AL Air Lease Corporation

Executive Compensation Highlights

Compensation Philosophy

Our executive compensation program is designed to attract, retain and motivate the highest caliber executives in the aircraft leasing industry by offering a comprehensive compensation program that is attractive enough to entice and retain successful senior executives. We also believe it is important that our compensation program attracts the highly talented executive who is experienced and capable of managing our aircraft fleet with a small team to help drive our profitability.

At the end of 2019, we had total revenues of $2.0 billion and we had 117 employees, resulting in 2019 revenue per employee of approximately $17.2 million and total compensation expense representing 3.6% of revenues. We believe that the ratio of employees to total revenue and total compensation as a percentage of revenues compares favorably to other companies in capital-intensive businesses.

Compensation Governance

Our leadership development and compensation committee regularly reviews our compensation governance practices to ensure we are incentivizing hard work and high performance while also managing risk. Our executive compensation program currently includes the following features:

Pay-for-Performance Philosophy

Our executive compensation program is designed to reward our executives for contributing to the achievement of our annual and long-term objectives. We set robust goals to align performance-based compensation with the creation of long-term value for our stockholders. We also believe that our directors’ and employees’ ownership of our stock is critical to alignment with our stockholders. Our 117 employees, along with our independent directors, collectively own approximately 7% of the Company’s Class A Common Stock.

2020 Proxy Statement   |  Air Lease Corporation  |  v

Engagement with Stockholders and Compensation Program and Disclosure Enhancements

To better understand our investors’ perspectives regarding our executive compensation program, for the last several years we have conducted stockholder outreach. After issuing our proxy statement in March 2019, we engaged with holders of over 40% of outstanding shares (none of whom were our employees or directors) to specifically discuss our compensation philosophy and program and to listen to their feedback. We continued our outreach during 2019 and early 2020. The leadership development and compensation committee considered our stockholders’ views when making decisions about changes to our 2019 and 2020 compensation programs.

Over the last several years we enhanced our executive compensation program in response to evolving compensation practices and feedback from our stockholder engagement efforts, specifically by making the following responsive changes:

vi  |  Air Lease Corporation  |  2020 Proxy Statement

2020 Proxy Statement   |  Air Lease Corporation  |  vii

Air Lease Corporation

2000 Avenue of the Stars, Suite 1000N

Los Angeles, California 90067

(310) 553-0555

Members and Meetings of the Board of Directors

Our Board of Directors is currently composed of nine members: Matthew J. Hart, Cheryl Gordon Krongard, Marshall O. Larsen, Susan McCaw, Robert A. Milton, John L. Plueger, Ian M. Saines, Ronald D. Sugar, and Steven F. Udvar-Házy. Dr. Sugar is not standing for re-election at the Annual Meeting. As a result, the Board has approved setting the size of the Board at eight directors, effective upon the commencement of the 2020 annual meeting of stockholders (“Annual Meeting”). Dr. Sugar, however, will continue to serve as a member of the Board until the Annual Meeting. Our directors serve for one-year terms until the next annual meeting of stockholders, and until their respective successors are duly elected and qualified or until his or her resignation or removal. Certain information regarding our directors is set forth below in Proposal 1: Election of Directors.

Our Board of Directors held six meetings in 2019 and average director attendance at all meetings of our Board and meetings of any of our Board committees on which such director served was 97.5%. Each of the director nominees standing for election at the Annual Meeting attended at least 80% of the meetings of the Board of Directors and the committees of the Board of Directors on which he or she served in 2019. We expect but do not require our directors to attend the annual meeting of stockholders each year. All of our directors who stood for election at the 2019 annual meeting other than Mr. Saines attended that meeting.

Director Independence

Each director will qualify as “independent” pursuant to the New York Stock Exchange (the “NYSE”) listing standards only if our Board of Directors affirmatively determines that he or she has no material relationship with us, either directly or as a partner, stockholder or officer of an organization that has a relationship with us. Accordingly, our Board of Directors has affirmatively determined that seven of our nine current directors, Mr. Hart, Ms. Krongard, Mr. Larsen, Ms. McCaw, Mr. Milton, Mr. Saines and Dr. Sugar, were independent in accordance with the NYSE rules during the periods in 2019 and 2020 that they served as directors of our Board. Mr. Milton serves as our lead independent director. Messrs. Udvar-Házy and Plueger are not independent because they are employees of Air Lease Corporation (the “Company”).

2020 Proxy Statement   |  Air Lease Corporation  |  1

Board of Directors’ Leadership

The Board of Directors currently has no firm policy as to whether the roles of Chairman of the Board of Directors and Chief Executive Officer should be combined or separate. Instead, our Board of Directors believes that our leadership structure should be considered in the context of our Company’s circumstances at any given time, including company culture, strategic objectives and any challenges we may be facing. Therefore, our Board of Directors evaluates its leadership structure annually to ensure that the most optimal structure is in place for our Company’s needs – which may evolve over time.

Our Corporate Governance Guidelines provide that in the event that the Chairman of the Board of Directors is not an independent director, the nominating and corporate governance committee may designate an independent director to serve as “Lead Director,” who shall be approved by a majority of the independent directors. The Board of Directors believes having an independent Lead Director provides an appropriate balance between strong Company leadership and appropriate oversight by independent directors.

As part of our Board of Directors’ long-term succession plans for the Company, effective July 1, 2016, the Board established the separate executive position of Executive Chairman of the Board of Directors. Mr. Udvar-Házy, our founder and former Chief Executive Officer, now serves as the Executive Chairman of the Board of Directors, and in addition to his executive officer role, chairs the meetings of the Board of Directors and works closely with Robert A. Milton, our independent Lead Director. John L. Plueger, our Chief Executive Officer, also works closely with Mr. Milton in his role.

The role of the independent Lead Director helps ensure oversight by an active and involved independent Board of Directors, while Mr. Udvar-Házy’s continued engagement as Executive Chairman of the Board enables the Company and the Board of Directors to benefit from his deep knowledge, industry relationships, and operational experience.

Mr. Milton has been elected annually by the independent directors of the Board of Directors to serve as independent Lead Director since our initial public offering in 2011. In this role, Mr. Milton has the following responsibilities as set forth in our Corporate Governance Guidelines and as requested by the Board of Directors:

2  |  Air Lease Corporation  |  2020 Proxy Statement

Mr. Milton also serves on each committee of the Board. The Board of Directors believes that Mr. Milton’s extensive aviation industry experience, chief executive officer experience, as well as other board experience make him well suited to serve as its independent Lead Director.

The Board of Directors believes that the leadership structure with a strong independent Lead Director on the one hand, and knowledgeable and experienced Executive Chairman of the Board of Directors on the other, provides balance and is in the best interest of the Company.

Corporate Governance Guidelines

Our Board of Directors has adopted Corporate Governance Guidelines (the “Guidelines”) to assist the Board of Directors in the exercise of its duties and responsibilities and to serve the best interests of the Company and our stockholders. The Guidelines are intended to serve as a flexible framework for the conduct of the Board of Directors’ business and not as a set of legally binding obligations and are periodically reviewed by the Board Directors and amended from time to time. The Guidelines describe the Lead Director’s and the Board of Directors’ responsibilities, the qualification criteria for serving as a director, and standards for the conduct of meetings and establishing and maintaining committees. The Guidelines also confirm that the directors will have full and free access to officers and employees of the Company and have authority to retain independent advisors as necessary and appropriate in carrying out their activities. In addition, the Guidelines establish frameworks for director compensation, director orientation and continuing education, and an annual evaluation of the Board and its committees and of the Guidelines. Finally, the Guidelines charge the leadership development and compensation committee with oversight of management evaluation and succession, and detail the Company’s policies regarding confidentiality and communications between our Board of Directors and the press and media on matters pertaining to the Company. In 2019, these Guidelines were amended to add over-boarding limits which the Company has previously complied with in practice, a requirement that a director must offer to resign if the Board has determined that an actual conflict of interest arises with respect to the director which is not waived by the Board, add emphasis that directors are subject to the Company’s Code of Business Conduct described below in the section captioned “The Board of Directors’ Role in Governance Oversight”, clarify our practices regarding communications to our Board of Directors by stockholders and other interested parties and update the Criteria for Nominations as Directors to reflect our practices relating to the consideration of director candidates, including diversity qualifications, as described below in the section captioned “Consideration of Director Candidates.” Our Guidelines are available on our website at www.airleasecorp.com.

Executive Sessions of Non-Employee Directors

As part of the Board of Directors’ regularly scheduled meetings, the non-employee directors meet in executive session. Any non-employee director can request additional executive sessions. Mr. Milton, as lead independent director, schedules and chairs the executive sessions.

Committees of the Board of Directors

Our Board of Directors has three standing committees: an audit committee, a leadership development and compensation committee and a nominating and corporate governance committee. Our Board of Directors has determined that each of these committees is composed solely of independent directors under the applicable NYSE rules. Our Board of Directors has adopted a charter for each committee that is available on our website at www.airleasecorp.com.

2020 Proxy Statement   |  Air Lease Corporation  |  3

All of the independent members of the Board of Directors are invited to attend all committee meetings and it is the practice of the independent directors to attend the meetings of committees upon which they do not serve. The independent directors believe that their attendance at these meetings enhances their understanding of the business and permits them to spend more time on issues at the meetings of the full Board of Directors.

Audit Committee

Our audit committee consists of Messrs. Hart, Milton and Saines. Mr. Hart is the Chairman of the audit committee. Our audit committee’s duties include, but are not limited to, monitoring (1) the integrity of the financial statements of the Company, (2) the independent registered public accounting firm’s qualifications and independence, (3) the performance of our internal audit function and independent registered public accounting firm, (4) our compliance with legal and regulatory requirements and (5) our overall risk profile. Our audit committee is a separately designated standing audit committee as defined in Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

Our audit committee must at all times be composed exclusively of directors who are “financially literate” as defined under the NYSE listing standards. The audit committee also must have at least one member who has past employment experience in finance or accounting, requisite professional certification in accounting or other comparable experience or background that results in the individual’s financial sophistication, and who qualifies as an “audit committee financial expert,” as defined under the rules and regulations of the Securities and Exchange Commission (“SEC”). Our Board of Directors has determined that each member of our audit committee is financially literate and is an “audit committee financial expert.” In addition to being “independent” under NYSE rules, each member of our audit committee also meets the enhanced independence requirements pursuant to Rule 10A-3(b)(i) of the Exchange Act, and the NYSE listing standards for purposes of serving on an audit committee.

Our audit committee held four meetings in 2019.

Nominating and Corporate Governance Committee

Our nominating and corporate governance committee consists of Messrs. Milton, Hart, and Larsen and Dr. Sugar. Mr. Milton is the Chairman of the nominating and corporate governance committee. Our nominating and corporate governance committee monitors the implementation of sound corporate governance principles, practices and risks and will, among other things: (1) identify individuals believed to be qualified to become a member of our Board of Directors and recommend to the Board candidates to be elected to fill vacancies and newly created directorships, (2) periodically review and recommend changes, as appropriate, to our corporate governance documents and (3) annually oversee the evaluation of our Board of Directors and its committees. Our nominating and corporate governance committee also reviews and approves all related person transactions in accordance with our policies with respect to such matters.

