Boeing CEO’s Pay Plunges Amid Jetliner Crisis and Executive Shake-Up

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In the aftermath of a perilous mid-air incident, Boeing is restructuring executive compensation to prioritize safety. The shake-up comes as the company grapples with the fallout from a critical door plug panel malfunction on a 737 Max operated by Alaska Airlines.

Outgoing CEO Dave Calhoun’s take-home pay dropped to million in 2023, excluding a declined bonus worth an estimated .8 million. His total compensation rose to .8 million, primarily driven by long-term incentives, but the company clarified that his actual pay is closer to .5 million. Boeing stock has declined nearly 30% this year.

“We will leave no stone unturned in our efforts to get this company where it needs to be,” declared newly appointed Chairman Steve Mollenkopf.

Compensation Tied to Safety Goals

Amid the ongoing safety crisis, Boeing has announced that executive compensation will be inextricably linked to safety metrics. If performance targets are not met, long-term incentives could be slashed to zero.

Calhoun’s Departure and Company Shake-up

Calhoun’s departure from Boeing’s top spot by the end of 2024 marks the latest in a series of management changes. The company also replaced its chairman and commercial airplane division head.

Quality Concerns Plague Boeing

Besides the 737 Max crashes that led to Calhoun’s predecessor’s ouster, Boeing has faced a slew of quality defects that have slowed deliveries and hampered cash flow. These include the Alaska Airlines door incident, which is under investigation by the Justice Department and has prompted the FAA to limit 737 Max production.

Boeing’s Financial Woes

With its last annual profit posted in 2018, Boeing is facing ongoing financial challenges. The pandemic’s impact on the aviation industry, coupled with production issues, has taken its toll on the company. Upcoming first-quarter results scheduled for April 24 are expected to shed further light on Boeing’s financial performance.

The Path Forward

Boeing’s commitment to safety is paramount as it seeks to restore its reputation and regain investor confidence. By tying executive pay to safety metrics, the company aims to ensure that leadership prioritizes the well-being of passengers and crew.

With a new leadership team in place, Boeing faces a daunting task of addressing past missteps and rebuilding trust. The path forward will be challenging, but the company’s unwavering focus on safety should guide their every decision.

Data sourced from: cnbc.com