The compensation for Boeing’s top leadership last year was lowered by the company’s deep financial troubles and the flagging stock price. Performance-based awards paid out zero.

But no worries. Boeing’s annual proxy filing on Friday shows the top executives did all right. They took home millions of dollars in cash pay, and the board granted them large stock awards that will pay millions more if performance improves in the years ahead.

Boeing lost $4.2 billion in 2021 as the company struggled through the staggering COVID pandemic blow to the airline business.

The Commercial Airplanes unit only slowly ramped up 737 MAX production, while quality defects all but halted deliveries of the 787 Dreamliner. Launches of space vehicles were repeatedly delayed, with Boeing’s Space unit embarrassingly eclipsed by the upstart SpaceX.

Still, CEO Dave Calhoun’s “take-home pay” last year was $7.4 million in salary, cash bonus and stock awarded when he became CEO that vested in 2021, the filing shows.

In addition, Calhoun — CEO for over two years — was granted new stock and option awards last year with a target value of $16 million.

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Much of that $16 million estimated value of the stock awards depends upon the future performance of the company and the share price.

The total compensation he received in 2021, not counting the stock awarded when he took the job, is estimated to be worth a total of $21 million.

Per regulatory rules, the proxy filing directly compares this amount to the $124,844 in annual total compensation for Boeing’s “median employee.”

“Based on this information, we estimated that our CEO’s 2021 total compensation was approximately 169 times that of our median employee,” the filing states.

Top executive payouts by division

Boeing Commercial Airplane CEO Stan Deal’s “take-home pay” last year was $5.7 million in salary, cash bonus and stock awarded earlier that vested in 2021.

In addition, Deal — who was appointed CEO of the local division in October 2019 — was granted new stock and option awards last year with a target value of $4.7 million.

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The total compensation he received in 2021, not counting the stock awarded in previous years, is estimated to be worth a total of $7.3 million.

Leanne Caret, CEO of Boeing’s defense and space division, took home $2.6 million, with stock awards added to bring her total 2021 compensation target value to $6.3 million.

Ted Colbert, CEO of Boeing’s aftermarket services unit — the best performing division last year — took home $5.3 million, with stock awards added to bring his total 2021 compensation target value to $5.7 million.

Greg Smith, who took early retirement as executive vice president and chief financial officer early in July, in addition to $2.2 million in salary and cash bonus, walked off with $14.5 million in vested stock.

After 31 years at Boeing, Smith had accumulated a company pension valued at $2.1 million. After leaving in July, he took his first pension payments, totaling $349,000 through the rest of the year.

Brian West, who came in to replace Smith as CFO at the end of August, received $1.6 million in salary, annual cash bonus and an additional hiring bonus. He was also given $6 million in stock awards that bring his total 2021 target compensation to $7.6 million.

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Shifting value of stock awards

For executives, stock awards are designed to account for more than half of their total compensation. However, the value of those awards is highly dependent on Boeing’s future financial performance as well as the future share price.

Of the long-term incentive awards in cash and stock granted in 2019 and vesting now three years later, 75% are performance-based and so paid out zero because of Boeing’s financial decline.

Because of the plunge in the stock price, the remaining quarter of the long-term incentive awards granted to executives as stock in 2019 is now worth less than half the value it had at the time of the award.

To illustrate the potential fluctuation in value from award to cashing in, consider that when former CEO Dennis Muilenburg was fired in December 2019, a company filing detailed how he left with an estimated $62.2 million in stock and pension distributions.

However, of that, $13.1 million in 2019 performance awards now turns out to be exactly zero and a straight stock award worth $8.4 million back then is worth half that now at the time of vesting.

The devaluation of other elements of Muilenburg’s total compensation on leaving indicate the current value is around $44 million.

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However, the exact amount depends on when Muilenburg chose to sell his vested stock. The share price fell off a cliff from nearly $340 per share to lower than $100 in early 2020 after the pandemic hit, and has recovered to around $176 today.

From this year forward, the proxy shows the board has introduced a new twist to incentive pay for top executives that will elevate the share price to the top of their minds.

The longer-term executive bonuses previously dependent on company financial metrics over three years — including revenue, earnings and cash flow — will, going forward, depend solely on the stock price change in that period.

This part of executive pay will be half in stock grants and half in stock options with a strike price set at 120% of the share price at the time of the award. The options will vest in three years but will pay out nothing unless the stock is above that strike price.

Prior goals not achieved

While these long-term bonuses based on three-year performance are 70% of executive pay, another big element is the annual bonus.

The payouts for the company’s annual bonuses are determined by a set of metrics that are the same for all employees — although with vastly higher target payouts for executives.

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Friday’s filing discloses Boeing has decided to add two new parameters for that annual bonus.

In 2021, with the financials in a slump that risked annual bonuses dropping to zero, Boeing had already added to its existing financial metrics certain operational measures such as productivity, quality, and product and employee safety.

The board has now added measures of the company’s focus on climate change and on diversity, equity and inclusion.

In an unusual move, the board also is recommending passage at the annual general meeting of an outside shareholder climate-change resolution. That would require Boeing to regularly report progress toward its long-term net-zero emissions goal.

The board also adjusted the way CEO Calhoun can access his stock awards.

“Calhoun may not sell or otherwise transfer shares acquired through exercise of vested options until he leaves the Company.” His vested stock will be distributed to him after he leaves in ten annual installments, the filing states.

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With these changes, 93% of Calhoun’s total target pay is at risk or variable and will only be realized by him dependent on Boeing’s long-term performance over a period of years, including after he leaves the company.

As for his nearer-term performance, the board decided that Calhoun has not yet “substantially achieved” the major goals set when he was hired in January 2020 and so the $7 million in stock that was to be his reward for getting there is being held until next year, when the board will reassess his progress.

Calhoun had three years to achieve the goals set in 2020, with half of the $7 million potentially paid after two years, which would be now, and the rest a year later.

The goals included the return of the 737 MAX to service, which was accomplished late that year. And in the proxy filing the board praised Calhoun’s implementation of a new safety system at the company and the way he cut spending and production in response to the pandemic.

Among the goals he failed to achieve are the entry into service of the 777X and a successful Starliner spaceflight with crew.

The 777X is delayed and likely won’t enter service before 2024. And Boeing will take another shot at a delayed second uncrewed flight test of the Starliner no earlier than May.

For Calhoun, that launch might have $7 million riding on it.