Our nominating and corporate governance committee held four meetings in 2019.

Compensation Committee Interlocks and Insider Participation

Each of Ms. Krongard, Ms. McCaw, Mr. Milton and Dr. Sugar served on the leadership development and compensation committee for all or a portion of 2019. None of the members of our leadership development and compensation committee has at any time been one of our officers or employees. None of our executive officers serves, or in the past year has served, as a member of the board of directors or the compensation committee of any entity that has one or more executive officers who serve on our Board of Directors or leadership development and compensation committee.

4  |  Air Lease Corporation  |  2020 Proxy Statement

Leadership Development and Compensation Committee

Our compensation committee was renamed the leadership development and compensation committee by the Board on February 13, 2020 in recognition of its broadening role regarding human capital management issues. The leadership development and compensation committee consists of Dr. Sugar, Ms. Krongard, Ms. McCaw and Mr. Milton. Dr. Sugar was the Chairman of the leadership development and compensation committee until March 17, 2020, when Ms. Krongard was designated the Chair. Our leadership development and compensation committee has overall responsibility for (1) overseeing our overall compensation structure, policies and programs, (2) reviewing and approving corporate goals and objectives relevant to the compensation of our Chief Executive Officer and Executive Chairman, reviewing the performance of each such individual in light of those goals and objectives and recommending to the independent directors of the Board the compensation level for each such individual based on this evaluation, (3) reviewing and approving corporate goals and objectives relevant to the compensation of our other NEOs, reviewing the performance of each such individual in light of those goals and objectives and determining the compensation level for each such individual based on this evaluation and the recommendation of our Chief Executive Officer and/or Executive Chairman, (4) reviewing and evaluating the Company’s programs and practices related to leadership development and human capital management, including periodically reviewing succession plans relating to positions held by executive officers and making recommendations to the Board regarding the selection of individuals to fill these positions, (5) at least annually reviewing the compensation (both cash and equity based compensation) of non-employee directors for service on the Board and its committees and recommending any changes to the Board for approval, (6) broadly overseeing matters relating to the attraction, motivation, development and retention of employees and (7) reviewing the risk exposure related to the areas of its responsibility.

In fulfilling its responsibilities, the leadership development and compensation committee may delegate to management or to a subcommittee of the leadership development and compensation committee. The committee has delegated to the Company’s Executive Chairman and the Chief Executive Officer, each of whom is a member of the Board of Directors, the authority to make RSU grants in 2020 to other officers and employees on the same terms as the executive officers, subject to an aggregate number of RSUs approved by the leadership development and compensation committee.

The leadership development and compensation committee also oversees preparation of the compensation discussion and analysis to be included in our annual proxy statement, recommends to the Board of Directors whether to so include the compensation discussion and analysis and provides an accompanying report to be included in our annual proxy statement. The committee also considers the results of the most recent stockholder advisory vote on executive compensation and to the extent the committee determines it appropriate to do so, takes such results into consideration in connection with its review and approval of executive officer compensation.

The leadership development and compensation committee has engaged Exequity LLP (“Exequity”), a nationally recognized independent compensation consultant, to provide advice with respect to compensation decisions for the non-employee directors of our Board of Directors and our executive officers.

Each member of our leadership development and compensation committee qualifies as a “non-employee director” under SEC rules and as an “outside director” under Section 162(m) of the Internal Revenue Code (the “Code”) for purposes of serving on a compensation committee. Our Board of Directors has also determined that each member of the leadership development and compensation committee satisfies the additional independence requirements specific to compensation committee membership under the NYSE listing standards. In making this determination, the Board of Directors considered whether the director has a relationship with the Company that is material to the director’s ability to be independent from management in connection with the duties of a member of the leadership development and compensation committee.

2020 Proxy Statement   |  Air Lease Corporation  |  5

Our leadership development and compensation committee held five meetings in 2019.

The Board and Committee Annual Self-Evaluation

To ensure that the Board of Directors and each Board committee functions effectively, the nominating and corporate governance committee and the Board of Directors annually conducts a self-evaluation to identify and assess areas for improvement. The written assessment focuses on the Board composition and its role, the operation of the Board, the Board’s processes relating to the Company’s strategy, financial position and corporate governance and the function and effectiveness of the Board committees. The independent Lead Director leads the evaluation process which includes collecting the assessment feedback and conducting a one-on-one conversation with each director. The Lead Director discusses the results of the evaluations and feedback received with the non-employee directors in executive session at its February meeting each year, then shares the results with the employee directors and, as necessary, the Board implements resulting recommendations.

Consideration of Director Candidates

Our nominating and corporate governance committee is responsible for identifying and evaluating director candidates based on the perceived needs of the Board of Directors at the time. When identifying and evaluating candidates for nomination as new directors, the Board will consider candidates with diverse backgrounds in terms of knowledge, experience, skills, and other characteristics, in particular, gender, ethnic and geographic diversity. The Board of Directors is committed to identifying candidates with gender, ethnic and geographic diversity and is committed to meeting the requirements under a law in California that the Company have three female directors by December 31, 2021, to continue to diversify our Board of Directors. We now have two female directors with the appointment of Ms. McCaw to the Board in November 2019.

Diversity also may encompass a candidate’s educational and professional history, community or public service, expertise or knowledge base and certain unique personal characteristics. The nominating and corporate governance committee does not have a formal policy specifying how diversity of background and personal experience should be applied in identifying or evaluating director candidates, and a candidate’s background and personal experience, while important, does not necessarily outweigh other attributes or factors the nominating and corporate governance committee considers in evaluating candidates.

Among other criteria that the nominating and corporate governance committee may consider include the director candidate’s ability to faithfully represent the interests of our stockholders; the candidate’s integrity, judgment and independence of thought; an absence of conflicting time commitments; financial literacy; leadership experience; a fit of abilities and personality that helps build an effective, collegial and responsive Board of Directors; a commitment to understand the Company and its industry; and an ability to exercise sound judgments in matters that relate to the current and long-term objectives of the Company and to contribute positively to the decision-making process.

Our nominating and corporate governance committee has not retained professional search firms to assist it in recruiting potential director candidates. Ms. McCaw, who joined our Board in November 2019, was recommended for consideration to the nominating and corporate governance committee by the Executive Chairman of the Board. Each member of the nominating and corporate governance committee and each of the other members of the Board of Directors separately interviewed Ms. McCaw and her appointment was unanimously approved.

6  |  Air Lease Corporation  |  2020 Proxy Statement

Any stockholder may recommend a director candidate for our nominating and corporate governance committee to consider by submitting the candidate’s name and qualifications to us in care of the Secretary at the address for our principal executive office listed on the cover page of this Proxy Statement. Director candidates recommended by a stockholder are considered in the same manner as any other candidates, although the nominating and corporate governance committee may prefer candidates who are personally known to the existing directors and whose reputations are highly regarded.

Stockholders of record seeking to nominate candidates for election as directors at our annual meeting of stockholders (as opposed to making a recommendation to the nominating and corporate governance committee as described above) or to bring other business before our annual meeting of stockholders, may do so by providing timely notice of their intent in writing by the deadlines specified in our Fourth Amended and Restated Bylaws (“Bylaws”) For more information, see the section below titled Stockholder Proposals and Director Nominations for our 2021 Annual Meeting of Stockholders.

Communications with the Board of Directors

Stockholders and any other interested parties who wish to communicate with the Board of Directors or an individual director, including our independent Lead Director or our independent directors as a group, or any Board committee or any chairperson of any Board committee, by either name or title, may send written communications care of the Corporate Secretary of the Company (the “Secretary”) at the address for our principal executive office listed on the cover page of this Proxy Statement. All such communications will be opened by the Secretary or his or her designee for the sole purpose of determining whether the contents represent a message to the Company’s directors. The Secretary will forward copies of all correspondence that, in the opinion of the Secretary, deals with the functions of the Board or its committees or that he or she otherwise determines requires the attention of any member, group or committee of the Board. The Secretary will not forward junk mail, job inquiries, business solicitations, offensive or otherwise inappropriate materials.

2020 Proxy Statement   |  Air Lease Corporation  |  7

The Board of Directors’ Role in Risk Oversight

The Board of Directors has delegated to the audit committee primary responsibility for risk oversight. In accordance with its charter, the audit committee is responsible for monitoring the Company’s policies and practices with respect to risk assessment and risk management. The audit committee periodically meets with our senior executives to discuss, among other things, material risks to our business. The audit committee also periodically meets with representatives of our independent registered public accounting firm. The Chair of the audit committee reports to the full Board of Directors regarding material risks as deemed appropriate.

The leadership development and compensation committee provides oversight with respect to risks that may arise from our compensation arrangements and policies. This is accomplished on an ongoing basis through the committee’s review and approval of specific arrangements and policies to ensure that they are consistent with our overall compensation philosophy and our business goals. The leadership development and compensation committee periodically discusses any risk-related concerns with senior management and with its independent compensation consultant. The Chair of the committee will report to the full Board of Directors regarding any material risks as deemed appropriate. In view of this oversight and based on our ongoing assessment, we do not believe that our present employee compensation arrangements, plans, programs or policies are likely to have a material adverse effect on the Company.

The Board of Directors provides oversight of the risks related to environmental, social and governance practices that are not addressed by the audit and leadership development and compensation committees, including environmental risks.

The Board of Directors believes that its governance structure supports the Board’s role in risk oversight. Independent directors chair each of the Board committees responsible for risk oversight. The Company has an independent Lead Director who facilitates communication between management and directors, and all directors are involved in the review of key enterprise risks.

The Board of Directors’ Role in Governance Oversight

The Board of Directors’ role in governance oversight is embedded in a broad range of its activities. Throughout this proxy statement, we highlight our governance practices, including the evolution of many of these practices. The Board of Directors regularly reviews developing governance practices and actively considers enhancements to our governance practices. It also exercises increased oversight as appropriate. For example, over the last two years, the Board of Directors has increased its oversight of the Company’s cybersecurity program. The audit committee has led the oversight of cybersecurity programs, with participation of other directors not on the committee.

Our Code of Business Conduct discussed below is a pillar of the Company’s governance program.

Code of Business Conduct and Ethics

Our Board of Directors has adopted a Code of Business Conduct and Ethics that applies to all of our directors, employees and officers. Among other things, the Code of Business Conduct and Ethics is

8  |  Air Lease Corporation  |  2020 Proxy Statement

intended to ensure fair and accurate financial reporting, to promote ethical conduct and compliance with applicable laws and regulations, to provide guidance with respect to the handling of ethical issues, to foster a culture of honesty and accountability and to deter wrongdoing. It also requires disclosure to us of any situation, transaction or relationship that may give rise to any actual or potential conflict of interest. Such conflicts must be avoided unless approved by our nominating and corporate governance committee. The Code of Business Conduct and Ethics prohibits our employees, officers and directors from taking, or directing a third party to take, a business opportunity that is discovered through the use of our property. A copy of our Code of Business Conduct and Ethics is available on our website at www.airleasecorp.com.

