Boeing CEO Dave Calhoun ended the year with a huge paycheck, even though he was unable to complete his term due to the Alaska Airlines door explosion that tarnished the company’s reputation. He is planning to step down.
When Mr. Calhoun took the top job in 2020, top executives at the beleaguered aerospace giant, which was already recovering from two deadly 737 Max crashes, said Boeing’s stock price was 43. Despite the fact that the percentage is lower, you will still retire with $24 million in your pocket. Until the day he became CEO.
Calhoun’s successor could earn an additional $45.5 million if he were able to increase the company’s stock price by 37%, according to the report.
Calhoun holds 175,435 options with exercise prices lower than the company’s stock price, according to an analysis of SEC filings. According to Fortune.
Calhoun also has 107,195 options expiring in February 2031 at $258.83 per share and expiring in February 2032, said Ben Silverman, vice president of research at stock sales specialist Verity. The company holds 68,240 options at a price of $260.98 per share. analysis.
As of Tuesday, Boeing’s stock price was hovering around $188 per share.
That means Mr. Calhoun’s successor would have to turn around the company’s fortunes and boost its stock price by 37% in order to cash in the options and cash in $45.5 million.
If Calhoun’s departure is considered a retirement, he will be entitled to a $5 million dividend based on the portion of his vested restricted stock, Silverman said.
Boeing declined to comment.
When Calhoun took over as CEO in January 2020, Boeing’s stock price was about $330 per share.
Mr. Calhoun was paid $65 million in compensation from 2020 to 2022, according to the company’s annual proxy report filed with the Securities and Exchange Commission.
The company’s 2024 proxy statement has not yet been released as of Tuesday.
Mr. Calhoun’s compensation during his tenure is expected to be higher than that of Boeing’s competitors and peers, including Ford, 3M, Caterpillar and Microsoft.
According to Barron’s Magazine, CEO of Boeing peer company ‘s average compensation last year was $25 million. This is despite the fact that these companies’ stock prices have risen more than 13% annually over the past five years.
By contrast, Boeing’s stock price has fallen 50% over the past five years, or about 12% on average.
Mr. Calhoun announced Monday that he will step down at the end of the year amid a broader shake-up that includes chairman Larry Kellner and Stan Diehl.
Mr. Kellner will resign from the board in May, and Mr. Diehl, president and CEO of Boeing Commercial Airplanes, will resign effective immediately.
Steve Mollenkopf, former CEO of technology giant Qualcomm, will replace Kellner as Boeing’s new chairman of the board. He will oversee the search for Calhoun’s successor.
On January 5, the plug in the rear door of a Boeing 737 Max 9 passenger plane operated by Alaska Airlines came off during flight, prompting the FAA to ground the aircraft for several weeks.
Fighting back tears, Calhoun “admitted our mistake” in causing the explosion at 16,000 feet and forcing the plane to make an emergency landing, but he vented his frustrations over Boeing’s production problems to airline CEOs. He reportedly encouraged them to meet with the board to discuss the matter.
