Boeing CEO’s 2023 Pay Rose 45% Before Blowout Sparked Crisis

Dave Calhoun

(Bloomberg) -- Boeing Co. Chief Executive Officer Dave Calhoun's total compensation jumped 45% to $32.8 million last year, boosted in large part by a retention bonus intended to keep him in the job through 2025 — before a dramatic aircraft accident exactly three months ago upended that plan.

Stan Deal, who ran Boeing's commercial airplane division, saw a 42% bump in total pay to $12.5 million, Boeing said Friday in a securities filing.

Both executives were caught up in sweeping leadership changes unveiled late last month as the board selected a new chairman, launched a CEO search and replaced its commercial airplane chief. Boeing's directors also took a tougher look at pay, shrinking long-term incentives granted to top managers earlier this year to reflect a more than 20% collapse in Boeing shares since the Jan. 5 accident.

“I promise that I personally, and we as a board, will leave no stone unturned in our efforts to get this company to where it needs to be,” Steve Mollenkopf, Boeing's newly installed chairman, wrote in a letter to shareholders.

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The board made several changes to more directly link pay to Boeing's safety and quality. For the commercial division, the planemaker will now track improvements in out-of-sequence manufacturing known as traveled work, an issue that contributed to the midair panel blowout of a 737 Max early this year.

And as of 2024, long-term incentive payouts for executives can be sharply cut if certain safety-related goals are not “timely completed,” including a new survey to assess Boeing's safety culture, the filing said. The bonuses are also tied to better controls and assessments of safety risks for manufacturing the 737 and other aircraft.

The recent compensation change by directors meant Calhoun's 2024 award was reduced to $13.3 million from a target of $17 million. Boeing's departing top executive told directors in February that he would decline his 2023 bonus worth an estimated $2.8 million.

Calhoun will also forfeit the remainder of last year's retention bonus if he makes good on plans to step down at the end of the year. He still received half of that grant, initially valued at about $5.3 million, in February. The payout was due to vest in equal amounts in 2024 and 2025 provided Calhoun stayed on the job.

Barring a rapid turnaround at Boeing, Calhoun will likely walk away from his five-year stint as the company's chief executive with far less than the nearly $100 million that he was initially targeted to receive, the filing showed.

Although Calhoun was awarded pay and equity-based incentives valued at $97.6 million between 2020 and 2023, his cumulative realized pay over that period was $19.7 million. That's a reflection of the company's slumping stock and long-term grants that haven't paid off due to Boeing's lackluster performance.

(Updates with details of incentive pay changes from fourth paragraph)

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