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 $33 million (Ksh.3.4 billion), the U.S. plane maker said on Friday.
Boeing said much of CEO Dave Calhoun’s compensation is in deferred stock that has fallen in value following a January mid-air panel blowout.
The adjusted value of Calhoun’s total 2023 compensation is $24.8 million (Ksh.3.2 billion), the company said in a regulatory filing.Boeing shares have tumbled nearly 30% this year as the company wrestles with quality concerns from regulators and customers following the Jan. 5 blowout on an Alaska Airlines, opens new tab 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 $22.6 million (Ksh.2.9 billion) in total compensation, according to the filing.
Calhoun’s potential retirement payouts were valued at more than $44 million (Ksh.5.7 billion) as of year end 2023, the filing showed.
Production of Boeing’s strong-selling 737 MAX has slipped in recent weeks as U.S. regulators step up factory checks and the planemaker seeks to boost quality. European rival Airbus (AIR.PA), opens new tab has extended its lead in the market for single-aisle jets.
The crisis led to a broad management shakeup with Boeing board chair Larry Kellner and Stan Deal, head of the commercial planes business, also leaving. Chief Operating Officer 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 $5 million (Ksh.649.1 million) in pay in 2023 after declining to be considered for his $2.8 million (Ksh.363.5 million) bonus, compared with $7 million (Ksh.908.8 million) in 2022. Earlier filings show Calhoun did not receive a bonus over the last three years.
Deal earned $2.6 million (Ksh.337.5 million) in actual pay in 2023 and his total compensation jumped 42% to $12.5 million, although Boeing estimates the current value at $9.7 million (Ksh.1.3 billion).
Boeing’s board also decided this year 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 $13.25 million (Ksh.1.7 billion) in 2024, compared with a target of $17 million (Ksh.2.2 billion). A year earlier, the award was $21.25 million (Ksh.2.8 billion).
After two separate 737 MAX crashes in 2018 and 2019 that killed a combined 346 people, Boeing had revamped its executive compensation policies to emphasize product safety and quality.
In 2024, for Boeing’s commercial airplanes, 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 & executive pay at shareholder advocacy organization As You Sow, said she thinks Boeing is doing the right thing in rewarding safety, although such efforts should have been there “in the first place.”
