The BBC is reporting Boeing shareholders have voted to give outgoing President Dave Calhoun a 2023 pay package worth a total of about $33 million. The vote, which was taken at the company’s annual meeting, is not binding. The shareholders also agreed to keep Calhoun as a director as Calhoun steps down and the company enters a crucial period. “The months and years ahead are critically important for our company as we take the necessary steps to regain the trust lost in recent times,” newly elected Board Chair Steve Mollenkopf told the meeting.
Calhoun’s compensation package includes $1.4 million in salary and stock awards worth about $30 million. The decision comes after a tough year for Boeing’s commercial airplane division, with numerous quality control issues affecting production and culminating with the loss of a door plug on an Alaska Airlines MAX 9 that was missing four bolts needed to hold it in place. There was resistance among some shareholder over the pay award even as Calhoun and Mollenkopf acknowledged the problems facing the company are “potentially existential.” Still, the company said Calhoun had overall done a good job in his four-year tenure.
“The 737 MAX accidents and COVID have combined to create tremendous stress on the Company’s manufacturing operations and supply chain,” the company said. “However, the Board believes that Mr. Calhoun’s primary focus on safety, quality and transparency is exactly what Boeing has needed, and continues to need.” The meeting came as the Department of Justice said it was considering criminal proceedings against Boeing over allegations it had breached a deal shielding it from criminal charges after the crashes of two MAXes that killed 346 people in 2018 and 2019.
So, does this make sense to anyone?
No…
Who says crime doesn’t pay ?
To put this in perspective one would need to know who the shareholders are. For those outside the C-suites, it is hard to understand if and why such pay packages are really necessary and if you really couldn’t get 99% of the performance at a 50% or even higher discount.
Boeing needs to take a leaf from US Navy. A skipper can have a stellar tour of duty in command of a ship, but let a misheard command cause a helmsman to drive the ship aground while returning to port, and the skipper is immediately relieved of command due to “loss of confidence in his ability to command”. No ifs, ands, or buts. What follows is reduction in rank and forced retirement. No tolerance for failure. The quality control issues and the travesty of MCAS came on his watch, and he should be held accountable, along with the chain of command down to the production level supervisors and individual assembly workers. Anyone who “didn’t feel right” about what was happening at Boeing and didn’t act on it is equally culpable. Calhoun deserves a jail cell (among the general population), not a golden parachute. Same for his underlings in the chain of command down to those directly responsible for QC failures and ridiculous work-arounds such as MCAS. The alternative is eventual collapse of the entire Boeing empire.
I absolutely agree.
Actually the Max issues came during Dennis Muilenbetgs tenure and that crook got more than $60 million when he was ousted. Makes complete sense.
Well … Saudia is speaking with its money … and buying over 100 Airbus’.
Prison that would be the right thing.
Just disgusting!
This is how oligarchies work. “Rough individualism for ordinary Americans but socialism for the rich.”
Maybe the shareholders are afraid of missing out on their personal rewards if they refuse Calhoun’s compensation…
These CEO’s are basically titular heads of very large Corporations who glad hand and sit at the top of the food chain while others effectively run the Company. To pay someone THIS much during a time when the reputation and business is suffering is OUTRAGEOUS! At some upper limit, CEO salaries are sinful; I’d say $33M fits that description. And to keep him on the Board is likewise outrageous. It’s no damn wonder Boeing is floundering and in very bad stead.
Stupid Shareholders = Stupid Management = Stupid Decisions. It all makes sense now.
Well, let’s see… During Calhoun’s tenure as CEO, the price of the stock has gone nowhere. Current earnings are a MINUS $3.55 per share, the company is losing market share to Airbus and the company is under Congressional, NTSB and FAA scrutiny for issues like missing door plug bolts and poor quality control. And yet the stock market “experts” seem to think the stock has a “buy” recommendation. I guess PT Barnum was correct: There is a sucker born every minute…
Kinda puts a damper on those who argue for CEO comp – but no matter, the media exposure will die off in a week or two and you’re up $30mm – easy trade off if you ask me
Giving Calhoun a huge pay package and keeping him as a director, despite Boeing’s serious problems, looks out of touch with reality. Many people think it shows poor judgment and priorities from Boeing’s leadership, making the situation seem like “bullshit” to those who expect executives to be paid based on their performance.
Well! That seals the deal for me ever buying Boeing stock! As in never.
Who would want to be a CEO of a multi-billion dollar company if they weren’t offered 10’s of millions of dollars in stock each year?
If you look at CEO salaries, nearly all are in the 1.2 to 1.4 million dollar range. They make their money on stocks, whether they earned it or not.
Something does not make sense from this BBC report. My understanding is share holders do not vote on CEO pay packages. The Board of Directors do. The current Board of Directors approving that pay package, yes I can believe that. If you want to read an accurate report, read Seattle Times.
Have you been following the news on Elon Musk’s pay package – which the share holders are going to vote on?