The Board of Directors’ Role in Leadership Development and Succession Planning

The Company’s leadership is comprised of a small number of talented individuals, with extensive industry experience, capable of managing a capital-intensive business responsibly to drive our profitability and growth. At the end of 2019, we had total assets of $21.7 billion and we had 117 employees. Our Board of Directors recognizes that the Company’s human capital management is critical to our success and is actively engaged on overseeing it.

The Board of Directors and the leadership development and compensation committee regularly engage with senior management, including human resources, on a broad range of human capital management matters. Engagement is focused on our culture, succession planning, compensation (including pay equity), benefits, talent development, talent recruiting and retention, and diversity and inclusion.

In recognition of its broadening role regarding human capital management issues, our compensation committee was renamed the leadership development and compensation committee by the Board on February 13, 2020. As part of its mandate, the leadership development and compensation committee is actively reviewing and evaluating the Company’s programs and practices related to leadership development and human capital management, including periodically reviewing succession plans relating to positions held by executive officers and making recommendations to the Board regarding the selection of individuals to fill these positions.

Annually, our Chief Executive Officer and Executive Chairman report to the leadership development and compensation committee on succession planning for other senior executive positions. Our Board of Directors also maintains an emergency Chief Executive Officer succession plan which will become effective in the event our Chief Executive Officer becomes unable to perform his duties in order to minimize potential disruption to our business and operations.

The Board of Directors’ Role in Environmental Oversight

Since our inception 10 years ago, the Company’s strategy has been to invest in the most modern, fuel-efficient, new technology aircraft. By focusing our purchases on these priorities, we are aligned with our airline customers’ need to reduce fuel consumption, emissions and noise. We regularly consult with our suppliers, including Airbus and Boeing and the major aircraft engine manufacturers, to develop the next generation aircraft that reduces fuel consumption, emissions and noise.

Understandably, environmental sustainability is an increasing focus of the investor community and our stockholders. In response to our stockholder discussions, we have introduced additional information on our website to make information about our commitment to environmental responsibility more accessible. We also are working to enhance our website disclosure related to environmental sustainability.

2020 Proxy Statement   |  Air Lease Corporation  |  9

Our Board of Directors is actively overseeing the Company’s risk and the opportunities of climate-related risks. While these risks and opportunities have been regularly reviewed and discussed at Board meetings, the frequency of such review has increased and is now addressed at every quarterly Board meeting, with a focused review at our annual Board of Directors strategy session.

John Plueger, our Chief Executive Officer, leads our environmental sustainability efforts, working collaboratively with key functions within the Company on these issues. He, as well as the senior-level executives, engaged with our suppliers and customers, assesses and manages our climate-related risks. Our team also participates in industry events to highlight the importance of the aviation industry’s sustainability efforts and need to improve. Our CEO reports to the Board of Directors on these matters.

There has been no change in the above fees since 2012.

As a matter of policy, each director could elect to have his or her retainer paid in cash or shares of our Class A Common Stock, or a combination thereof.

A non-employee director will receive a meeting fee of $1,500 per meeting (i) if he or she attends a number of Board meetings in excess of the number of scheduled meetings plus two additional Board meetings during the applicable calendar year or (ii) if he or she attends during the applicable year a number of meetings of a committee on which he or she serves, in excess of the number of scheduled meetings plus two additional meetings of that committee for that year. No fees for attending additional meetings were paid in 2019.

Non-employee directors may be paid a per diem fee of $2,500 for non-ordinary course Board or committee activity (excluding any educational events) subject to the approval of the Board, the Chairman of the Board or the Lead Director of the Board. No per diem fees were paid in 2019.

Equity Awards

Each non-employee director who joins our Board of Directors receives an initial grant of RSUs to be settled in shares of our Class A Common Stock (“Initial Director Grant”) with an aggregate value of $180,000. Thereafter, each year our non-employee directors receive an annual RSU award to be settled in shares of Class A Common Stock (the “Annual Director Grant”) with an aggregate value of $130,000. There has been no change in the dollar value of the equity awards since 2014 other than an increase in aggregate value of the Annual Director Grant from $120,000 to $130,000 as of May 8, 2019.

The value of all grants of RSUs is based on the closing price of our Class A Common Stock on the date of grant. All RSUs awarded to our non-employee directors vest in full on the first anniversary of the grant date, and if the Board of Directors service of such a director terminates for any reason, other than following a change in control, the RSUs will vest on a daily prorated basis according to the number of days between the grant date and the termination of service, divided by 365. If the service terminates following a change in control, the RSUs will vest in full. The Initial Director Grants and the Annual Director Grants are made pursuant to the Air Lease Corporation 2014 Equity Incentive Plan or any successor plan.

2020 Proxy Statement   |  Air Lease Corporation  |  11

Each director may annually elect to defer the receipt of his or her Annual Director Grant shares beyond the one-year vesting period. Directors may elect to defer his or her shares until separation from service or alternatively, may elect a deferral period of five years or ten years from the date of grant, provided that shares will be distributed upon a separation from service, a change of control or at death, if earlier than the elected deferral date. Deferred RSUs receive dividend equivalents which are reinvested in additional RSUs based on the market price of the Company’s Class A Common Stock on the date the dividends are paid.

On May 8, 2019, each non-employee director received an Annual Director Grant. On November 19, 2019, Ms. McCaw received her Initial Director Grant.

Expense Reimbursement/Other Arrangements

We reimbursed directors for travel and lodging expenses incurred in connection with their attendance at meetings and other expenses incurred in connection with their service to the Company. We also have entered into agreements with each of our non-employee directors to provide them with indemnification and advancement of expenses to supplement that provided under our certificate of incorporation and bylaws, subject to certain requirements and limitations.

Director Compensation Summary

The following table sets forth compensation paid to or earned by the individuals who served as non-employee directors of our Company during 2019.

The dollar amounts shown for these stock awards reflect $38.34 per share for each director who received a grant on May 8, 2019 and $45.11 for the grant to Ms. McCaw who received a grant on November 19, 2019, which in each case is the grant date fair value of one share of Class A Common Stock computed in accordance with GAAP. Each RSU represents a contingent right to receive one share of our Class A Common Stock.

12  |  Air Lease Corporation  |  2020 Proxy Statement

Director Stock Ownership Guidelines

Our Board of Directors has adopted stock ownership guidelines for all non-employee directors. In 2019, the Board of Directors increased the multiple of the annual retainer from 3x to 5x. Each non-employee director has five years from the time he or she becomes subject to these guidelines to achieve ownership of Class A Common Stock equivalents with an aggregate market value equal to three times the amount of the then current annual cash retainer fee for service on our Board of Directors. For a non-employee director, Class A Common Stock equivalents are shares of Class A Common Stock personally owned by the director, shares of Class A Common Stock underlying vested RSUs awarded to a director and shares of Class A Common Stock underlying unvested RSUs awarded to a director that are subject to time vesting only. All directors, except Ms. McCaw who joined the Board of Directors in November 2019, have met or exceeded the guidelines as set forth in the table below.

2020 Proxy Statement   |  Air Lease Corporation  |  13

Proposal 1: Election of Directors

At the Annual Meeting, the Board of Directors is recommending to stockholders that Mr. Matthew J. Hart, Ms. Cheryl Gordon Krongard, Mr. Marshall O. Larsen, Ms. Susan McCaw, Mr. Robert A. Milton, Mr. John L. Plueger, Mr. Ian M. Saines, and Mr. Steven F. Udvar-Házy each be elected as a director to serve for a one-year term ending at the 2021 annual meeting of stockholders and until their respective successors are duly elected and qualified or until his or her earlier resignation or removal. Dr. Sugar will not stand for re-election at the Annual Meeting but will continue to serve as a member of the Board until the date of the Annual Meeting. As a result, the Board of Directors has approved setting the size of the Board at eight directors, effective upon the commencement of the Annual Meeting and proxies cannot be voted for a greater number of persons than the number of nominees named below.

Each of the nominees named below is currently a director and was elected at the annual meeting of stockholders held on May 8, 2019 (other than Ms. McCaw who the Board appointed to the Board of Directors on November 19, 2019). No arrangement or undertaking exists between any nominee and any other person or persons pursuant to which any nominee was or is to be selected as a director or nominee, and there are no family relationships among any of our directors or executive officers. Each nominee has consented to be nominated and has agreed to serve as a director if elected. Should any of these nominees become unable or unwilling to serve as a director prior to the Annual Meeting, the proxies for the Annual Meeting will, unless otherwise directed, vote for the election of such other individual as the Board of Directors may recommend, unless the Board of Directors in its discretion reduces the number of directors. As of the date of this Proxy Statement, the Board of Directors has no reason to believe that any of the director nominees will be unable or unwilling to stand as a nominee or to serve as a director if elected.

Under our Bylaws, a director nominee will be elected to the Board of Directors by a majority of the votes cast, meaning the votes cast “FOR” such nominee’s election must exceed the votes cast “AGAINST” such nominee’s election at the Annual Meeting. Abstentions and broker non-votes will have no effect on the outcome of the director election because they are not treated as votes cast.

14  |  Air Lease Corporation  |  2020 Proxy Statement

A summary of each nominee’s principal occupation, recent professional experience, directorships at other public companies for at least the past five years, and certain other qualifications, is provided below:

Board Committees

Other Current Public Company Directorships

Mr. Hart served as President and Chief Operating Officer of Hilton Hotels Corporation, a global hospitality company, from May 2004 until the buyout of Hilton by a private equity firm in October 2007. Mr. Hart also served as Executive Vice President and Chief Financial Officer of Hilton from 1996 to 2004. Prior to joining Hilton, Mr. Hart served as the Senior Vice President and Treasurer of The Walt Disney Company and Executive Vice President and Chief Financial Officer for Host Marriott Corp. He was a director of US Airways Group, Inc. from 2006 until its December 2013 merger with American Airlines Group Inc. and of B. Riley Financial, Inc. from July 2009 until October 2015.

Qualifications:

Mr. Hart possesses significant executive experience in the hotel industry and currently serves on the board of directors of a major U.S. airline. Mr. Hart provides our Board of Directors with an important combination of management, airline industry and financial expertise. His past experience as the chief financial officer of two Fortune 500 companies, and his current service on the audit committees of two other public companies, make him instrumental in helping our Board of Directors implement business and financial strategy.

