Shareholders of embattled airplane maker Boeing approved a pay package of nearly $33 million for outgoing CEO Dave Calhoun at the company’s annual general meeting on Friday.
That’s the highest package ever paid to the company’s CEO and a 45% increase from the $22.6 million he received for 2022. The vast majority of the bump comes from a giant stock bonus granted on top of his more-than-a-million-dollar salary.
Calhoun, who has led Boeing since 2020, announced in March that he will leave the company by the end of the year.
The shareholder vote on Friday was made to approve Calhoun’s 2023 pay package. Calhoun has said he declined to accept an additional annual incentive bonus of $2,800,000 for the year – a request the board said he made after the Alaska Airlines incident.
Upon his retirement, Calhoun is set to take home another going-away present: a $45 million mix of stock awards and options that vest over time.
The approval comes as the plane maker is facing additional scrutiny for a series of safety incidents, including a mid-air blowout of part of a fuselage in January, which prompted a number of investigations into the company’s practices, an executive shakeup and promises that the company will turn itself around.
Boeing has been struggling financially for five years, since fatal crashes of its 737 Max in late 2018 and early 2019 resulted in a 20-month grounding of its best-selling plane. It was also hit by the pandemic, which caused a near-halt in air travel for months and deep losses at most airlines that buy its planes.
“Our compensation program is designed to align leadership pay with the long term performance of our business,” said Steve Mollenkopf, Boeing’s new chairman, when asked how the company can justify such a high compensation package given recent safety grievances. “It’s really driven by meeting our commitments to the highest safety and quality standards.”
Since the start of the grounding in 2019 the company has reported adjusted losses totaling more than $31 billion, and losses are projected to continue going forward.
“The board is confident that the current compensation structure continues to directly align with performance and balances both the meaningful progress made to restore operational and financial strength along with the fact that certain performance criteria has not been met,” he said.
The compensation committee “took swift action to make significant design changes to our compensation plan in 2024” after the Alaska Airlines incident in January, Mollenkopf said. The annual incentive metric now gives greater weight to operational metrics, like safety and quality.
Shares of Boeing (BA) were down 0.1% in afternoon trading.
This story is developing and will be updated.
