The 2023 pay package of Boeing’s CEO, who recently announced his resignation amid the safety crisis, has increased by about 45% to nearly $33 million, the aircraft maker announced Friday.
But Boeing said much of Chief Executive Officer Dave Calhoun’s compensation was in deferred stock, which declined in value following January’s aerial panel explosion.
The adjusted value of Mr. Calhoun’s total compensation in 2023 is $24.8 million, the company said in a regulatory filing. Boeing stock has fallen nearly 30% so far this year as the company grapples with quality concerns from regulators and customers following the Jan. 5 explosion of an Alaska Airlines 737 MAX 9 plane. are doing.
Calhoun announced on March 25 that he would step down from his top job by the end of the year. He received total compensation of $22.6 million in 2022, according to his filing.
Calhoun’s potential retirement benefits are valued at more than $44 million at the end of 2023, according to filings.
Production of Boeing’s top-selling 737 MAX has declined in recent weeks as U.S. regulators step up factory inspections and plane makers look to improve quality. Meanwhile, European rival Airbus is expanding its lead in the single-aisle aircraft market.
The crisis brought about major changes in Boeing’s overall management, including the resignation of Larry Kellner, chairman of Boeing’s board of directors, and Stan Diehl, head of the company’s commercial aircraft business. Mr. Diehl will be succeeded by Stephanie Pope, chief operating officer.
The board’s new chairman, Steve Mollenkopf, told shareholders in a Friday filing that he is “committed, personally and as a board, to doing everything in our power to lead this company to where it needs to be.” said.
Calhoun earned a $5 million salary in 2023 after refusing to consider a $2.8 million bonus, up from $7 million in 2022. Calhoun has not received a bonus in the past three years, according to previous filings.
Diehl’s actual 2023 salary was $2.6 million, increasing his total compensation by 42% to $12.5 million, but Boeing estimates his current value at $9.7 million.
Boeing’s board of directors also decided this year to reduce the value of the Long-Term Executive Award by the percentage of the decline in the company’s stock price since the crash and the award date in 2024.
With this reduction, Calhoun will receive $13.25 million in 2024, against a target of $17 million. His winnings a year ago were $21.25 million.
Following two 737 MAX crashes in 2018 and 2019 that killed a total of 346 people, Boeing has updated its compensation policy to emphasize product safety and quality when determining individual executives’ salaries and incentives. .
Long-term management incentives are tied to improved safety and quality. In 2024, safety and quality will receive 60% weight in determining annual incentives for Boeing’s commercial aircraft, while financial performance will receive 40% weight.
Long-term incentives for Boeing’s executive officers will also include new metrics, such as a mandatory employee culture survey to assess how effectively the company’s safety management system is understood and followed. .
In February, a panel of experts examining Boeing’s safety management processes found a “disconnect” between the company’s senior management and employees regarding safety culture.
Rosanna Weaver, director of pay justice and executive compensation at the shareholder advocacy group As You So, said she thinks Boeing is doing the right thing in assessing safety, but that such efforts are “It should have been there in the first place,” he said.