Board Committee

Other Current Public Company Directorships

Ms. Krongard is engaged in private investment activities. Ms. Krongard was a senior partner of Apollo Management, L.P., a private investment company, from January 2002 to December 2004. From 1994 to 2000, she served as the Chief Executive Officer of Rothschild Asset Management and as Senior Managing Director for Rothschild North America. Additionally, she served as a director of Rothschild North America, Rothschild Asset Management, Rothschild Asset Management BV, and Rothschild Realty Inc. and as Managing Member of Rothschild Recovery Fund. Ms. Krongard also served as a director of US Airways Group, Inc. from 2003 until its December 2013 merger with American Airlines Group Inc. and as a director of Legg Mason, Inc. from 2006 until July 2017. Ms. Krongard was elected a lifetime governor of the Iowa State University Foundation in 1997 and has served as Chairperson of its Investment Committee. She also is a member of the Deans Advisory Council, Iowa State University College of Business.

Qualifications:

Ms. Krongard brings substantial asset management expertise and leadership experience serving as a senior executive at large, complex asset management organizations. Ms. Krongard also has significant compensation, finance, and corporate governance experience acquired through her service on the boards and committees of other publicly traded companies. Her strategic planning experience and airline experience gained as a director of a public company is a key resource to our Board of Directors for financial investments and business strategy.

16  |  Air Lease Corporation  |  2020 Proxy Statement

Board Committee

Other Current Public Company Directorships

Mr. Larsen served as Chairman, President and Chief Executive Officer of Goodrich Corporation, a supplier of systems and services to the aerospace and defense industry, from 2003 until his retirement in July 2012 when the company was acquired by United Technologies Corporation. He was elected as President and Chief Operating Officer of Goodrich in February 2002, and as a director in April 2002. From 1995 through January 2002, Mr. Larsen served as Executive Vice President of Goodrich and President and Chief Operating Officer of Goodrich Aerospace division of Goodrich. Mr. Larsen joined Goodrich in 1977. Mr. Larsen served as a director of Lowe’s Companies, Inc. from 2004 until his retirement in May 2019. Mr. Larsen is a former director of the Federal Reserve Bank of Richmond and former Chairman of the U.S. Aerospace Industries Association. He is active in numerous community activities and is a member of the Krannert School of Management Advisory Board, Purdue University.

Qualifications:

Mr. Larsen brings substantial business and leadership experience as the chairman and chief executive officer of a publicly-traded company for nine years including insights in governance, regulatory and management issues facing public companies. His in-depth knowledge of the aerospace industry and the conditions that affect the industry significantly benefits the discussions of our Board of Directors.

Board Committees

Other Current Public Company Directorships

Ms. McCaw has served as a member of the Board of Directors since November 16, 2019. Ms. McCaw is currently the President of SRM Capital Investments, a private investment firm. Before this, Ms. McCaw served as President of COM Investments from April 2004 to June 2019 except while serving as U.S. Ambassador to the Republic of Austria from November 2005 to December 2007. Prior to April 2004, Ms. McCaw was a Principal at Robertson Stephens & Company, a San Francisco-based investment bank and an Associate in Robertson Stephens Venture Capital Group. Ms. McCaw started her career as a business analyst at McKinsey & Company in New York and Hong Kong. Ms. McCaw serves on the boards of several not-for-profits including Teach for America, the Ronald Reagan Presidential Foundation and the Stanford Institute for Economic Policy Research. She is also an Overseer at the Hoover Institution where she is vice chair of the Executive Committee. In addition, Ms. McCaw is a founding board member and board chair of the Malala Fund for Girls’ Education. Ms. McCaw also serves on the Khan Academy Global Advisory Board, the Knight-Hennessy Scholars Global Advisory Board, and Harvard Business School’s Board of Dean’s Advisors. She is Trustee Emerita of Stanford University where she chaired the Development and Globalization committees.

Qualifications:

Ms. McCaw brings deep experience and relationships in global business and capital markets to the Board of Directors through her private sector experience in investment banking and investment management, and through her public service as a former U.S. Ambassador. Ms. McCaw’s experience both as an investor and diplomat brings broad and meaningful insight to the Board of Director’s oversight of the Company’s business.

18  |  Air Lease Corporation  |  2020 Proxy Statement

Board Committees

Other Current Public Company Directorships

Mr. Milton was the Chairman and Chief Executive Officer of ACE Aviation Holdings, Inc., a holding company for Air Canada and other aviation interests (“ACE”) from 2004 until June 2012. He also was the President of ACE from 2004 until 2011. Mr. Milton was also the Chairman of Air Canada from 2004 until 2007. He held the position of President and Chief Executive Officer of Air Canada from August 1999 until December 2004. Mr. Milton is a director of Cathay Pacific Airways Limited. Mr. Milton is a former director of United Continental Holdings, Inc. and of AirAsia Berhad. Mr. Milton is a trustee of the Georgia Tech Foundation, a Director (Emeritus) of the Smithsonian Air and Space Museum and served as Chair of the International Air Transport Association’s Board of Governors from 2005 to 2006.

Qualifications:

Mr. Milton’s extensive experience in the aviation industry, including his many years with Air Canada, his past service on the board of directors of several airlines and current service on the board of directors of an airline based in Asia, provides our Board of Directors with deep industry experience. Our Board of Directors has benefited from Mr. Milton’s many relationships in the aircraft manufacturing, aircraft leasing and airline industries. Mr. Milton’s management experience and understanding of the aircraft leasing industry make him an ideal choice to act as our lead independent director.

2020 Proxy Statement   |  Air Lease Corporation  |  19

Other Current Public Company Directorships

Mr. Plueger, who became our Chief Executive Officer and President in July 2016, had served as our President and Chief Operating Officer since March 2010. Mr. Plueger has more than 33 years of aviation industry and aircraft leasing experience, 23 of which were with International Lease Finance Corporation (“ILFC”) where he served as acting Chief Executive Officer from February 2010 to March 2010, as President and Chief Operating Officer from 2002 to February 2010 and on its board of directors from 2002 to 2010. Mr. Plueger’s professional experience also includes testifying before the U.S. House of Representatives as an aircraft leasing industry expert witness as well as responding to European Commission formal inquiries concerning aerospace industry related mergers and acquisitions. Mr. Plueger is a Certified Public Accountant and is an FAA Airline Transport Pilot with type ratings on multiple jet aircraft and single/multi engine and instrument instructor ratings. Mr. Plueger is a member of the Pepperdine University Board of Regents and a director (Emeritus) of the Smithsonian National Air and Space Museum.

Qualifications:

Mr. Plueger has more than 33 years of aviation industry and aircraft leasing experience, providing our Board of Directors with an in-depth understanding of our business. His many years of business, financial, accounting, managerial and executive experience in our industry make him an invaluable member of our Board of Directors.

20  |  Air Lease Corporation  |  2020 Proxy Statement

Board Committee

Other Current Public Company Directorships

Mr. Saines is engaged in private investment activities. He was the Chief Executive, Funds Management of Challenger Limited, an Australian investment management firm from March 2015 to November 2019. From December 2013 to March 2015 he was engaged in private investment activities. From December 2008 to December 2013, Mr. Saines was employed by Commonwealth Bank of Australia in the role of Group Executive of the Institutional Banking and Markets Division. Prior to joining Commonwealth Bank of Australia in May 2004, Mr. Saines was a Management Committee member of Zurich Capital Markets Asia, the investment banking arm of the Zurich Financial Services Group. He previously held various senior roles with Bankers Trust Australia Limited and was also employed by the Reserve Bank of Australia. He is currently a director of the American Australian Association Limited. Mr. Saines is a Fellow of the Australian Institute of Company Directors (FAICD).

Qualifications:

Mr. Saines brings to our Board of Directors a wealth of experience in investment and commercial banking and deep knowledge of financial risk management. He provides our Board of Directors with key insights with respect to financial products, the financial markets, capital raising activities and the management of a large, complex business.

Other Public Company Directorships

Mr. Udvar-Házy, who was appointed our Executive Chairman of the Board of Directors in July 2016, had served as our Chairman and Chief Executive Officer since our launch in February 2010. In 1973, Mr. Udvar-Házy co-founded the aircraft leasing business that became ILFC and from 1973 to February 2010 served as Chairman and Chief Executive Officer of ILFC. ILFC became a subsidiary of American International Group, Inc. in 1990. Mr. Udvar-Házy is an FAA Airline Transport Pilot with type ratings on multiple jet aircraft and has over 40 years of experience flying jet aircraft.

Qualifications:

Mr. Udvar-Házy brings extensive industry, managerial and leadership experience to our Board of Directors. With more than 40 years of aviation industry experience, Mr. Udvar-Házy provides our Board of Directors with a critical understanding and appreciation of our business and the know-how to craft and execute on our business and strategic plans. He is the founder, and a substantial stockholder, of our Company.

22  |  Air Lease Corporation  |  2020 Proxy Statement

Proposal 2: Ratification of Appointment of Independent Registered Public Accounting Firm

Our audit committee has appointed KPMG LLP (“KPMG”) as our independent registered public accounting firm to audit our financial statements for 2020. During 2019, KPMG served as our independent public accounting firm and provided certain other audit-related services. Representatives of KPMG are expected to attend the Annual Meeting, be available to respond to appropriate questions and, if they desire, make a statement.

This is a non-binding vote. If KPMG’s appointment is not ratified, the audit committee will reconsider whether to retain KPMG, but still may retain KPMG. Even if the appointment is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be appropriate.

Approval of the ratification of KPMG as our independent registered public accounting firm for 2020 requires the affirmative vote of a majority of shares of Class A Common Stock present or represented, and entitled to vote on the proposal, at the Annual Meeting. Abstentions will have the same effect as a vote “AGAINST” the proposal.

2020 Proxy Statement   |  Air Lease Corporation  |  23

Proposal 3: Advisory Vote to Approve Named Executive Officer Compensation

We are seeking an advisory vote from our stockholders to approve our named executive officer compensation as disclosed in the section titled Executive Compensation. Consistent with the recommendation of the Board and the majority of votes cast at the 2018 annual meeting of stockholders, the Company has currently determined that advisory votes to approve the compensation of the Company’s named executive officers will take place every year. Our named executive officers include Mr. John Plueger, our Chief Executive Officer and President and Mr. Udvar-Házy, our Executive Chairman of the Board of Directors and the three other executive officers named in the tables that appear in the Executive Compensation section.

Our executive compensation program is designed to attract, motivate and retain the most talented individuals in the aircraft leasing business and to create long-term value for our stockholders. The leadership development and compensation committee and our Board of Directors believe that the program has been successful in accomplishing these objectives as reflected by our strong financial performance in 2019.

The combination of a competitive base salary and bonus, and the potential for even greater rewards as a stockholder, has helped us assemble and retain a formidable management team and focus them on growing the value of the Company over the long term. We believe having a small, but highly experienced and motivated senior management team is essential to the success of the Company and provides us with an important competitive advantage.

Stockholders are urged to read the section titled Executive Compensation—Compensation Discussion and Analysis, which contains a detailed description of how our compensation program implements our compensation philosophy.

