Chicago, Illinois – Boeing’s outgoing chief executive, Dave Calhoun, has been awarded a $32.8 million pay package, marking a 45% increase from the previous year. The aerospace company’s decision to reward Calhoun comes amidst struggles to restore confidence in its quality controls, following a series of incidents leading to a decline in their share price.
In a recent regulatory filing, Boeing disclosed that Calhoun received a significant bonus in February 2023, which elevated his total compensation beyond previous years. The package includes a potential $30 million in stock awards, in addition to his $1.4 million salary, exceeding the $22.6 million he earned in 2022. However, the stock-based compensation is contingent on the sale of shares and might be forfeited if Calhoun steps down by the end of the year, as indicated last month.
Boeing’s share price has experienced a 27% drop since the beginning of the year, impacting the overall value of the stock grants awarded to Calhoun. Despite the challenging circumstances, the company emphasized that Calhoun’s 2023 awards were structured to prioritize long-term shareholder value growth. Earlier this year, Calhoun declined a $2.8 million annual bonus intended as part of his compensation package.
The aviation giant has faced significant setbacks, notably highlighted by an unfortunate incident in January involving a Boeing 737 Max 9 aircraft during an Alaska Airlines flight. The incident triggered investigations by multiple authorities, including the US Department of Justice, the National Transportation Safety Board, and the FAA. Consequently, Boeing has had to adjust production schedules for the 737 Max series to address manufacturing defects, causing delays in deliveries and increased cash burn projections for the first quarter.
Boeing’s board stated that despite ongoing challenges, Calhoun has taken responsibility for the recent incidents, emphasizing the importance of resolving issues to restore public confidence in the company. Shareholders will have an opportunity to vote on the proposed pay award at Boeing’s upcoming annual meeting on May 17. However, last year, criticisms were raised regarding Calhoun’s compensation, citing negative total shareholder returns despite pay increases for the CEO.
Additionally, US Senator Tammy Duckworth expressed concerns about Boeing’s transparency and safety practices in a letter to the FAA, referencing a failure to inform pilots about specific aircraft features. The senator highlighted the critical need for accountability and transparency in light of Boeing’s history of concealing information related to the 737 Max series.