[ Exhibit 10.21, Panel A indicates that pilot pay is similar at Delta and American Airlines. Panel B, however, indicates that profit sharing (here, for all employees, including pilots) is another story. Profit-sharing payouts for employees at Delta are about 12x those at American on average. One reason for the difference is different profits. However, the formulas are also very different. American's plan pays out 5 percent of pre-tax earnings. In contrast, Delta's plan pays out 10 percent of pre-tax earnings 20 percent of pre-tax earnings above $2.5 billion. Just focusing on pilots, given the plan descriptions above, pilots at Delta would regularly receive anywhere from 2 to 4 times larger of a profit-sharing payout than pilots at American having the same salary, even if the two airlines were equally profitable. Not surprisingly, American pilots and other employees have noticed the difference. American is now proposing a profit sharing plan identical to that of Delta. 1. Take a look at the American Customer Satisfaction Index for the airline industry for 2019 and 2020 at: https://www.theacsi. org/index.php?option=com_content\&view=article\&id=147\&catid=\&ltemid=212\&i=Airlines. Is there any correlation between customer satisfaction and profit sharing? (You should answer "yes" because Delta and Southwest are highest, United and American lowest.) Why do you think that might be the case? For your consideration, note that Joseph Blasi, Director of Rutgers University's Institute for the Study of Employee Ownership and Profit Sharing states that profit sharing "helps companies keep employees invested in making a profit," Blasi said. "When they are getting some of the profits, employees are more motivated to work toward efficiencies and solving customer service problems." What do you think? Also, does agency theory apply here? 2. Any idea why American has a less lucrative profit-sharing plan? Is it possible that the pilots at American were traditionally more focused on negotiating higher base salaries, which do not fluctuate (unlike profit sharing)? Above, American was said to be "proposing a profit sharing plan identical to that of Delta." What will American want in return? Again, how would agency theory apply here? 3. Delta's profit sharing payout in 2020 was zero. Why? Is this the way a "variable pay" plan like profit sharing is supposed to work? EXHIBIT 10.21 Pay in the Airline Industry Part A. Pilot Hourly Pay by Plane Type and by Pilot Years of Experience