We are asking our stockholders to vote FOR the following advisory resolution:

RESOLVED, that the stockholders of Air Lease Corporation approve, on an advisory basis, the compensation paid to its named executive officers, as disclosed pursuant to Item 402 of Regulation S-K under the Securities Exchange Act of 1934, as amended, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth below in the section titled Executive Compensation.

This is a non-binding vote and is being provided as required pursuant to Section 14A of the Exchange Act. The leadership development and compensation committee and our Board of Directors will continue to review the voting results in connection with their regular evaluation of our compensation program. They also will continue to consider any input from our major stockholders throughout the year in connection with their annual evaluation.

Approval of this advisory vote requires the affirmative vote of a majority of shares of Class A Common Stock present or represented, and entitled to vote on the proposal at the Annual Meeting. Abstentions will have the same effect as a vote “AGAINST” the proposal. Broker non-votes will have no effect on the outcome of the advisory vote.

24  |  Air Lease Corporation  |  2020 Proxy Statement

Dear Fellow Stockholder,

The members of the Air Lease Corporation Leadership Development and Compensation Committee remain highly focused on ensuring that our compensation program promotes the creation of stockholder value. We continue to structure the program so that approximately 70% of our executives’ target compensation is in performance-based vehicles and setting robust goals that challenge our executives to contribute to our annual and long-term objectives and reward them when those objectives are achieved.

Over the last several years, we made many changes to our compensation program, including:

We continued to make changes to our 2019 compensation programs that are reflected throughout this proxy statement. As a result of these changes, our compensation program provides for more at-risk compensation, including more compensation being delivered in equity and subject to long-term Company performance.

We received significant positive feedback regarding our compensation program, and preserved the features that resonated with investors, including:

We are committed to continuously evaluating our compensation programs, and to hearing from our stockholders as part of a regular annual outreach process. We encourage you to reach out with any questions or feedback related to our compensation program.

Sincerely,

Cheryl Gordon Krongard, Chair

Susan McCaw

Robert A. Milton

Ronald D. Sugar

Leadership Development and Compensation Committee members

2020 Proxy Statement   |  Air Lease Corporation  |  25

Compensation Discussion and Analysis (“CD&A”)

This Compensation Discussion and Analysis should be read together with the executive compensation tables that follow, which disclose the compensation awarded to, earned by or paid to our NEOs with respect to 2019.

Our Named Executive Officers

This Compensation Discussion and Analysis (“CD&A”) discusses executive compensation for the following Named Executive Officers (“NEOs”) for fiscal year 2019:

Compensation Philosophy: Pay for Performance

Our executive compensation program is designed for a company with a small number of extraordinary and talented individuals with industry experience to manage and lead a highly capital-intensive business. We do this by tying compensation to the achievement of performance goals that promote the creation of stockholder value and by designing compensation to reward and retain our high-caliber executives in a competitive market. This balancing of objectives is demonstrated by the substantial portion of our executives’ compensation that is variable and at risk based on individual and Company performance. In 2019, 70% of our CEO’s pay mix at target was at risk. Our compensation structure and pay for performance philosophy have incentivized our 117-employee team to deliver outstanding long-term performance at a very low cost to stockholders. In fact, in 2019 our entire compensation expense (for all employees) represented just 3.6% of revenues. In addition, all of our employees are eligible to receive RSUs and our employees and directors own approximately 7% of our Class A Common Stock. We believe that this significant ownership by our employees and directors also helps ensure that we are aligned with the interests of our stockholders and that our compensation program drives sustainable growth.

26  |  Air Lease Corporation  |  2020 Proxy Statement

Business Overview and Strategy

Business Overview

Air Lease Corporation is a leading aircraft leasing company that was founded by aircraft leasing industry pioneer, Steven F. Udvar-Házy. We are principally engaged in purchasing new commercial jet transport aircraft directly from the manufacturers, such as Boeing and Airbus, and leasing those aircraft to airlines throughout the world with the intention to generate attractive returns on equity. As of December 31, 2019, we had 292 aircraft in our owned operating lease portfolio, and had 413 aircraft on order and 70 aircraft purchase options with manufacturers. In addition to our leasing activities, we sell aircraft from our operating lease portfolio to third parties, including other leasing companies, financial services companies, airlines and other investors. We also provide fleet management services to investors and owners of aircraft portfolios for a management fee. Our operating performance is driven by the growth of our fleet, the terms of our leases, the interest rates on our debt, and the aggregate amount of our indebtedness, supplemented by the gains from our aircraft sales, trading and other activities and our management fees. We have relationships with over 200 airlines across 70 countries, and as of December 31, 2019, had 106 customers in 59 countries.

2020 Proxy Statement   |  Air Lease Corporation  |  27

2019 Performance Highlights

In 2019, we successfully executed our operational strategy which is designed to drive long-term stockholder value.

Highlights for the year ended December 31, 2019$21.7 billionTotal assets$2.0 billion Total revenues$29.1 billionCommitted minimum future fleet rentals788Aircraft owned, managed and on order2.41xDebt to Equity89%Order book placed through 202136.5%Pre-tax profit margin

Despite ongoing delivery delays from manufacturers, including the grounding of the Boeing 737 MAX aircraft, we had several key accomplishments this year. For the first time since our inception, total assets and total revenues exceeded $20 billion and $2 billion, respectively, at December 31, 2019. We raised over $4 billion in capital, including our first Canadian dollar bond deal, and expanded our bank facilities, ending the year with over $6 billion in liquidity. Our common stock achieved total shareholder return of 59% for the year ended December 31, 2019.

Aircraft Activity.    During the year ended December 31, 2019, we purchased and took delivery of 53 aircraft from our new order pipeline, purchased two incremental aircraft in the secondary market, sold 30 aircraft and transferred eight aircraft from our operating lease portfolio to flight equipment held for sale, ending the period with a total of 292 aircraft in our operating lease portfolio with a net book value of $18.7 billion. The weighted average lease term remaining on our operating lease portfolio was 7.2 years and the weighted average age of our fleet was 3.5 years as of December 31, 2019. Our fleet grew by 19.1% based on net book value of $18.7 billion as of December 31, 2019 compared to $15.7 billion as of December 31, 2018. In addition, we had a managed fleet of 83 aircraft as of December 31, 2019, compared to a managed fleet of 61 aircraft as of December 31, 2018. We have a globally diversified customer base comprised of 106 airlines in 59 countries. As of February 14, 2020, all aircraft in our operating lease portfolio, except for two aircraft, were subject to lease agreements.

New Order Pipeline.    During 2019, we increased our total commitments with Boeing and Airbus by a net 94 aircraft. As of December 31, 2019, we had commitments to purchase 413 aircraft from Boeing and Airbus for delivery through 2026, with an estimated aggregate commitment of $27.4 billion. We ended 2019 with $29.1 billion in committed minimum future rental payments and placed 79% of our order book on long-term leases for aircraft delivering through 2022. This includes $14.1 billion in contracted minimum rental payments on the aircraft in our existing fleet and $15.0 billion in minimum future rental payments related to aircraft which will deliver between 2020 and 2024.

28  |  Air Lease Corporation  |  2020 Proxy Statement

Aircraft Sales.    During the year ended December 31, 2019, we sold a total of 30 aircraft for proceeds of approximately $1.0 billion. In November 2019, we entered into an agreement to sell 19 aircraft through our Thunderbolt platform to investors. Our Thunderbolt platform facilitates the sale of mid-life aircraft to investors while allowing us to continue the management of these aircraft for a fee. Through this transaction, we retained a non-controlling interest of approximately 5.0% in the entity. During the year ended December 31, 2019, we completed the sales of 11 of the 19 aircraft.

Financing.    In 2019, we issued approximately $3.2 billion in senior unsecured notes bearing interest at fixed rates ranging from 2.25% to 4.25% with one note bearing interest at a floating rate of three-month LIBOR plus 0.67%, with maturities ranging from 2021 to 2029. In addition, we increased our unsecured revolving credit facility capacity to approximately $5.8 billion, representing a 27.9% increase from 2018 and extended the final maturity date to May 5, 2023 bearing interest at a floating rate of LIBOR plus 1.05%. We ended 2019 with total debt outstanding, net of discounts and issuance costs, of $13.6 billion, of which 88.4% was at a fixed rate and 96.6% of which was unsecured. As of December 31, 2019, our composite cost of funds was 3.34%.

Financial Highlights.    In 2019, total revenues increased by 20.1% to $2.0 billion, compared to 2018. The increase in our total revenues is primarily due to the $3.0 billion increase in the net book value of our operating lease portfolio and an increase in our aircraft sales, trading and other activity. During the year ended December 31, 2019, our net income available to common stockholders was $575.2 million compared to $510.8 million for the year ended December 31, 2018. Our diluted earnings per share for the full year 2019 was $5.09 compared to $4.60 for the full year 2018. The increase in net income available to common stockholders in 2019 as compared to 2018 was primarily due to the continued growth of our fleet and an increase in our aircraft sales, trading and other activity, partially offset by increases in our interest expense and selling, general and administrative expenses.

Dividend Increase.    On November 6, 2019, our Board of Directors approved an increase in our quarterly cash dividend of 15%, from $0.13 per share to $0.15 per share. This dividend paid on January 6, 2020, marked our 28^th consecutive dividend since we declared our first dividend in 2013, and our seventh dividend increase over that time.

Productivity.    As of December 31, 2019, we had 117 employees and $21.7 billion of total assets. Per employee, our revenue and net income available to common stockholders for the year ended December 31, 2019 was approximately $17.2 million and $4.9 million, respectively.

Growth and Total Return.    For the period December 31, 2016 through December 31, 2019, the compound annual growth rate for the Company is 16% for Total Assets, 12% for Total Revenues, 8% for Income before taxes, and 15% for Net Income available to common stockholders. For the year ended December 31, 2019, the Company’s common stock achieved a total stockholder return of 59%.

For a comprehensive discussion of our financial results, please review our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, which was filed with the SEC on February 14, 2020 and is available at http://www.airleasecorp.com/investors.

2020 Proxy Statement   |  Air Lease Corporation  |  29

Stockholder Outreach and Executive Compensation Program Refinements

To better understand our investors’ perspectives regarding our executive compensation program, for the last several years we have engaged in stockholder outreach. After issuing our proxy statement in March 2019, we engaged with holders of over 40% of outstanding shares (none of whom were our employees or directors) to specifically discuss our compensation philosophy and program and to listen to their feedback. We continued our outreach during 2019 and early 2020. The leadership development and compensation committee considered our stockholders’ views when making decisions about changes to our 2019 and 2020 compensation programs.

We continued to enhance our executive compensation program in response to evolving compensation practices and feedback from our stockholder engagement efforts, specifically by making the following responsive changes:

30  |  Air Lease Corporation  |  2020 Proxy Statement

2020 Proxy Statement   |  Air Lease Corporation  |  31

2019 Executive Compensation Program

The leadership development and compensation committee designed our 2019 compensation program to incentivize, reward and retain leaders who create long-term value for our stockholders. Material components of our 2019 compensation program are included in the chart below.

