Year 2016

BOARD MEMBERS’ COMPENSATION

2016     
Board membersPositionBoard member’s allowance (US$)Board member’s Committee allowance (US$)Subcommittee allowanceTotal (US$)
(US$)
Mauricio AmaroPresident25,029-1,99227,021
Francisco Luzón LópezBoard member2,47--2,47
Juan José Cueto PlazaBoard member19,071-13,87932,95
Ramón Eblen KadisBoard member19,07125,55512,49757,123
Juan Gerardo Jofré MirandaBoard member19,07125,55512,49757,123
Carlos Heller SolariBoard member15,576--15,576
Georges Antoine de Bourguignon ArndtBoard member19,07125,55512,48957,115
Ricardo J. CaballeroBoard member6,212-2,9769,188
Henri Philippe ReichstulBoard member13,774-10,02423,798
2015     
Board membersPositionBoard member’s allowance (US$)Board member’s Committee allowance (US$)Subcommittee allowanceTotal (US$)
(US$)
Mauricio AmaroPresident38,315-9,22447,539
Francisco Luzón LópezBoard member15,333-10,73526,068
Juan José Cueto PlazaBoard member21,106-13,83934,945
Ramón Eblen KadisBoard member21,10623,1512,26156,517
Juan Gerardo Jofré MirandaBoard member21,10628,28215,34464,732
Carlos Heller SolariBoard member15,349-1,52716,876
Georges Antoine de Bourguignon ArndtBoard member21,10628,28212,25261,64
Ricardo J. CaballeroBoard member15,36-9,23324,593
Henri Philippe ReichstulBoard member21,106-10,80431,91

It should be noted that the compensations thus reported correspond to allowances for monthly attendance to Board of Directors’ Meetings and Directors’ Committee Meetings pursuant to the resolution approved by the Ordinary Shareholders Meeting of April 28, 2015.

During the year 2016, neither the Board of Directors nor the Directors’ Committee incurred in any additional consulting service costs.

ORGANIZATIONAL CHART

During 2017, the Company will implement a new organizational structure focused on four basic areas –Clients, Revenue, Operations and Fleet, and Finance– which will be the pillars of the Company’s business strategy and will report directly to the CEO LATAM. The new structure will be simpler, more efficient and more functional, and will enable the Company to face an increasingly competitive environment. With this reorganization that will focus on functions instead of business units, the Company expects to optimize its internal synergies and strengthen its structure.

The Clients area will be initially led by Claudia Sender. This area will focus on providing the client with a complete experience. The Revenues area, focused on maximizing revenues for the Company, will be initially led by Roberto Alvo Milosawlewitsch, who will be LATAM’s Chief Commercial Officer. The Operations and Fleet area will be initially led by Hernan Pasman, who will be responsible for the Operations and Fleet Vice-presidency. The Finance area will preserve its existing organization and structure, and will be led by Ramiro Alfonsín, the current Chief Financial Officer of the Company

During the year 2016, the LATAM Airlines Group paid to all its senior executives a total of US$ 40,194,453 and US$ 14,980,291 corresponding to performance incentives paid in March 2017.  Consequently, the company paid to its senior executives a total gross remuneration amounting to US$ 55,174,744.

On the other hand, during the year 2015, the LATAM Airlines Group paid to all its senior executives a total of US$ 40,404,395, in addition to US$ 13,789,916 corresponding to performance incentives paid in March 2016.  Consequently, the company paid to its senior executives a total gross remuneration amounting to US$ 54,194,311.

COMPENSATION PLANS

(a)   Capital increase Compensation Plans

(a.1) 2011 Compensation Plan

On December 21, 2016, the subscription and payment period of the 4,800,000 shares corresponding to the compensation plan approved at the Extraordinary Shareholders Meeting held on December 21, 2011 (the “2011 Compensation Plan”), expired. Of the total shares allocated to the 2011 Compensation Plan, only 10,282 shares were subscribed and paid and were placed on the market in January 2014. At the expiration date, the 2011 Compensation Plan had a balance of 4,789,718 unsubscribed and unpaid shares, which was deducted from the authorized capital of the Company.

(a.2) 2013 Compensation Plan

At the Extraordinary Shareholders Meeting held on June 11, 2013, the Company’s shareholders approved a capital increase and the allocation of 1,500,000 shares to compensation plans for employees of the Company pursuant to Article 24 of the Chilean Corporations Law. The Company has not defined a date for implementation of this compensation plan yet.

(b) The 2016-2018 Compensation Plan

The Company implemented a long-term retention plan for executives, with an end date of December 2018 and a vesting period between October 2018 and March 2019. The plan contemplates an extraordinary bonus to be paid in cash, whose calculation formula based on the variation of the value of the Company’s shares over a certain period of time.

For more information, please see note 34 Note to our consolidated financial statements.