Spirit Airlines Is Currently Worth Less Than the Top Executives’ 2023 Pay - How Did This Happen?
Spirit Airlines Is Currently Worth Less Than the Top Executives’ 2023 Pay - How Did This Happen?
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February 19th, 2025
Thanks to Bernadette Giacomazzo
A new sobering report about Spirit Airlines revealed that the airline currently has a lower valuation than the top executives’ 2023 pay. The report also revealed that the beleaguered airlines’ shareholders hold a total valuation of just over $12 million. Let’s take a look at what happened to this once-popular airline.
Spirit Airlines’ Bankruptcy Filing Left It Penniless
According to Quartz, after declaring bankruptcy in November, Spirit Airlines has provided investors with an update on its continuing restructuring. As part of that process, it submitted a financial statement to the Securities and Exchange Commission revealing that its equity is worth less than the combined salaries of the company’s top executives in 2023.
The airline stated that its present equity is worth only $12.6 million, which is not surprising considering that owners typically lose the entire value of their interests during bankruptcy proceedings while they wait for debtors to be paid back. Before bankruptcy, Spirit reported equity of $504 million in a quarterly earnings report.
However, as a reflection of how far Spirit Airlines has fallen, its equity is now worth less than the $18.3 million in executive compensation outlined in its most recent annual proxy statement. This is because the company’s shares were delisted by the New York Stock Exchange shortly after the bankruptcy filing and are now traded among the pink-sheet penny stocks.
The executives’ salaries in 2023 are as follows:
- CEO Ted Christie: $6.6 million in salary and bonuses
- Then-CFO Scott Haralson: $3.6 million
- COO John Bendoraitis: $3.1 million
- CCO Matthew Klein: $2.9 million
- CIO Rocky Wiggins: $2.1 million
The $5.4 million in retention bonuses authorized only days before the November bankruptcy filing — $3.8 million for Christie and $175,000 for new CFO Frederick Cromer, as long as they remain with the company in good standing for a year — are not included in this equity comparison.
The report, which will be the first in a series of monthly fiscal reports, also reveals that the airline made $351 million between the Nov. 18 Chapter 11 filing and Nov. 30 but lost $316 million, mostly because of $290 million in costs that were assigned to “other expenses.”
The Bankruptcy was Necessary
Back in November 2024, Spirit Airlines filed for Chapter 11 bankruptcy protection. The move followed the fall-through of the initial proposed plan for fellow discount airline, Frontier Airlines, to purchase the company’s assets in a merger deal.
In order to help the low-cost airline get through its bankruptcy, which it expects to finish in the first quarter of 2025, its bondholders agreed to contribute $300 million in debtor-in-possession financing as part of a prearranged arrangement. Spirit said it will not hinder aircraft lessors or vendors.
The airline encouraged travelers to continue making reservations and stated that it anticipates continuing to operate regularly.
“The most important thing to know is that you can continue to book and fly now and in the future,” Spirit Airlines CEO Ted Christie said in a letter to customers on Monday, Nov. 18. He also assured customers that they can still use tickets, credits, and loyalty points normally.
The Dania Beach, Florida-based airline faced several challenges, including an engine recall that grounded dozens of its aircraft, a surge in costs after the COVID-19 pandemic, and the failure of its planned acquisition by JetBlue Airways, which was blocked earlier this year by a federal judge on antitrust grounds. Its stock fell 90% this year alone.
After The Wall Street Journal first reported on the bankruptcy talks in mid-November, Spirit Airlines’ shares dropped 47%. The airline also announced at the time that it would not be “able to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 (the “Q3 2024 Form 10-Q”) by the prescribed due date without unreasonable effort or expense,” according to an official notice.
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