Departing Boeing CEO’s pay package totalled nearly $33m in 2023
Airplane maker says much of the compensation was in deferred stock that has fallen in value since January
07 April 2024 - 15:53
by Agency Staff
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Dave Calhoun, CEO of Boeing, speaks on stage during the delivery of the final 747 jet at their plant in Everett, Washington, US, January 31 2023. Picture: REUTERS/DAVID RYDER
The 2023 pay package of Boeing’s CEO, who recently announced his departure in the midst of a safety crisis, rose about 45% to nearly $33m, the US plane maker said on Friday.
Boeing said much of CEO Dave Calhoun’s compensation was in deferred stock that had fallen in value after a January midair panel blowout.
The adjusted value of Calhoun’s total 2023 compensation was $24.8m, the company said in a regulatory filing. Boeing shares have tumbled nearly 30% in 2024 as the company wrestles with quality concerns from regulators and customers after the January 5 blowout on an Alaska Airlines 737 MAX 9 jet.
The proxy does not mention an exit package for Calhoun, who announced on March 25 that he will step down from the top job by year-end. In 2022, he received $22.6m in total compensation, according to the filing.
Calhoun’s potential retirement payouts were valued at more than $44m as of year-end 2023, the filing showed.
Production of Boeing’s strong-selling 737 MAX has slipped in recent weeks as US regulators step up factory checks and the plane maker seeks to boost quality. European rival Airbus has extended its lead in the market for single-aisle jets.
The crisis led to a broad management shake-up with Boeing board chair Larry Kellner and Stan Deal, head of the commercial planes business, also leaving. COO Stephanie Pope has replaced Deal.
The board’s new chair, Steve Mollenkopf, told shareholders in Friday’s filing: “I promise that I personally, and we as a board, will leave no stone unturned in our efforts to get this company to where it needs to be.”
Calhoun took home $5m in pay in 2023 after declining to be considered for his $2.8m bonus, compared with $7m in 2022. Earlier filings show Calhoun did not receive a bonus over the last three years.
Deal earned $2.6m in actual pay in 2023 and his total compensation jumped 42% to $12.5m, though Boeing estimates the current value at $9.7m.
Boeing’s board also decided in 2024 that the value of long-term executive officer awards would be reduced by the percentage decline in the company's stock price since the blowout and the 2024 award date.
Due to that reduction, Calhoun will receive an award of $13.25m in 2024, compared with a target of $17m. A year earlier, the award was $21.25m.
After two separate 737 MAX crashes in 2018 and 2019 that killed a combined 346 people, Boeing had revamped its executive compensation policies to emphasise product safety and quality.
In 2024, for Boeing's commercial aeroplanes, safety and quality will be assigned a weighting of 60% when deciding annual incentives, compared with a 40% weighting for financial performance.
Long-term incentive awards for Boeing's executive officers will also include new metrics, such as mandating an employee culture survey to assess safety management.
In February, an expert panel reviewing safety management found a “disconnect” between Boeing’s senior management and employees on safety culture.
Rosanna Weaver, director of wage justice and executive pay at shareholder advocacy organisation As You Sow, said Boeing was doing the right thing in rewarding safety, though such efforts should have been there “in the first place”.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Departing Boeing CEO’s pay package totalled nearly $33m in 2023
Airplane maker says much of the compensation was in deferred stock that has fallen in value since January
The 2023 pay package of Boeing’s CEO, who recently announced his departure in the midst of a safety crisis, rose about 45% to nearly $33m, the US plane maker said on Friday.
Boeing said much of CEO Dave Calhoun’s compensation was in deferred stock that had fallen in value after a January midair panel blowout.
The adjusted value of Calhoun’s total 2023 compensation was $24.8m, the company said in a regulatory filing. Boeing shares have tumbled nearly 30% in 2024 as the company wrestles with quality concerns from regulators and customers after the January 5 blowout on an Alaska Airlines 737 MAX 9 jet.
The proxy does not mention an exit package for Calhoun, who announced on March 25 that he will step down from the top job by year-end. In 2022, he received $22.6m in total compensation, according to the filing.
Calhoun’s potential retirement payouts were valued at more than $44m as of year-end 2023, the filing showed.
Production of Boeing’s strong-selling 737 MAX has slipped in recent weeks as US regulators step up factory checks and the plane maker seeks to boost quality. European rival Airbus has extended its lead in the market for single-aisle jets.
The crisis led to a broad management shake-up with Boeing board chair Larry Kellner and Stan Deal, head of the commercial planes business, also leaving. COO Stephanie Pope has replaced Deal.
The board’s new chair, Steve Mollenkopf, told shareholders in Friday’s filing: “I promise that I personally, and we as a board, will leave no stone unturned in our efforts to get this company to where it needs to be.”
Calhoun took home $5m in pay in 2023 after declining to be considered for his $2.8m bonus, compared with $7m in 2022. Earlier filings show Calhoun did not receive a bonus over the last three years.
Deal earned $2.6m in actual pay in 2023 and his total compensation jumped 42% to $12.5m, though Boeing estimates the current value at $9.7m.
Boeing’s board also decided in 2024 that the value of long-term executive officer awards would be reduced by the percentage decline in the company's stock price since the blowout and the 2024 award date.
Due to that reduction, Calhoun will receive an award of $13.25m in 2024, compared with a target of $17m. A year earlier, the award was $21.25m.
After two separate 737 MAX crashes in 2018 and 2019 that killed a combined 346 people, Boeing had revamped its executive compensation policies to emphasise product safety and quality.
In 2024, for Boeing's commercial aeroplanes, safety and quality will be assigned a weighting of 60% when deciding annual incentives, compared with a 40% weighting for financial performance.
Long-term incentive awards for Boeing's executive officers will also include new metrics, such as mandating an employee culture survey to assess safety management.
In February, an expert panel reviewing safety management found a “disconnect” between Boeing’s senior management and employees on safety culture.
Rosanna Weaver, director of wage justice and executive pay at shareholder advocacy organisation As You Sow, said Boeing was doing the right thing in rewarding safety, though such efforts should have been there “in the first place”.
Reuters
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