32  |  Air Lease Corporation  |  2020 Proxy Statement

Compensation Governance Best Practices

Another important objective of our executive compensation program is to incorporate pay and governance best practices, as highlighted below.

Stockholder Advisory Vote Approving Executive Compensation

Consistent with the recommendation of the Board and the majority of votes cast at the 2018 annual meeting of stockholders, the Company has currently determined that advisory votes to approve the executive compensation of the Company’s named executive officers will take place every year.

At our 2019 annual meeting of stockholders, the advisory vote to approve named executive officer compensation (“compensation proposal”) received the affirmative support of 96% of our stockholders represented at the meeting and entitled to vote on the matter. We believe this high degree of support on our 2019 compensation proposal demonstrates that stockholders support the recent enhancements we have made to our executive compensation program. In evaluating our executive compensation program, our leadership development and compensation committee considered the voting results for the compensation proposal, our stockholder outreach and other factors as discussed in this CD&A.

Compensation Program Overview and Objectives

Our executive compensation program is designed to attract, retain and motivate the highest caliber executives in the aircraft leasing industry by offering a comprehensive compensation program that is attractive enough to entice and retain successful senior executives. We also believe it is important that our compensation program attracts the highly talented executive who is experienced and capable of managing our aircraft fleet with a small team to help drive our profitability. At the end of 2019, we had total assets of $21.7 billion and 117 employees. We believe that the ratio of employees to total revenues compares favorably to other companies in capital-intensive businesses. In addition to managing significant assets on a per employee basis, our team has delivered outstanding long-term performance at a very low cost to stockholders. In fact, in 2019 our entire compensation expense (for all employees) represented just 3.6% of revenues.

2020 Proxy Statement   |  Air Lease Corporation  |  33

Our executive compensation program also is designed to reward our executives for contributing to the achievement of our annual and long-term objectives. We set robust goals to align performance-based compensation with the creation of long-term value for our stockholders. We also believe that ownership of our stock is critical to alignment with our stockholders and our 117 employees along with our independent directors collectively own approximately 7% of the Company.

How We Determine Compensation

Role of the leadership development and compensation committee.    The leadership development and compensation committee is composed of Dr. Sugar, Ms. Krongard, Ms. McCaw, and Mr. Milton. Dr. Sugar was the Chairman of the committee until March 17, 2020, when Ms. Krongard was named the Chair. The committee oversees the design, administration and evaluation of our overall executive compensation program. The leadership development and compensation committee reviews and approves corporate goals and objectives relevant to the compensation of the Chief Executive Officer and the Executive Chairman evaluates their performance in light of those goals and objectives and recommends to the independent directors of the Board their compensation level based on this evaluation. It also approves the total compensation for the other NEOs. Each member of the leadership development and compensation committee must be an independent, non-employee director, as those terms are defined in SEC, NYSE and Internal Revenue Service rules. Among other things, the committee will at least annually:

Role of Stockholder Input on Executive Compensation.    To better understand our investors’ perspectives regarding our executive compensation program, for the last several years we have engaged in stockholder outreach. We frequently speak with stockholders, including after issuing our proxy statement and again in the fall ahead of the leadership development and compensation committee meeting each February. That outreach and the changes made to our executive compensation program in response to that outreach are described more fully in the section titled Stockholder Outreach and Executive Compensation Program Refinements. As a result, over the last several years we made significant changes to our compensation program. In the last two years, we changed the performance metrics for our NEOs annual cash bonus; changed the structure of our Executive Chairman’s annual bonus so that any bonus earned is paid in RSUs subject to vesting; changed our Book Value RSUs to eliminate one-year performance periods and moved to a three-year performance period instead to further drive long-term sustainable book value growth; and terminated our executive officers participating in the deferred cash bonus plan. We also developed a new, more refined benchmark group and believe that our NEOs’ total direct compensation is competitively positioned at approximately the median relative to similarly situated

34  |  Air Lease Corporation  |  2020 Proxy Statement

executives at the benchmark group companies. We encourage stockholders to reach out with any questions or feedback related to our compensation program, and we are committed to hearing from our stockholders as part of our annual outreach process.

Role of Management.    Neither the Chief Executive Officer nor the Executive Chairman has any role in determining his compensation or the compensation of the other. Moreover, they are not present when his compensation is discussed and approved by the leadership development and compensation committee or the Board of Directors. The committee determines the overall compensation of our other NEOs with input from our Chief Executive Officer and Executive Chairman. None of our NEOs is present when his compensation is discussed by the leadership development and compensation committee. Our management administers all compensation and benefits programs, subject to the oversight of the leadership development and compensation committee. This delegation to management is strictly limited to implementation of the programs and does not include any discretion to make material decisions regarding the overall executive compensation program.

Role of Independent Compensation Consultant.    The leadership development and compensation committee has engaged Exequity as an independent compensation consultant to provide advice with respect to compensation decisions for our executive officers. The independent compensation consultant assists in evaluating our compensation objectives, obtaining market information, and designing various aspects of our compensation program. The independent compensation consultant attends meetings of the leadership development and compensation committee by invitation, and committee members have direct access to the independent compensation consultant without management involvement. The independent compensation consultant will also consult with our senior executives as directed by the leadership development and compensation committee. The committee has the sole authority to hire and fire the independent compensation consultant. In order to help ensure impartiality and objectivity, the leadership development and compensation committee requires that the independent compensation consultant provide services only to the committee and not to management, absent specific committee approval. In 2019, Exequity did not perform any services unrelated to its leadership development and compensation committee engagement, including any separate work for our management or employees. The independence of Exequity has been evaluated in accordance with SEC and NYSE rules, and it has been determined that its work did not raise any conflicts of interest.

Peer Group and Benchmarking

We operate in a highly-specialized industry in which most of the companies are foreign, private or are subsidiaries of other large companies. For this reason, traditional industry-specific peer group benchmarking is challenging and would produce incomparable data.

Given that we have limited direct publicly-traded peers, it is equally challenging to find relevant and directly comparable compensation benchmarking data for our industry. Nevertheless, since 2012, Exequity has collected compensation information about similarly sized U.S.-based employers for the leadership development and compensation committee’s consideration derived from the entire S&P MidCap 400 Index. This is the group against which the Company benchmarks relative total stockholder return for TSR RSU performance purposes and reflects comparably capitalized companies regardless of industry affiliation.

Before 2018, the leadership development and compensation committee considered compensation data of selected diversified financial services firms from the Diversified Financial Services Benchmark. While the data was valuable to the committee, this benchmark group was large with 40 companies and included companies not relevant to the Company’s core business. As a result, in the fall of 2017 the leadership development and compensation committee asked Exequity to work with the Company to explore developing a new custom benchmark group.

2020 Proxy Statement   |  Air Lease Corporation  |  35

In developing the new custom benchmark group in early 2018, Exequity and the Company performed a comparative top-down and bottom-up business model analysis on companies that are publicly traded in the U.S. with market capitalization between $1 billion and $10 billion at that time. That analysis compared key characteristics of the Company’s business, including exposure to real assets, dependence on a highly skilled management team, credit exposure/underwriting expertise, and significant capital expenditures, to the characteristics of traditional and alternative asset managers, specialty finance lenders, insurance companies and REITs (real estate investment trusts). The analysis included all companies within the Diversified Financial Services Benchmark. A range of REITs were included because of their exposure to real assets, income from lease revenue, highly skilled management teams, large capital bases and significant capital expenditures. The remaining firms selected represent an array of asset management and specialty finance firms which the Company believes exhibit in-depth knowledge of their asset classes akin to the Company’s expertise in managing aircraft. A separate review was done of the companies that were within the Diversified Financial Services Benchmark but would not be included in the custom benchmark group. Companies such as institutional brokerage firms, information services companies and consumer finance companies were excluded from the new benchmark group given the disparity in their business models to aircraft leasing.

For 2019, the leadership development and compensation committee’s custom benchmark group remained the same as those selected in 2018 and consisted of the following companies (the “Custom Benchmark Group”):

36  |  Air Lease Corporation  |  2020 Proxy Statement

In order to assess the Company’s compensation competitiveness compared to the Custom Benchmark Group, in the beginning of 2019, Exequity utilized comparative data disclosed in publicly available proxy statements and other documents filed with the SEC and other databases to prepare a study comparing the NEOs’ compensation to the compensation paid by the Custom Benchmark Group members to their executives. Exequity’s study generally utilized compensation data for the 2017 calendar year, as that was the most recent compensation information available at the time of the study. The total direct compensation paid to our Chief Executive Officer and our Executive Chairman approximated the median total direct compensation paid by the Custom Benchmark Group members to their similarly situated executive officers, while the total direct compensation paid to our other NEOs was either slightly above or slightly below the median total direct compensation paid by the Custom Benchmark Group members to their similarly situated executive officers. Total direct compensation for this purpose means the sum of base salary, actual bonus earned and the grant date fair value of equity awards granted for the applicable year.

For 2019 actions, the leadership development and compensation committee considered data from the S&P MidCap 400 and the Custom Benchmark Group. External compensation data is considered holistically and represents potential labor markets for top executive talent for similar companies. The committee also viewed data for Aircastle Limited, the sole aircraft leasing company where compensation data is available and a member of the Custom Benchmark Group. However, given the significant difference between our aircraft leasing business and the companies included in these data sources, our leadership development and compensation committee does not make explicit compensation decisions based on how our compensation practices compare, nor do they target compensation to a specific benchmark of this group of companies. We use this information as a starting point in our compensation review process, to supplement the collective knowledge and experience of our Board of Directors, senior executives and the compensation consultant. Our final compensation decisions continue to be based on individual performance and guided by what we consider to be the amount and form of compensation that will best enable us to attract, motivate and retain the most talented executives and to focus them on the growth and long-term success of our business.

Risk Management

We believe we have designed an executive compensation program as described below, which encourages long-term incentive goals for our NEOs and discourages executives from taking unnecessary risks that could threaten the long-term interests of our Company. We also base our executive rewards on a variety of internal performance measures (as explained below) to avoid an over reliance on any singular indicator of performance.

Compensation Program Safeguards

2020 Proxy Statement   |  Air Lease Corporation  |  37

As an additional safeguard, our Board of Directors also adopted a clawback policy relating to incentive compensation and an anti-hedging or pledging policy as described below.

We believe that the above design safeguards align our executive incentives and corresponding payouts with stockholder value creation.

Also, annually, the leadership development and compensation committee, together with its independent compensation consultant, performs a compensation risk analysis of our compensation programs. In addition, the chair of our leadership development and compensation committee reports to, and discusses compensation risk issues with, the full Board of Directors.

