporting levels. In addition, the Legal Department manages an online training program that provides training on key compliance matters such as anti-bribery and ethics, with course topics rotating on a periodic basis. The General Counsel reports on the results of this training quarterly to the Audit and Finance Committee.

We believe that the division of risk management responsibilities as described above is an effective approach for addressing risks facing the Company.

Director Independence

The Nominating and Governance Committee has determined that all Directors, including our new nominees, but excluding Mr. Flynn and Mr. Dietrich, are independent under Company standards and SEC and NASDAQ rules. The Nominating and Governance Committee classifies the following Directors nominated for election at the Annual Meeting as independent: Ms. Hallett and Ms. Stamps and Messrs. Bernlohr, Bolden, Griffin, McNabb and Wulff. Ms. Goulet and Ms. Zierhoffer, nominees for election as Directors at the Annual Meeting, have also been classified as independent.

Our Nominating and Governance Committee Charter includes categorical standards to assist the Nominating and Governance Committee in making its determination of Director independence within the meaning of the rules of the SEC and the Marketplace Rules of NASDAQ. The Nominating and Governance Committee will not consider a Director to be independent if, among other things, he or she:

Was employed by us at any time in the last three years;

Has an immediate family member who is, or in the past three years was, employed by us as an executive officer;

Has accepted or has an immediate family member who has accepted any compensation from us in excess of $120,000 during a period of 12 consecutive months within the three years preceding the determination of independence (other than compensation for Board service, compensation to a family member who is a nonexecutive employee, or benefits under a tax-qualified retirement plan or nondiscretionary compensation);

Is, was or has a family member who is or was a partner, controlling shareholder, or executive officer of any organization to which we made or from which we received payments for property or services in the current year

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    or any of the past three fiscal years in an amount that exceeds the greater of $200,000 or 5% of the recipient's consolidated gross revenues for the year;

Is or has a family member who is employed as an executive officer of another entity where at any time during the last three years any of the Company's executive officers serve or served on the entity's compensation committee; or

Is or has a family member who is a current partner of the Company's independent registered public accounting firm or was or has a family member who was a partner or employee of the Company's independent registered public accounting firm who worked on the Company's audit at any time during the last three years.

Pursuant to the Nominating and Governance Committee Charter and as further required by NASDAQ rules, the Nominating and Governance Committee made a subjective determination as to each nonemployee Director that no relationship exists which, in the opinion of the Board, would interfere with such individual's exercise of independent judgment in carrying out his or her responsibilities as a Director. As part of such determination, the Nominating and Governance Committee examined, among other things, whether there were any transactions or relationships between AAWW and an organization of which a nonemployee Director or Director Nominee has been a partner, shareholder, or officer within the last fiscal year. The purpose of this review was to determine whether any such relationships or transactions were inconsistent with a determination that a Director is independent.

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Active and Engaged Board

As part of the Board's ongoing review of the Company's practices and in consideration of specific shareholder feedback, our Board has implemented many compensation, Board and governance enhancements during recent years. The below table provides a summary of these changes.

    2020
    Board and Governance    
 
      Conducted a thoughtful and successful search that led to the appointment of a new CEO and COO    
 
      Nominating and Governance Committee Charter amended to add sustainability oversight duties to the list of Committee responsibilities    
 
      Published the Company's first ESG Report – Caring for the World We Carry, which is posted on the Company's website    
 
      Audit and Finance Committee Charter amended to add specific financial duties to the list of Committee responsibilities    
 
      Amended the Corporate Governance Principles to provide that AAWW Directors may now serve on no more than three public company audit committees (including the Company's Audit and Finance Committee)    
 
      Committee rotation for all three standing Committees of the Board    
 
      Chair rotation for all three standing Committees    
 
      Amended the Nominating and Governance Committee Charter to add technological competence to the list of core competencies to be possessed by the Board as a whole    
 
      Oversaw the successful CEO and COO transitions    
 
      Oversaw the strong Company response to the COVID-19 pandemic through 16 Board meetings held throughout the year and frequent communications with employees in the form of Town Hall Meetings    
 
      Enhanced the Board leadership structure by creating the Lead Independent Director role, naming a new Board Chairman and a new Chairman of the Nominating and Governance Committee, Compensation Committee, and Audit and Finance Committee    
 
