Boeing denies CEO Calhoun $7 million bonus as a consequence of 777X delays

By Valerie Insinna

WASHINGTON (Reuters) – Boeing (NYSE:) Co. Chief Government Dave Calhoun won’t obtain a $7 million bonus as a result of firm’s failure to enter the 777X into service by the tip of 2023, Boeing mentioned Friday.

Boeing supplied the performance-based incentive to Calhoun when he changed former CEO Dennis Muilenburg in January 2020 and required that Calhoun obtain seven milestones by the tip of this 12 months.

Boeing’s compensation committee decided in August 2022 that the award wouldn’t vest when it turned clear that Calhoun wouldn’t meet the 777X entry into service purpose by 2023, in keeping with an organization submitting posted on Friday afternoon forward of an April 18 shareholder assembly.

Calhoun took residence $7 million in pay final 12 months, barely lower than his $7.4 million compensation in 2021, Boeing acknowledged within the submitting. His whole compensation, which incorporates longterm incentives that haven’t but vested, measured $22.5 million in 2022, a rise from about $21 million the earlier 12 months.

In 2022, Boeing confirmed that first supply of the widebody 777X had slipped to 2025, most just lately due to a setback within the plane certification timeline. The plane, also referred to as the 777-9, is a bigger model of the unique 777 plane and has been in improvement since 2013.

Boeing’s board of administrators mentioned Calhoun “considerably achieved, or is on observe to considerably obtain” a lot of the award’s efficiency targets, which embrace the return to service of the 737 MAX in 2020. The board additionally praised Calhoun’s management within the submitting, saying the CEO made a number of selections on the 777X program that had been within the firm’s long run pursuits however got here on the expense of the purpose being met.

In February, Boeing awarded Calhoun an incentive value roughly $5.3 million – made in restricted inventory items that vest in 2024 and 2025 – so as to induce the CEO to remain by way of the corporate’s projected restoration interval.

Whereas the corporate pointed to the 777X program as the explanation Calhoun won’t obtain his bonus, different milestones related to the motivation have but to be efficiently accomplished, equivalent to the primary crewed Starliner launch presently projected for April. The phrases of the award additionally referred to as for Calhoun to fulfill sure milestones on the Boeing-Embraer three way partnership, which dissolved in 2020.