Boeing CEO's compensation sees 25% cut this year: Here's why
David Calhoun, the CEO of Boeing, will see over a 25% reduction in his compensation package this year. This decision comes after a decrease in Boeing's share price following an incident involving one of its aircraft mid-flight in January. In 2023, Calhoun received nearly $33 million (about 45% rise), primarily from stock awards. The mishap has led to multiple investigations into the quality as well as safety of Boeing's manufacturing processes.
Calhoun declines bonus, plans to resign
Following the aircraft incident, Calhoun has voluntarily turned down a bonus of nearly $3 million for 2023, as reported by the company recently. He also announced his intention to resign as CEO by the end of the year. Calhoun has been leading Boeing since January 2020, a tenure marked by the grounding of MAX jets worldwide after two crashes.
Take a look at the compensation details
According to a regulatory filing, Calhoun's salary in 2023 was $1.4 million and his stock awards were valued at $30.2 million. Including other items, his total compensation amounted to $32.8 million. This marked a significant increase from his earnings of $22.6 million in 2022. Despite the increase, the recent aircraft incident has led to a substantial cut in his compensation for this year.
Boeing links executive pay to quality and safety
In response to the 737 MAX jet incident, Boeing's board has taken steps to tie executive pay more closely with quality and safety objectives. The company announced that stock awards for Calhoun as well as other senior executives this year will be about 22% below initial targets. This adjustment reflects the drop in Boeing's shares, which have fallen 26% since the panel blowout. The new measures aim at regaining trust lost due to recent events.
New chairman addresses shareholders
Steve Mollenkopf, the new Chairman of Boeing, emphasized in a letter to stockholders that the upcoming months and years are crucial for the company. He stated that it is "critically important for The Boeing Company to take the necessary steps to regain the trust lost in recent times." Mollenkopf further highlighted that a thriving, safe, and successful Boeing is essential for the world.