    Compensation    
 
      Set Compensation Structure appropriate for our new CEO and COO    
 
      Revisions to peer group to reflect appropriate comparators for our growing and evolving global business    
 
      Compensation Committee member participation in shareholder outreach    
 
      Added Liquidity metric to our 2020 Annual Incentive Plan    
 
      Enhanced the Annual Incentive Plan by adding an individual diversity and inclusion objective for all Named Executive Officers    
 

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    Other Recent Changes
 
    Board and Governance    
 
      Elected three new directors to the Board, with a focus on cybersecurity and banking/finance skills, and each have diverse backgrounds    
 
      Made significant changes to Board leadership, including new Chairman of the Board in May 2017 and ongoing refreshment of Committee Chairs    
 
      Recurring Board briefings on cybersecurity matters by the Senior Vice President of Information Technology    
 
      Amended Nominating and Governance Committee charter to provide that diversity (including gender, race and ethnicity) should be a factor in assessing the Board's core competencies as a whole    
 
      Moved to proactively prevent potential over-boarding issues by amending Corporate Governance Principles to limit directors to serving on a maximum of four public-company boards (including the Company's board)    
 
      Amended and enhanced the Corporate Governance Principles to provide for a Lead Independent Director position    
 
    Compensation    
 
      Transitioned to strict double-trigger standard for all awards, requiring actual separation from service for second trigger    
 
      Added relative TSR performance measure to LTI awards to further strengthen pay-for-performance alignment with no upward modification in the event the absolute TSR is negative (even if the Comparative TSR performance achieved would have provided for an upward adjustment)    
 
      Enhanced disclosure around LTI performance target setting and payouts    
 
      Increased CEO stock ownership guidelines to 6x base salary to further align CEO incentives with shareholders    
 

Executive Sessions

The outside members of the Board, as well as our Board Committees, meet in executive session (with no management Directors or management present) on a regular basis, as well as upon the request of one or more outside Directors. The sessions have been generally scheduled and led by the Lead Independent Director, and executive sessions of our committees are chaired by the respective committee chair. The executive sessions include topics the outside Directors or Committee members deem appropriate.

Communications with the Board

The Board of Directors welcomes input and suggestions. Shareholders and other interested parties who wish to communicate with the Board may do so by mail to the Office of the Secretary, Atlas Air Worldwide Holdings, Inc., 2000 Westchester Avenue, Purchase, NY 10577, or e-mail to corporate.secretary@atlasair.com. All communications received by Directors from third parties that relate to matters within the scope of the Board's responsibilities will be forwarded to the Chairman of the Board. All communications received by Directors from third parties that relate to matters within the responsibility of one of the Board committees will be forwarded to the Chairman of the Board and the Chairman of the appropriate committee. All communications received by Directors from third parties that relate to ordinary business matters that are not within the scope of the Board's responsibilities are forwarded to AAWW's General Counsel.

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Environmental, Social and Governance

Our environmental, social and governance (ESG) journey, which began with the Company's founding, is rooted in our core values, including our unyielding commitments to safety, security, compliance and working as a team to deliver superior results to customers worldwide. We believe long-term growth and success are achieved by sustaining and protecting our natural resources, empowering our employees and business partners, and demonstrating transparency and accountability through responsible corporate governance.

We have formalized our current ESG strategy and policy by establishing an internal ESG Steering Council that is comprised of cross-functional business leaders, including leaders from Safety and Compliance, Sustainability, Procurement, Legal, Communications, Human Resources, Investor Relations, and Regulatory Affairs, who work with an third-party consultant and our senior executive team to develop our ESG vision: to be an aviation industry leader that partners with our stakeholders to foster economic and social progress while safeguarding the environment.

GRAPHIC

Our full Board of Directors has accountability and broad oversight of our ESG initiatives and performance, and receives periodic updates from members of our senior executive team. Our Nominating and Governance Committee also works closely with senior management and our ESG Steering Council to oversee and monitor certain key ESG initiatives. ESG performance is important to our customers, employees and other stakeholders and is playing an increasingly prominent role in our long-term sustainable growth plan. Accordingly, active shareholder engagement and dialogue is an integral part of our sustainability commitment.

