Written by Alison Lampert, Abhijit Ganapavaram, and David Shepherdson
(Reuters) – The 2023 pay package of Boeing Co.'s chief executive, who recently announced his resignation amid a safety crisis, will increase by about 45% to nearly $33 million, the company said on Tuesday. The US aircraft manufacturer announced on Friday.
Boeing said much of Chief Executive Officer Dave Calhoun's compensation was in deferred stock, which declined in value in the wake of January's midair panel explosion.
The adjusted value of Mr. Calhoun's total compensation in 2023 is $24.8 million, the company said in a regulatory filing. Boeing stock has fallen nearly 30% this year as the company grapples with quality concerns from regulators and customers following the Jan. 5 explosion of an Alaska Airlines 737 MAX 9 plane.
The agent did not discuss plans for Calhoun, who announced on March 25 that he would step down from the top job by the end of the year. He received total compensation of $22.6 million in 2022, according to his filing.
Calhoun's potential retirement benefits are valued at more than $44 million at the end of 2023, according to filings.
Production of Boeing's top-selling 737 MAX has declined in recent weeks as U.S. regulators step up factory inspections and plane makers look to improve quality. European rival Airbus is expanding its lead in the single-aisle jet market.
The crisis brought major changes to Boeing's overall management, including the resignation of Larry Kellner, chairman of Boeing's board of directors, and Stan Diehl, head of commercial aircraft operations. Mr. Diehl will be succeeded by Stephanie Pope, chief operating officer.
Steve Mollenkopf, the board's new chairman, told shareholders in a Friday filing that he “commits to me personally and as a board that I will do everything in my power to lead this company to where it needs to be.” Stated.
Calhoun earned a $5 million salary in 2023 after refusing to consider a $2.8 million bonus, up from $7 million in 2022. Calhoun has not received a bonus in the past three years, according to previous filings.
Diehl's actual 2023 salary was $2.6 million, increasing his total compensation by 42% to $12.5 million, but Boeing estimates his current value at $9.7 million.
Boeing's board of directors also decided this year to reduce the value of the Long-Term Executive Award by the percentage of the decline in the company's stock price since the crash and the award date in 2024.
With this reduction, Calhoun will receive $13.25 million in 2024, against a target of $17 million. His winnings a year ago were $21.25 million.
Following two 737 MAX crashes in 2018 and 2019 that killed a combined 346 people, Boeing revamped its executive compensation policy to focus on product safety and quality.
In 2024, safety and quality will receive 60% weight in determining annual incentives for Boeing's commercial aircraft, while financial performance will receive 40% weight.
Long-term incentives for Boeing's executive officers also include new metrics, such as mandatory employee culture surveys to evaluate safety management.
In February, a panel of experts reviewing safety management found a “disconnect” between Boeing's management and employees regarding safety culture.
Rosanna Weaver, director of pay justice and executive compensation at the shareholder advocacy group As You So, said she thinks Boeing is doing the right thing in evaluating safety, but that such efforts “do nothing to begin with. “It should have been.''
(Reporting by Alison Lampert in Montreal, David Shepherdson in Washington and Abhijit Ganapavaram and Deborah Sophia in Bengaluru; Editing by Matthew Lewis and David Gregorio)
