Open Editor's Digest for free
Rula Khalaf, editor of the Financial Times, picks her favorite stories in this weekly newsletter.
Boeing revealed a $32.8 million award to outgoing CEO Dave Calhoun, up 45 percent from the previous year, even as the plane maker struggles to contain a crisis of confidence in its quality controls.
In a regulatory filing on Friday, Boeing said Calhoun received a bonus in February 2023 that will boost his total salary above the level of previous years.
He received potential stock bonuses worth $30 million on top of his $1.4 million salary, bringing his total pay for the year above the $22.6 million he earned in 2022, the company said.
However, his stock-based compensation will not be realized until he sells the shares, all of which cannot be cashed out immediately. He may lose some of the lump sum if he steps down at the end of this year, as he said last month.
Boeing's stock price has fallen 27 percent since the beginning of 2024, reducing the value of the grants.
“As the company continues its efforts to restore stability and public confidence during a pivotal period of transition for Boeing, it is important to emphasize that the 2023 Calhoun Awards are designed to underscore the importance of long-term shareholder value growth,” the company said.
She added that in February this year, he rejected his scheduled annual bonus of $2.8 million.
The company has been reeling since January when a door panel exploded in the air during an Alaska Airlines flight. The accident involving the Boeing 737 MAX 9 is being investigated by the US Department of Justice, the National Transportation Safety Board and the US Federal Aviation Administration.
The company was forced to slow down production of 737 MAX aircraft as it sought to resolve manufacturing defects, and some airlines were forced to adjust their flight schedules due to delays in delivering their aircraft. Boeing warned that it would burn more money in the first quarter than previously expected due to the crisis.
The company said that while the Alaska Airlines incident “demonstrates that Boeing still has a lot of work to do, the board believes that Mr. Calhoun responded to this event in the correct manner by accepting responsibility for the incident.”
The pay award will be put to shareholders for a vote at Boeing's annual meeting, scheduled for May 17.
Calhoun's pay was already the focus of criticism last year. Corporate proxy advisor Shareholder Services said in 2023 the company increased its CEO pay despite reporting negative total shareholder returns.
“The company has underperformed during CEO Calhoun’s tenure,” ISS said last year.
Separately, US Senator Tammy Duckworth, on Thursday, directed more criticism at Boeing. In a letter to the FAA, it said Boeing's failure to tell pilots that the 737 MAX's cockpit door was supposed to open during rapid depressurization was “alarming given its history of concealing 737 MAX information from pilots.”
“This is serious, and the FAA should not view this latest omission in isolation,” she added.