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The table below highlights some of our environmental and social programs and policies. To learn more about our ESG initiatives, please visit our website to read our 2019 ESG report, "Caring for the World We Carry," which was published in late 2019. Our ESG Report may be viewed on our corporate website under "About Us-ESG Report" at https://www.atlasairworldwide.com/esg-pages/esg-report/.

          Priorities
  Practices & Policies
    Environmental     Reducing Aircraft Emissions

Reducing Aircraft Noise

Reducing Resource Consumption

     

Participating in CORSIA, the United Nations program to reduce CO2 from airlines emissions by 50% by 2050

Current & future fleet purchases are superior in terms of fuel efficiency, range, noise, capacity and loading capabilities

747-8F and 777 aircraft are approximately 15% more fuel-efficient than our 747-400s and produce approx. 15% lower carbon dioxide emissions and are 30% less noisy

Conserve fuel wherever possible through our FuelWise fuel-management information system, which has been producing results since 2006. FuelWise enables tracking of fuel-burn rates to identify additional opportunities to conserve fuel

Work closely with customers to plan routes that are more fuel-efficient

Quality & Safety protocols have produced a strong record of no significant spills of fuel, de-icing fluids or other liquids

   
   
    Social     Safety & Security

Employee Experience

Community Impact & Philanthropy

Enhancing Global Prosperity

Labor Relations

     

Health and safety of our employees, particularly our crewmembers, is of paramount importance. Our Safety Management System encompasses our Safety Policy; Risk Management; Safety Assurance; and Safety Promotion

We are driving improvement in DEI through a number of initiatives, including the establishment of Employee and Executive DEI Councils that represent a broad demographic and geographic population of employees

We have affirmative action plans in place to ensure that qualified applicants and employees are receiving an equal opportunity for recruitment, selection, advancement and every other term and privilege associated with employment at AAWW

We provide cost-free charter flights for disaster relief and respond to critical needs that develop in the communities where we have a significant business presence

   
   
    Governance     Corporate Governance

Ethics & Integrity

Compliance

Data Privacy & Cybersecurity

Public Policy Advocacy

     

Nominating & Governance Committee revised its charter to assume specific oversight responsibility for sustainability matters

Participate in industry and governmental initiatives to optimize air traffic management systems to promote reductions in fuel use and emissions and fewer interruptions at airports

Our Code of Conduct sets forth business policies and practices that guide our company culture and apply to all employees of any AAWW subsidiary in accordance with laws and best practices

Our Audit and Finance Committee monitors our Code of Ethics for members of the senior management team and the Board; it is reviewed on an annual basis

We have a "zero tolerance" policy for harassment, discrimination or retaliation of any kind in the workplace

Our data protection and cybersecurity practices are rigorous and assured by third-party specialists

   

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Code of Ethics and Employee Handbook

Our Audit and Finance Committee monitors our Code of Ethics applicable to the CEO, Senior Financial Officers and Members of the Board of Directors. The Code includes certain provisions regarding disclosure of violations and waivers of, and amendments to, the Code of Ethics by covered parties. The Code of Ethics is reviewed on an annual basis by our Audit and Finance Committee. Any person who wishes to obtain a copy of our Code of Ethics may do so by writing to the Office of the Secretary, Atlas Air Worldwide Holdings, Inc., 2000 Westchester Avenue, Purchase, NY 10577. A copy of the Code of Ethics is available in the "About Us – Structure and Governance" section of our website at www.atlasairworldwide.com.

We regularly conduct a comprehensive global review of our Employee Handbook and Code of Conduct to ensure it is compliant with applicable laws and consistent with best practices. The Employee Handbook addresses such topics as compliance with applicable federal, state and local laws; expectations regarding employee conduct; equal employment opportunity; promoting a workplace free from harassment and discrimination; paid time off and work place leaves; protection of intellectual property and proprietary information; and numerous other personnel policies and procedures. The Employee Handbook and Code of Conduct was recently updated and is made available to all new and current employees.

