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Boeing has disclosed a $32.8mn pay award for outgoing chief executive Dave Calhoun, a 45 per cent increase from the previous year even as the aircraft manufacturer struggles to contain a crisis of confidence in its quality controls.
In a regulatory filing on Friday, Boeing said Calhoun had been granted a bonus in February 2023 that would boost his total pay above the level of previous years.
He was awarded a potential $30mn in stock awards on top of his $1.4mn salary, the company said, lifting his total for the year above the $22.6mn he was paid in 2022.
However, his stock-based pay will not be realised until he sells the shares, which cannot all be cashed in immediately. He might forfeit some of the total if he steps down at the end of this year as he said we would last month.
Boeing’s share price has dropped 27 per cent since the start of 2024, cutting into the value of the grants.
“As the company continues its efforts to restore stability and public confidence during a pivotal period of transition for Boeing, it bears emphasis that Calhoun’s 2023 awards were designed to emphasise the importance of long-term shareholder value growth,” the company said.
It added that in February this year he declined his planned $2.8mn annual bonus.
The company has been reeling since January when a door panel blew out mid-air during an Alaska Airlines flight. The accident, which involved a Boeing 737 Max 9, is being investigated by the US Department of Justice, the National Transportation Safety Board and the US Federal Aviation Administration.
The company has had to slow production of the 737 Max as it seeks to resolve manufacturing flaws, and some airlines have been forced to amend their flight schedules because of delays in deliveries of its aircraft. Boeing has warned it would burn more cash in the first quarter than previously expected because of the crisis.
While the Alaska Airlines accident “shows that Boeing has much work yet to do, the board believes that Mr Calhoun has responded to this event in the right way by taking responsibility for the accident”, the company said.
The pay award will be put to shareholders for a vote at Boeing’s annual meeting, which is scheduled for May 17.
Calhoun’s pay had already been the focus of criticism last year. Proxy adviser Institutional Shareholder Services said in 2023 that the company had increased pay for its chief executive despite reporting negative total shareholder returns.
“The company has underperformed over CEO Calhoun’s tenure,” ISS said last year.
Separately on Thursday, US Senator Tammy Duckworth heaped further criticism on Boeing. In a letter to the FAA, she said Boeing’s failure to tell pilots that the cockpit door of a 737 Max is supposed to fly open during rapid depressurisation was “chilling given its history of concealing 737 Max information from pilots”.
“This is dangerous, and the FAA must not view this latest omission in isolation,” she said.
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