Boeing’s outgoing CEO Dave Calhoun saw a decrease in his take-home pay last year, falling to $5 million after declining a bonus. This drop is significant when compared to his $7 million earnings in 2022. The prolonged safety crisis surrounding the company’s popular jetliner, the 737 Max, has impacted his latest compensation package.
While Calhoun’s total compensation increased by 45% to $32.8 million from $22.6 million in the previous year, Boeing has stated that the 2023 sum is closer to $25 million. This figure includes long-term incentives such as stock, with the planemaker’s shares declining nearly 30% this year. Stan Deal, who was recently replaced at the helm of the commercial airplanes division, saw his total compensation rise by 42% to $12.5 million.
Calhoun’s announcement of stepping down by the end of the year is part of a broader shakeup within Boeing. This overhaul also involved the replacement of the company’s chairman and head of the commercial airplane unit. Boeing is currently dealing with the aftermath of a door plug panel incident on a 737 Max operated by Alaska Airlines in January.
Boeing has disclosed that Calhoun declined a 2023 bonus valued at $2.8 million and that executive compensation will now be more closely tied to safety goals. The company’s newly-appointed chairman Steve Mollenkopf has emphasized their commitment to leaving no stone unturned in efforts to elevate the company. Boeing also stated that operational performance metrics for all business units will prioritize quality and safety goals.
In addition to the safety crisis surrounding the 737 Max, Boeing has faced challenges due to the Covid-19 pandemic’s impact on the aviation industry. The company has also grappled with quality defects on its aircraft, which have resulted in delays in delivering new planes to customers. The Alaska Airlines door plug incident has further exacerbated these issues, leading to investigations by the Justice Department.
Boeing’s financial outlook remains uncertain as it anticipates burning more cash than previously expected. The company is set to release its first-quarter results on April 24. With the ongoing investigations and production caps on the 737 Max, Boeing is striving to meet quality and safety goals to improve its operational performance.
Boeing’s CEO compensation taking a hit amid a safety crisis underscores the challenges facing the company. As it navigates through investigations, quality defects, and financial uncertainties, Boeing’s focus on safety goals and operational performance will be crucial in rebuilding trust with stakeholders and ensuring long-term sustainability.