Stock Ownership Guidelines

We also believe that our executives’ significant equity ownership in our Company aligns their long-term interests with those of our stockholders. Our Board of Directors has adopted stock ownership guidelines for our executive officers at the level of Executive Vice President or higher. Our Executive Chairman and Chief Executive Officer are each required to own Class A Common Stock equivalents with an aggregate market value equal to six times his annual rate of salary. As shown in the table below, both Mr. Plueger and Mr. Udvar-Házy beneficially own shares of our Class A Common Stock that far exceed their ownership requirements.

Each of our other executive officers is required to own Class A Common Stock equivalents with an aggregate market value equal to at least his or her annual rate of salary. Messrs. Chen, Levy and Willis each own shares of our Class A Common Stock that exceed this requirement. In addition, our guidelines require executive officers to retain 50% of after-tax profits realized from Company equity incentive awards until ownership guidelines are met. Class A Common Stock equivalents are shares of Class A Common Stock owned personally by an executive officer and shares of Class A Common Stock underlying unvested RSUs that are subject to time-based vesting only. Executive officers have five years from the time he or she becomes subject to the guidelines to achieve the required level of ownership.

38  |  Air Lease Corporation  |  2020 Proxy Statement

Policy Prohibiting Hedging and Pledging

The Company has an anti-hedging policy applicable to our directors and all employees, including our executive officers. These individuals are prohibited from engaging in hedging transactions such as short-term or speculative transactions in the Company’s securities, including our Class A Common Stock or any preferred stock. These transactions include, but are not limited to, prepaid variable forward contracts, equity swaps, collars and exchange funds. The anti-hedging policy applies regardless of whether such Company securities (i) were granted to the director or employee as part of their compensation and (ii) are held directly or indirectly by the director or employee. Directors and executive officers may not pledge their Company securities as collateral for a loan or in similar transactions.

Clawback Policy

In February 2014, our Board of Directors adopted a clawback policy. The policy provides that we will require reimbursement of any incentive payments to an executive officer which was predicated upon achieving certain financial results that were subsequently the subject of a substantial restatement of Company financial statements filed with the SEC, if our Board of Directors determines that the executive engaged in intentional misconduct that caused or substantially caused the need for a substantial restatement of financial results and a lower payment would have been made to the executive based on the restated financial results. In each such instance, we will, to the extent practicable, seek to recover from the individual executive the amount by which the individual executive’s incentive payments for the relevant period exceeded the lower payment that would have been made based on the restated financial results.

Elements of the Executive Compensation Program

We have three primary elements of our executive compensation program: annual compensation consisting of base salary, annual performance-based incentive bonuses and long-term equity incentive awards. Their significant performance-based compensation, coupled with their significant ownership of the Company’s equity, aligns each NEO’s interests with the interests of our stockholders. In 2019, approximately 72% of our Chief Executive Officer’s total compensation paid was performance-based and not guaranteed.

Annual Compensation

Annual compensation is delivered in cash (or for Mr. Udvar-Házy, a combination of cash and RSUs) with a substantial variable portion at risk and contingent on the successful accomplishment of pre-established performance measures.

Base Salary

Base salary is the main “fixed” component of our executive compensation program, and it is aimed primarily at attracting and retaining the best possible executive talent. The relative levels of base salary for our NEOs are based on the particular responsibilities and expectations associated with each executive’s position. Another factor that we consider extremely important is the experience of each NEO in our industry. We review salaries annually and consider possible merit increases, increases in connection with promotions and changes in responsibilities and market competitive factors.

None of our NEOs are guaranteed an annual salary increase. The salaries for Messrs. Plueger and Udvar-Házy remained unchanged since 2016. For Mr. Udvar-Házy, his 2019 base salary was the only cash compensation he received in 2019, as his 2019 annual bonus was paid in RSUs that are subject to an additional two-year vesting requirement. The base salaries of the other NEOs are determined by the leadership development and compensation committee, with the input of Messrs. Plueger and Udvar-Házy taking into consideration the objectives and philosophies of our overall executive compensation program, including market information.

2020 Proxy Statement   |  Air Lease Corporation  |  39

The 2019 base salary percentage changes for our NEO’s compared to 2018 are as follows:

Performance-Based Annual Incentives

Annual performance-based incentives are earned under the terms of our Annual Cash Bonus Plan. All of the NEOs and our other officers are eligible to participate in the Annual Cash Bonus Plan. These annual performance-based bonuses are paid to drive the achievement of key business results for the year and to recognize individuals based on their contributions to those results.

Within the first 90 days of each calendar year, the leadership development and compensation committee establishes performance guidelines for bonus payments (“performance measures”). These performance measures are developed taking into account the Company’s applicable fiscal year business plan and its long-term strategy. They also take into consideration expectations regarding the probability of achieving certain performance goals and include “stretch” goals that are supported by the business plan. Performance measures are set at the beginning of the performance period. The leadership development and compensation committee retains the discretion to reduce any NEO’s incentive award otherwise becoming payable on any basis it deems appropriate (such as its assessment of the Company’s performance or the NEO’s individual performance).

The formula for determining annual performance-based bonuses at the end of the year is:

For 2019 performance, the leadership development and compensation committee measured our performance to these operating performance measures and strategic goal, using a rating scale based on expectations as follows: 0% - did not meet expectations, 80% - mostly meets expectations, 100% - meets expectations, 120% - exceeds expectations and 200% - significantly exceeds expectations. We believe our interpolation methodology aligns company performance and executive compensation for performance results between the minimum and target performance levels, and between the target and maximum performance levels.

40  |  Air Lease Corporation  |  2020 Proxy Statement

In lieu of Mr. Udvar-Házy’s cash bonus, he was granted a stock bonus award in the form of RSUs on February 13, 2020, the date the amount of his 2019 annual bonus was determined. These RSUs cliff vest on the second anniversary of the date of grant. The number of RSUs was equal to the dollar amount of his 2019 cash bonus divided by the closing price of our common stock on the date of grant. The amount of the bonus was determined under the bonus framework described above. We believe denominating our Executive Chairman’s annual bonus in stock instead of cash and effectively requiring a three-year period before payment further aligns our Executive Chairman’s compensation with stockholders’ long-term interests.

2019 Operating Performance Measures Compared to 2018.

The leadership development and compensation committee also continued its practice of establishing more rigorous goals tied to increasingly ambitious operating performance measures, when appropriate. The tables below show the 2019 goals at ‘Target’ compared to (a) 2018 Target (table 1) and (b) to 2018 Actual Performance (table 2).

Revenue and adjusted pre-tax return on common equity are metrics that used together can measure growth in our top-line performance and profitability on a year-over-year basis. Compared to actual 2018 results, we lowered our adjusted pre-tax return on common equity to 15.1%. This reduction was primarily due to an expectation that the Company would continue to operate below its long-term debt-to-equity ratio target of 2.5% and would have lower aircraft sales volumes.

The weighted earned payout of 137% reflects the Company’s strong financial performance in 2019. The key drivers of our 2019 performance were the following:

With respect to our strategic objective, the leadership development and compensation committee quantitatively, and as applicable, qualitatively assesses the Company’s performance of its strategic objective. The committee measured our performance to the strategic goal, using a rating scale versus expectations as follows: 0% - did not meet, 80% - mostly meets, 100% - meets, 120% - exceeds and 200% - significantly exceeds. If the goal meets expectations, payout is at 100% and if the goal significantly exceeds expectations, payout is at 200%. Results between the points are interpolated on a linear basis.

2019 Individual Opportunities and Performance Results.

Each NEO had the opportunity to earn his target award (a percentage of base salary) based on Company performance, as modified by an individual performance factor (determined by the leadership development and compensation committee for 2019 to be between 0% and 120%), based on the achievement relative to individual performance goals. In the case of our Executive Chairman and our Chief Executive Officer, in no event can the award be in excess of 200% of target. We believe this individual performance modifier—which includes 100% downside leverage and only 20% upside leverage—provides the leadership development and compensation committee with the ability to adjust each individual NEO’s bonus opportunity to reflect the individual’s performance during the year.

In considering the individual performance of each of the NEOs, the leadership development and compensation committee took into account, among other things, their individual contributions to our strong financial results in 2019, contributions to our longer-term growth in 2020 and beyond, and leadership within the Company, including their ability to motivate and leverage a very small team of professionals.

The leadership development and compensation committee recognized Messrs. Plueger’s and Udvar-Házy’s individual contributions in leveraging industry relationships to grow our fleet, concluding opportunistic aircraft acquisitions and sales, building our management business and developing strategic initiatives. The committee recognized Mr. Chen’s contributions in executing on key leasing deals, cultivating an increasing number of relationships within Asia and continuing to expand our presence in Asia through further leveraging our Hong Kong office. The committee also recognized Mr. Levy’s contributions to our increased leasing activities as well as his management of our airframe and engine manufacturing agreements. The committee recognized Mr. Willis’ execution of our financial plan, including facilitating highly successful financing transactions.

42  |  Air Lease Corporation  |  2020 Proxy Statement

2019 Annual Performance-Based Bonus Results

After evaluating the Company’s strong performance relative to the guidelines established at the beginning of 2019 and taking into account individual contributions in 2019, our leadership development and compensation committee awarded Messrs. Chen, Levy, and Willis annual cash performance bonuses in the amounts set forth below and the committee approved and recommended, and our independent Board of Directors approved, annual cash performance bonuses for Messrs. Udvar-Házy and Plueger in the amounts set forth below.

Long-Term Equity Incentive Awards

Philosophy of Awarding Performance-Based Equity Incentive Compensation.    Consistent with our executive compensation objectives, the leadership development and compensation committee believes that an important aspect of attracting and retaining exceptionally talented executives and aligning their interests with those of our stockholders is to provide long-term equity incentive compensation comprised of both performance-based and time-based equity awards. In determining the value of annual long-term equity grants, the leadership development and compensation committee considers the executive’s total compensation, target cash, mix of long-term and short-term compensation and internal guidelines.

On February 13, 2019, we made long-term equity incentive awards to all of our NEOs as part of our planned equity grant cycle. These long-term equity incentive awards were in the form of Book Value and TSR performance awards and Time-based RSU awards. These awards were made under our 2014 Equity Incentive Plan. All RSUs awarded in 2019 are denominated in share units, each of which is equivalent to one share of our Class A Common Stock.

Our leadership development and compensation committee established an overall value for each executive officer and applied a mix of 50% Book Value RSUs that vest based on attainment of book value goals, 25% TSR RSUs that vest based on attainment of total stockholder return goals, and 25% Time-based RSUs that vest in three equal annual installments. The weighting resulted in 75% of each executive officer’s 2019 annual award being comprised of performance-based Book Value RSUs and

2020 Proxy Statement   |  Air Lease Corporation  |  43

TSR RSUs. The leadership development and compensation committee continues to believe that a mix of both Book Value RSUs and TSR RSUs creates a balanced performance-based incentive because the RSUs provide executives with the incentive to steadily increase the book value of the Company while also seeking an overall increase in total stockholder return over a three-year period. In 2019, the committee continued to more heavily weight Book Value RSUs relative to TSR RSUs because it believed that incentivizing the executives to grow our long-term book value per share in a capital-intensive business like ours will lead to value creation for stockholders and create a mix of incentives that we believe will drive long-term performance.

