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 began as Boeing CEO in January 2020, he was awarded a $7 million bonus package by the board if he completed a list of goals by the end of 2023.
“The company has substantially achieved, or is on track to achieve, most of these specific objectives,” the filing reads. But it’s clear it won’t put its new widebody jet, the 777X, into production and service. The company announced in April 2022 that it would delay the aircraft’s debut to 2025.
Because of this, the company’s filing states that Calhoun will not receive the $7 million.
But the filing says the board is pleased with Calhoun’s performance and understands he’s falling short.
“The Board also recognizes that Mr. Calhoun made several decisions regarding the management of the 777 program that were in the Company’s long-term interests but contributed to the failure to achieve that goal,” the filing reads. “The Board recognizes and appreciates Mr. Calhoun’s leadership and many actions taken over the past three years to navigate an ever-changing environment to best position the Company for the future and without regard to the impact his decisions will have on previous targets may have been set prior to the widespread Covid outbreak and changing regulatory environment.”
But even without the $7 million, Calhoun’s total compensation package increased from $21.1 million in 2021 to $22.5 million in 2022.
And in February, the board gave Calhoun 25,000 Boeing shares as a retention bonus. He is scheduled to receive these shares in two equal blocks – the first one one year after the grant and the second two years after the grant date. Those 25,000 shares were worth approximately $5.3 million on grant date.
The new grant “reflects the Board’s recognition and continued confidence in Mr. Calhoun’s strong leadership and is intended 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 will turn 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 straight annual loss, losing $6.6 billion, up from $5.5 billion a year earlier and more than $1 billion worse than analysts expected at the time of the report.
And the performance of Boeing’s management has drawn public criticism from some of its key customers. In May last year, Michael O’Leary, CEO of Ryanair – Europe’s largest discount airline, which has ordered nearly 400 jets from Boeing since 2010 – released an obscene criticism of Boeing’s management.
“Right now we think Boeing management is running around like headless chickens, unable to sell planes, and then they aren’t even able to deliver the planes they deliver on time,” he said at a conference call. He said company executives need either an immediate “reboot or a ramp-up of the A**.”
“Either the existing management needs to up their game, or the existing management needs to be changed, that would be our way of life,” he said. “We are very happy working with the existing management but they need to fucking improve on what they have delivered to us over the last 12 months.”
And O’Leary isn’t the only major customer to criticize Boeing management.
Domhnal Slattery, the CEO of Avolon, one of the world’s leading aircraft leasing companies, suggested in May Boeing needed a culture change — and maybe leadership too.
“I think it’s fair to say Boeing got lost,” Slattery said at the Airfinance Journal conference in comments first reported by Reuters and confirmed by Avolon. “Boeing has a rich history… They make great planes. But they say culture eats strategy for breakfast, and that’s exactly what happened at Boeing.”
Boeing declined to comment on the comments from these key customers.