Boeing CEO Dave Calhoun received around $32.7 million in compensation for 2023, which includes a base salary of $1.4 million, stock awards of nearly $30.2 million, and other compensation of around $1.1 million. Calhoun chose not to receive an annual bonus in February after an incident involving an Alaska Airlines 737 Max 9. This is the highest compensation Calhoun has received during his tenure as CEO, with his pay in 2022 being around $22.6 million and in 2021 being around $21.2 million. Stan Deal, the former CEO of Boeing Commercial Airplanes, will be paid around $12.5 million for 2023, with most of his compensation coming from stock awards.
In response to the Alaska incident, Boeing’s executive compensation committee has made changes to the way the company’s top officials are paid in 2024. Executives in the commercial airplanes unit will now have their pay weighted 60% towards operational performance and 40% towards financial performance, with a focus on safety and quality. Financial performance will now be evenly weighted between business unit and overall company results, rather than business unit results receiving only a 33% weighting. These changes are meant to drive greater accountability for financial outcomes at the business unit level.
Calhoun had been facing pressure from regulators and airlines following the Alaska incident, which highlighted Boeing’s production and quality issues. The National Transportation Safety Board’s preliminary report found that Boeing had not properly drilled in the four bolts needed to keep the door plug on the Alaska jet intact. Boeing has apologized for the incident and committed to improving its production processes and quality control. Calhoun is set to step down from his role at the end of the year, with new board chair Steve Mollenkopf promising to leave no stone unturned in efforts to renew the company.
The changes in executive compensation metrics for 2024 reflect Boeing’s commitment to prioritizing operational performance, particularly in the area of safety and quality. By shifting the weight towards operational performance and equalizing the financial performance metrics, Boeing aims to increase accountability for financial outcomes at the business unit level. The company is focused on addressing the issues brought to light by the Alaska incident and renewing its commitment to safety and quality in its operations. Calhoun’s decision to forgo an annual bonus after the incident demonstrates his dedication to holding himself accountable and working towards improving Boeing’s processes.
Overall, Boeing is making significant changes to how it compensates its top executives in response to challenges faced in 2023. The company’s focus on safety, quality, and financial accountability reflects a commitment to addressing issues that have arisen and ensuring that the company remains a leader in the aerospace industry. With a new board chair and a renewed focus on operational performance, Boeing is poised to make strides towards rebuilding its reputation and regaining the trust of regulators, airlines, and shareholders. The increased transparency and accountability in executive compensation signal a new era for Boeing under new leadership.