Anti-Hedging, Anti-Pledging Policies

In addition to prohibiting Directors, Officers and employees from trading in AAWW stock while in possession of material non-public information, our Insider Trading Policy also prohibits certain transactions in AAWW stock that may create the potential for the interests of a Director, Officer or employee to diverge from the interests of AAWW and its shareholders. In particular, our policy prohibits Directors, officers and employees from:

    Engaging in hedging or other monetization transactions involving AAWW's securities, including through the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds, among others
    Engaging in transactions involving AAWW's securities and put options, call options or other derivative securities, on an exchange or in any other organized market
    Holding Company securities in a margin account or pledging AAWW securities as collateral for a loan
    Short-selling our securities

Compensation of Nonemployee Directors

The compensation of our nonemployee Directors is reviewed by the Compensation Committee on a periodic basis. In 2020, the Compensation Committee reviewed the compensation amounts for nonemployee directors in tandem with Pay Governance, the Compensation Committee's independent consultant. Based on such review, the Committee determined that the compensatory arrangements currently in place for the nonemployee Directors are reasonably aligned with Company size and that no changes to such arrangements would be made.

Compensation for our nonemployee Directors consists of the following:

Cash Retainer

    Each of our nonemployee Directors receives a $95,000 annual cash retainer, payable quarterly in advance.

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Equity Compensation – Restricted Stock Units

    On the date of our annual meeting of shareholders, each of our nonemployee Directors receives a grant of restricted stock units for a number of shares having a value of $110,000 (calculated based on the closing price of our Common Stock on the date of grant).

    The RSUs generally vest and are automatically converted into common shares on the one-year anniversary of the date of grant.

    Nonemployee directors have the option to defer the receipt of common shares resulting from the vesting of their restricted stock units.

Chairman / Lead Independent Director Positions

    The Chairman of the Board receives $150,000 annually;

    The Chairs of the Audit and Finance Committee, the Compensation Committee and the Nominating and Governance Committee receive $20,000, $15,000 and $15,000, respectively, per year; and

    The Lead Independent Director receives $50,000 annually.

Meeting Fees

    Directors do not receive regular meeting fees. However, if more than six meetings of the Board or any Committee occur (determined independently) in any given year, meeting fees are paid at the rate of $1,500 per meeting (with the Chairman of the Board or the Committee Chair being paid at the rate of $3,000 for any such meeting).

Medical, Dental and Vision Care Insurance (frozen and only available to those who became a Director in or prior to 2011)

    Optional medical, dental and vision care coverage for certain nonemployee Directors and their eligible dependents on terms and at a premium cost similar to that charged to employees. (Currently one participant.)

    Participation in the Company's medical plans (at full premium cost to the Director) following retirement from the Board until becoming Medicare eligible, provided that the Nonemployee Director retired after attaining age 60 and had at least 10 years of Board service. (Currently no participants.)

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2020 Total Compensation of Nonemployee Directors

The following table shows (i) the cash amount paid to each nonemployee Director for his or her service as a nonemployee Director in 2020, and (ii) the grant date fair value of restricted stock units awarded to each nonemployee Director in 2020, calculated in accordance with the accounting guidance on share-based payments. Mr. Dietrich did not receive any additional compensation for his service as a Director in 2020.

       Name
         (a)

Fees Paid in Cash
($)
(b)



Stock Awards
($)(1)
(c)



Total
($)
(h)
Timothy J. Bernlohr   129,000   110,009   239,009
Charles F. Bolden, Jr.   108,500   110,009   218,509
William J. Flynn   263,000   110,009   373,009
Bobby Griffin   122,000   110,009   232,009
Carol B. Hallett   116,000   110,009   226,009
Jane H. Lute   107,000   110,009   217,009
Duncan McNabb   158,500   110,009   268,509
Sheila A. Stamps   118,500   110,009   228,509
John K. Wulff   110,000   110,009   220,009
(1)
These units vest on the one-year anniversary of the grant date. The grant date fair value was $41.31 per share.

Nonemployee Directors' Outstanding Equity Awards at Fiscal Year-End 2020

The table below shows outstanding equity awards for our nonemployee Directors as of December 31, 2020.

       Name


Grant Date
Number of Shares or
Units of Stock That
Have Not Vested
(#)(1)




Market Value of
Shares or Units of
Stock That
Have Not Vested
($)(2)

Timothy J. Bernlohr

  6/9/2020   2,663   145,240

Charles F. Bolden, Jr.

  6/9/2020   2,663   145,240