Boeing CEO David Calhoun’s compensation package for the previous year amounted to a significant $33 million, with the bulk of it comprising stock awards. However, the trajectory of his stock payout for the current year faces a substantial setback, dropping by nearly one-fourth. This reduction is attributed to the decline in Boeing’s stock price following a midflight incident involving an Alaska Airlines Boeing 737 Max aircraft.
The incident, which occurred in January, marked a pivotal moment for Boeing as Calhoun opted to forego a bonus for 2023, which was estimated to be close to $3 million. This decision came amid heightened scrutiny and ongoing investigations into the quality and safety of Boeing’s manufacturing practices. The fallout from the incident further compounded Boeing’s challenges as it navigates regulatory scrutiny and endeavors to rebuild trust among stakeholders.
Despite these setbacks, Calhoun received a base salary of $1.4 million for the previous year, supplemented by stock awards valued at a staggering $30.2 million. When factoring in other components, his total compensation reached $32.8 million, representing a notable increase from the previous year’s figures.
Since the midflight incident in January, Boeing has found itself under intense scrutiny from regulatory authorities, including the Federal Aviation Administration (FAA), the National Transportation Safety Board (NTSB), and the Justice Department. These agencies launched separate investigations into the incident, prompting the FAA to impose restrictions on Boeing’s production of 737s until safety concerns are addressed.
In response to the decline in Boeing’s stock price following the incident, the company announced that Calhoun and other top executives would experience a reduction of approximately 22% in their stock awards for the current year. This adjustment reflects the corresponding drop in share price and underscores the financial impact of the incident on Boeing’s leadership team.
Boeing’s new chairman, Steve Mollenkopf, underscored the company’s unwavering commitment to regaining trust and restoring its reputation in the wake of the incident. He emphasized that Boeing must perform at its best to meet the expectations of stakeholders and reaffirmed the company’s dedication to strengthening its quality assurance processes.
Calhoun, who assumed the role of CEO in January 2020, has faced similar challenges in the past, including compensation adjustments due to delays in the introduction of the new 777X jetliner. Despite these challenges, Boeing remains focused on its long-term objectives and is determined to overcome the obstacles it faces.
The company’s upcoming annual meeting, scheduled to take place online on May 17, will provide an opportunity for stakeholders to gain insights into Boeing’s strategic initiatives and plans for the future amid ongoing challenges and uncertainties.