Boeing‘s CEO, David Calhoun, experienced a withdrawal of his performance-based bonus due to the company’s inability to meet the 777X entry service window and other unachieved goals. In contrast, he received a larger retention package, leading to questions surrounding the board’s critical assessment of his performance.
Boeing has failed to reach multiple targets, such as the Presidential Aircraft, the KC-46 tanker, and T-7A Red Hawk trainer. The Boeing 777X project is significantly behind schedule, with uncertain demand for the jet. Calhoun’s sole apparent accomplishment is the safe return of the Boeing 737 MAX, which began before he took the CEO position.
According to Dhierin Bechai, who wrote «Boeing: The Fake 777X CEO Pay Cut» for Seeking Alpha, Calhoun was awarded a performance-based bonus of 21,988 restricted stock units (RSUs) in 2020, valued at over $7 million. However, due to his inability to achieve the set objectives, the bonus was withdrawn.
In February, Boeing granted Calhoun 25,000 RSUs, matching his open market purchases and ensuring his retention. This situation raises doubts about the authenticity of Calhoun’s pay cut, as he lost 22,000 RSUs but gained 25,000 RSUs, even though his performance is still questionable.
In 2022, Calhoun’s earnings as the CEO of Boeing totaled $21.8 million, comprising a $1.4 million base salary, $17 million in long-term incentives, and $3.4 million in annual incentives. The board’s choice to refuse Calhoun’s performance-based bonus while offering a more generous retention bonus has drawn scrutiny.
