Boeing CEO Calhoun narrowly missed out on a $7 million bonus. But he still got a raise

New York (CNN) Boeing CEO David Calhoun missed out on a $7 million bonus last year but still got a raise.

Boeing’s proxy filing on Friday revealed that when Calhoun started as CEO of Boeing in January 2020, the board awarded him a $7 million bonus if he met a list of job goals. by the end of 2023.

“The company has substantially achieved, or is well on its way to achieving, most of these specific goals,” the filing said. But clearly one thing it won’t do is put its new jumbo jet, the 777X, into production and into service. The company announced in April 2022 that it was pushing back the aircraft’s debut until 2025.

Because of this, the company’s filing indicates that Calhoun will not get the $7 million.

However, the filing indicates that the board is happy with Calhoun’s performance and understands that he falls short.

“The Board of Directors also recognizes that Mr. Calhoun made several decisions regarding the management of the 777 program that were in the long-term best interests of the company, but which contributed to this goal not being achieved.” , indicates the folder. “The Board of Directors greatly recognizes and appreciates Mr. Calhoun’s leadership and his many actions over the past three years in navigating an ever-changing environment to best position the company for the future, and regardless account of the impact his decisions might have had on goals that were before the widespread onset of Covid and the changing regulatory environment.”

But even without the $7 million, Calhoun’s total compensation rose to $22.5 million in 2022 from $21.1 million in 2021.

And in February, the board awarded Calhoun 25,000 Boeing shares as a retention bonus. It is expected that these shares will be received in two equal blocks – the first to be received one year after their grant and the second two years after the date they were granted. These 25,000 shares were worth approximately $5.3 million on the date of grant.

The new grant “reflects the Board’s recognition and continued confidence in Mr. Calhoun’s strong leadership, and is designed to help retain Mr. Calhoun as he continues to lead the work to position the company for the future”.

Boeing normally has a mandatory retirement age of 65 for Boeing executives, and Calhoun turns 66 in April. But in April 2021, the company announced that its board had extended Calhoun’s retirement age to 70.

Boeing had another tough year financially. It reported its fourth consecutive annual loss, dropping $6.6 billion, down from $5.5 billion a year earlier and more than $1 billion less than analysts had expected at the time of the report.

And the performance of Boeing management has been publicly criticized by some of its major customers. In May last year, Michael O’Leary, CEO of Ryanair – Europe’s biggest budget airline, which has ordered nearly 400 jets from Boeing since 2010 – dropped a crude criticism of the management of Boeing.

“At the moment, we believe that Boeing management is running around like headless chickens, unable to sell planes, and even the planes they deliver, they are unable to deliver them on time,” he said. he said on an earnings call. He said company executives needed either an “immediate reboot or an a** reboot”.

“Either the existing management has to up their game or they have to change the existing management, would be our outlook on life,” he said. “We are very happy to work with the existing management, but they really need to improve on what they have provided us with over the past 12 months.”

And O’Leary isn’t the only major customer to criticize Boeing management.

Domhnal Slattery, CEO of Avolon, one of the world’s leading aircraft leasing companies, suggested in May that Boeing needed a change in culture – and perhaps leadership.

“I think it’s fair to say that Boeing has lost its way,” Slattery told the Airfinance Journal conference, in comments first reported by Reuters and confirmed by Avolon. “Boeing has a long history… They build great planes. But they say culture eats strategy for breakfast and that’s what happened at Boeing.”

Boeing declined to comment on the remarks from those key customers.

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