With Boeing in crisis due to the grounding of the 737 MAX and the coronavirus pandemic’s hit to air travel, chief executive Dave Calhoun chose last March to forgo his base salary for the rest of the year and his annual incentive bonus for 2020, leaving $3.6 million that he could have taken.
With that, his direct take-home pay last year was just over $269,000 (his base salary up to March 20), according to a Boeing regulatory filing Friday.
Adding the value of standard personal benefits for Boeing executives — the use of aircraft and limousines for personal travel, life insurance premiums and company contributions to his retirement plan — the compensation he received in his first year in the job came to just shy of $560,000.
Most other Boeing executives, meanwhile, actually actually earned more during the financially calamitous 2020 than in previous years because of changes in Boeing’s bonus program.
Calhoun’s voluntary gesture left on the table $1.1 million in base salary from March through December and a guaranteed bonus of $2.52 million.
However, according to the annual proxy statement that shows compensation figures for the company’s five highest-paid executives, Calhoun also was granted just over $20.5 million in stock awards last year, though none of those have vested yet.
Counting that future remuneration, his total compensation credited to 2020 was just over $21 million.
Last year’s filing showed that Calhoun’s predecessor as CEO, Dennis Muilenburg, had pocketed $30 million in 2019, including his base salary and previous stock awards that vested that year.
Calhoun’s stock awards for the future
Calhoun, 63, a former GE Aviation executive who had been on the Boeing board since 2009, took over as CEO in January 2020 after Muilenburg was fired for mishandling the return to service of the 737 MAX.
Boeing gave Calhoun two large stock awards worth $17 million upon hiring. Those didn’t vest during 2020.
Of that, $10 million is compensation for amounts forfeited when he left the Blackstone Group to take the Boeing job. He’ll get that in three equal installments starting this year.
The other $7 million is contingent on Calhoun having “substantially achieved” a series of performance goals by the end of 2023.
The goals included getting the 737 MAX back into service, which is already complete. The major remaining goals are a successful crewed flight of Boeing’s Starliner space capsule and entry into service of the new 777X.
That last goal is already delayed until late 2023.
In addition, Calhoun was granted $3.5 million in 2020 as a three-year performance award that will vest in early 2023.
Compensation for other execs rose
In 2020, the longer-term bonus plan for executives — three-year performance stock awards that were awarded in 2018 to cover the 2018-2020 performance period — paid out at zero.
Nevertheless, most Boeing executives actually earned more last year than in 2019.
That’s because they had received no 2019 annual bonus due to the impact of the MAX grounding on Boeing’s financial performance.
In February of last year, realizing that the grounding would again mean missing its standard financial targets, Boeing’s leadership changed the metrics that determine the size of the annual bonus to ensure that employees would receive something despite plummeting revenues.
As a result, Boeing did pay out annual bonuses for 2020 to all employees, though the financial losses meant they came in lower than pre-set targets and varied among the company’s various divisions. Commercial Airplanes employees received smaller bonuses than those in the defense division due to their relative financial performances.
For top executives, the bonuses are a more significant part of their total income. Aside from Calhoun, other executives did accept their 2020 annual bonuses.
Greg Smith, executive vice president and chief financial officer, received $5.2 million in 2020 pay and future stock awards. That was up from $4.5 million in 2019, although way down from the $8.7 million he received in 2018, the last year that Boeing performed well financially.
Smith’s 2020 bonus was $889,000, or 67% of his pre-set target of $1.3 million.
Stan Deal, chief executive of the local Commercial Airplanes division since October 2019, received $5.5 million in 2020 pay and future stock awards. That was up from $4.2 million in 2019 and $4.5 million in 2018.
Deal’s lower level of pay in 2018 compared to the others is because he only reached the top leadership level in fall 2017, qualifying only then for the most lucrative long-term bonuses that pay out three years later.
Deal received a 2020 bonus of $676,000, or 56% of his target bonus of $1.2 million.
Leanne Caret, CEO of Boeing’s Defense and Space division, received $4.5 million in 2020 pay and future stock awards, up from $3.7 million in 2019, although well below the $10.7 million she received in 2018.
Caret’s 2020 bonus was $899,000, or 82% of her target of $1.1 million.