The chart below shows the number of shares of Class A Common Stock underlying the 2019 long-term incentive awards at the time of grant:

Book Value RSUs.    The Book Value RSUs, which comprised 50% of the total 2019 annual award and vest on the attainment of book value goals at the end of the three-year performance period, provide the executives the incentive to increase the book value of the Company.

The degree to which the 2019 Book Value RSUs will vest will depend on whether the Company, over a three-year performance period, meets the book value performance measure. The leadership development and compensation committee reset the beginning per share book value for the 2019 Book Value RSU grants to the actual book value per share on December 31, 2018. The Company’s per share book value must increase by more than 20% from December 31, 2018 to December 31, 2021 for any of the shares to vest at the end of the three-year performance period and by 29% over the three-year performance period for the target number of Book Value RSUs to vest. The maximum number of Book Value RSUs would only be eligible to vest if we achieve a maximum per share book value growth target that is significantly higher than the threshold and target performance levels. Because the Company is a capital-intensive business (acquiring and leasing commercial aircraft), the book value, which is the Company’s assets minus its liabilities, is an important measure of the Company’s value.

TSR RSUs.    TSR RSUs comprise 25% of the 2019 annual award. The degree to which TSR RSUs vest depends on performance over a three-year measurement period. The number of shares to be received at the end of the three-year performance period, which runs from January 1, 2019 through December 31, 2021, will depend on our ranking within the S&P MidCap 400 Index as set forth in the table below. Results between the points in the table will be interpolated on a linear basis.

44  |  Air Lease Corporation  |  2020 Proxy Statement

The Company’s TSR is the change in price of a share of Class A Common Stock plus accumulated dividends over a specified period of time and is an indicator of management’s achievement of long-term growth in stockholder value. Comparing the Company’s TSR over a specified period of time to index companies’ returns over the same period of time is an objective external measure of the Company’s effectiveness in translating its results into stockholder returns. The compensation committee uses the TSR goals against the S&P MidCap 400 Index as the leadership development and compensation committee believes it represents a broad range of investment alternatives with similar market capitalization as our Company. The committee also believes that tying a portion of our executive compensation to stockholder returns measured against stockholder returns of similarly capitalized companies emphasizes our pay-for-performance philosophy. As previously discussed, we operate in a highly specialized industry with a finite number of other direct comparator companies, many of which are foreign, private or are subsidiaries of other companies. For this reason, traditional industry-specific peer group benchmarking is challenging and would produce incomparable data.

Time-Based RSUs.    The Time-based RSUs, which comprise 25% of the total 2019 annual award, provide a retention incentive and vest in three annual installments of 33% on February 20, 2020, 33% on February 20, 2021, and 34% on February 20, 2022.

Vesting of Performance Awards Previously Granted.    The Company’s December 31, 2019 per share book value was $47.40 and 34% of the February 21, 2017 Book Value RSUs vested. The underlying shares were released and issued in accordance with their terms on February 14, 2020. On February 14, 2020, 118% of TSR RSUs that were granted on February 21, 2017 were released as the Company’s percentile ranking within the S&P MidCap 400 Index at the end of the three-year performance period on December 31, 2019 was 60.4%. Our NEOs received an above-target payout of their TSR RSUs because of our strong stock performance, which we believe demonstrates the performance-based nature of our TSR RSU design.

Other Compensation

Retirement Programs.    We maintain a 401(k) savings plan for our employees and, under the terms of the plan, will make matching contributions in amounts equal to 116% of up to 6% of the contributions made by each NEO.

Benefits and Perquisites.    Our NEOs generally receive the same healthcare benefits as our other employees. We pay Mr. Plueger’s premiums for a $2.0 million term life insurance policy payable to his beneficiaries and we pay Mr. Udvar-Házy’s premiums for a $5.0 million term life insurance policy payable to his beneficiaries. In addition, we pay the premiums for Messrs. Plueger, Udvar-Házy, Chen, Levy and Willis under our group term life insurance program, in which all of our employees participate.

Overseas Housing.    In early 2019 the Company established a new office in Hong Kong. Mr. Chen is an employee of the Company and the Company’s subsidiary in Hong Kong. Because he has dual employment and spends time at the Company’s office in Los Angeles and its subsidiary’s office in Hong Kong, he maintains two residences. The Company, with the approval of the leadership development and compensation committee, pays for Mr. Chen’s housing in Hong Kong and provides Mr. Chen a tax gross-up for such amounts.

Personal Use of Company Aircraft.    The Board of Directors adopted a travel policy that requires the Chief Executive Officer and President and the Executive Chairman to use, to the maximum extent practicable, Company-owned aircraft for personal use as well as business travel. In 2019, the incremental cost of Messrs. Plueger’s and Udvar-Házy’s personal use of Company aircraft was approximately $72,527 and $68,526, respectively.

2020 Proxy Statement   |  Air Lease Corporation  |  45

Executive Severance Plan

Under the Air Lease Corporation Executive Severance Plan effective as of February 21, 2017, as amended, Company employees who are vice presidents and above, who are designated by the leadership development and compensation committee (or persons appointed by the committee) and who are not party to an individual severance agreement (“Covered Employees”) would generally be entitled to receive severance benefits under the Severance Plan. The committee has designated our executives and senior vice presidents as participants. The Executive Chairman of the Board of Directors and the Chief Executive Officer and President of the Company are not participants because they are each a party to individual severance agreements. The severance benefits are generally conditioned upon execution of a release of claims and continued compliance with non-competition, confidentiality and non-solicitation provisions as set forth in the Executive Severance Plan.

2020 Executive Compensation Program

The same key elements of our executive compensation program are applicable in 2020. As described above, in determining 2020 target compensation, the leadership development and compensation committee considered, among other things, data from the S&P MidCap 400 and the Custom Benchmark Group for 2020, and then compared the proposed 2020 compensation to 2019 target compensation for each NEO. Specifically, the committee analyzed base salary, actual bonus paid, long-term incentive and total compensation. The committee compared each element of the Company’s compensation and total compensation to that of the Custom Benchmark Group for 2020 and the S&P MidCap 400 relative to the 25^th, 50^th, and 75^th percentile. The leadership development and compensation committee also reviewed the mix of pay and compared that to the Custom Benchmark Group for 2020 and S&P MidCap 400. Consideration of this analysis was critical to the committee’s 2020 actions.

Annual Compensation

Base Salary.    The 2020 base salaries for Messrs. Plueger, Udvar-Házy, Chen and Levy did not change. The 2020 base salary for Mr. Willis increased from $650,000 to $670,000. In determining our NEO’s base salaries, the leadership development and compensation committee considered the market information described above.

Performance-Based Annual Incentives.    Subject to the achievement of key business results for 2020, we plan to pay performance-based annual incentives for 2020 to recognize individuals based on their contributions to those results. The leadership development and compensation committee developed the following 2020 performance-based guidelines for the payment of annual incentive awards to our NEOs:

Mr. Udvar-Házy’s 2020 annual incentive will continue to be paid in a stock bonus award in the form of RSUs that have a grant date value equal to the amount of his incentive earned for 2020 performance, and will cliff vest two years from the date of grant, which will not occur until the amount of the annual bonus is determined in 2021. As a result, Mr. Udvar-Házy’s annual incentive will not be paid in cash. We continue to believe denominating our Executive Chairman’s annual bonus in stock and effectively requiring a three-year period before payment further aligns our Executive Chairman’s compensation with stockholders’ long-term interests.

46  |  Air Lease Corporation  |  2020 Proxy Statement

Long-Term Equity Incentive Awards

We made long-term equity incentive awards to each of our NEOs (the “2020 Awards”) under the 2014 Equity Incentive Plan. These long-term equity incentive awards were in the form of Book Value and TSR RSU performance awards and Time-based RSU awards.

The leadership development and compensation committee continues to believe that a mix of Book Value RSUs and TSR RSUs with an increased weighting of Book Value RSUs relative to TSR RSUs, creates a balanced performance-based incentive. The committee believes that such a mix that incentivizes the executives to grow our long-term book value per share in a capital-intensive business like ours will lead to value creation for stockholders and create a mix of incentives that will drive long-term performance.

The Book Value RSUs, which comprise 50% of the total 2020 Award, provide the executives with the incentive to increase the book value of the Company. The degree to which the 2020 Book Value RSUs will vest will depend on whether the Company, over a three-year performance period, meets the book value performance measure. The leadership development and compensation committee reset the beginning per share book value for the 2020 Book Value RSUs grants to the actual book value per share on December 31, 2019, so that the Company’s per share book value must increase from December 31, 2019 to December 31, 2022 for the shares to vest at the end of the three-year performance period. The 2020 Book Value RSUs cliff vest at the end of three years. Because the Company is a capital-intensive business (acquiring and leasing commercial aircraft), the book value, which is the Company’s assets minus its liabilities, is an important measure of the Company’s value.

The TSR RSUs, which comprise 25% of the total 2020 Award, provide an incentive for the executives during the same three-year performance period to seek an overall increase in TSR.

The Time-based RSUs, which comprise 25% of the total 2020 Award, provide a retention incentive and vest in three annual installments of 33%, 33%, and 34% on February 13^th in each of 2021, 2022, and 2023, respectively.

The chart below shows the number of shares of Class A Common Stock underlying the 2020 Awards at the time of grant:

Tax and Accounting Considerations

Section 162(m) of the Code generally prohibits a publicly-held company from deducting compensation paid to a current or former NEO that exceeds $1.0 million during the tax year. However, certain amounts payable to executives pursuant to written binding contracts that were in effect on November 2, 2017, including certain awards granted before November 2, 2017, that were based upon attaining pre-established performance measures that were set by the leadership development and compensation committee under a plan approved by our stockholders, may qualify for an exception to the $1.0 million deductibility limit.

2020 Proxy Statement   |  Air Lease Corporation  |  47

As one of the factors in its consideration of compensation matters, the leadership development and compensation committee notes this deductibility limitation. However, the committee has the flexibility to take any compensation-related actions that it determines are in the best interests of the Company and our stockholders, including awarding compensation that may not be deductible for tax purposes. There can be no assurance that any compensation will in fact be deductible. Section 409A of the Code imposes an excise tax on the recipient of certain non-qualified deferred compensation. The committee attempts to structure all executive compensation to comply with, or be exempt from, Section 409A.

The Company accounts for stock-based compensation in accordance with FASB ASC Topic 718, which requires the Company to recognize compensation expense for share-based payments (including stock options and other forms of equity compensation). FASB ASC Topic 718 is taken into account by the leadership development and compensation committee when determining equity-based compensation awards.

Executive Compensation Tables