Boeing Chief’s Salary Up: Boeing’s departing CEO, Dave Calhoun, saw a notable increase in his total compensation for 2023, reaching nearly $33 million. This figure marks a rise of about 45 per cent from the previous year, despite the company facing a safety crisis and a decline in stock value following an incident involving an Alaska Airlines 737 MAX 9 jet in January.
Deferred stock depreciation
The bulk of Calhoun’s compensation is tied up in deferred stock, which has depreciated in value due to the aforementioned safety concerns. Adjusted figures put his total compensation for 2023 at $24.8 million. Meanwhile, Boeing shares have experienced a substantial decline of almost 30 per cent amid ongoing quality issues and regulatory scrutiny.
Notably, there’s no mention of an exit package for Calhoun, who announced his departure from the CEO position in March 2023. In the previous year, he received a total compensation of $22.6 million.
Calhoun’s potential retirement benefits were valued at over $44 million as of the end of 2023. The production of Boeing’s 737 MAX has been affected by increased regulatory checks, allowing rival Airbus to expand its market share.
Management shake-up
In response to the crisis, Boeing has undergone significant management changes, including the departure of board chair Larry Kellner and commercial plane business head Stan Deal. Stephanie Pope has taken over Deal’s role as Chief Operating Officer.
Boeing’s new board chair, Steve Mollenkopf, assured shareholders of their commitment to addressing the company’s challenges and restoring its position in the market.
In 2023, Calhoun chose not to accept his bonus and received $5 million in pay, down from $7 million the previous year. Deal’s total compensation increased by 42% to $12.5 million, although its adjusted value is estimated at $9.7 million.
Additionally, Boeing’s board decided to reduce the value of long-term executive awards in response to the decline in the company’s stock price since the safety incident.
Safety priority shift
Moving forward, Boeing has adjusted its executive compensation policies to prioritise product safety and quality. Safety and quality metrics will now carry a higher weighting in annual incentives, reflecting the company’s renewed focus on these areas.
Boeing will also introduce new metrics for long-term incentive awards, including employee culture surveys to assess safety management. This comes after an expert panel highlighted a “disconnect” between senior management and employees regarding safety culture.
Rosanna Weaver of As You Sow, a shareholder advocacy organisation, expressed support for Boeing’s efforts to prioritise safety in its compensation policies, though she noted that such measures should have been implemented earlier.
(With Reuters Inputs)
