Boeing CEO Dave Calhoun is set to leave the company at the end of the year with a significant payout of $24 million, despite his unsuccessful tenure which was marked by a series of setbacks, including the 737 Max crashes. His departure comes as Boeing’s stock price has dropped by 43% since he took over as CEO. If his successor can increase the stock price by 37%, Calhoun stands to make an additional $45.5 million through various stock options he holds.
An analysis of SEC filings revealed that Calhoun holds a significant number of stock options with exercise prices lower than the company’s current stock price. This includes options that expire in February 2031 and 2032 priced at around $258 and $260 respectively. As of Tuesday, Boeing’s stock price was around $188 a share, meaning that Calhoun’s successor would need to raise it significantly to allow him to cash out on his options and receive the additional compensation.
If Calhoun’s departure is considered a retirement, he would be entitled to a $5 million payout based on the portion of restricted stock that would vest. During his time as CEO, Calhoun earned a total of $65 million in compensation, significantly higher than CEOs of Boeing’s peer companies such as Ford, 3M, Caterpillar, and Microsoft. Despite his high compensation, Boeing’s stock price has fallen by 50% over the past five years, compared to an average increase of 13% for its competitors.
Calhoun announced his resignation amidst a wider shakeup at Boeing, which also includes the departure of the company’s chairman, Larry Kellner, and Stan Deal. Steve Mollenkopf, the former CEO of Qualcomm, will take over as the new board chairman and lead the search for Calhoun’s successor. The decision comes after a recent incident involving a Boeing 737 Max 9 operated by Alaska Airlines, which experienced a loose rear door plug during a flight, resulting in the FAA grounding the same model of aircraft.
Boeing’s reputation has been further tarnished by the recent incident, which led to a temporary grounding of the aircraft. Calhoun publicly acknowledged the mistake that caused the door blowout and encouraged airline CEOs to meet with the company’s board to address their concerns about Boeing’s production issues. Despite these challenges, Calhoun’s departure will mark the end of a tumultuous period for Boeing, and the company will now focus on finding new leadership to guide its recovery and restore its reputation in the aerospace industry.
