Boeing Chief Executive Jim McNerney’s total compensation last year jumped to nearly $29 million, including more than $14 million in bonuses. The second highest paid executive, Commercial Airplanes boss Ray Conner, received $16 million.
Boeing Chief Executive Jim McNerney’s total compensation last year jumped to nearly $29 million, up 24 percent from 2013, according to a regulatory filing Friday.
Though most Boeing employees got a smaller bonus this year than last, McNerney’s total included an annual bonus of $4.4 million, the same amount that he received in 2013.
His compensation also included a $10 million three-year performance bonus, double the target amount.
Boeing’s second highest paid executive, Commercial Airplanes boss Ray Conner, received $16 million. Conner got an annual bonus of $1.3 million and his three-year performance bonus was almost $800,000, the filing shows.
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Conner’s 2014 bonus was down 9 percent from the previous year’s.
However, the filing also shows Conner was given a supplemental grant of 50,000 shares that will vest in three years “to acknowledge his many significant contributions to our Commercial Airplanes business and to encourage him to forgo an opportunity to retire in the near future.”
The current value of that stock is $7.6 million.
Dennis Muilenburg, Boeing’s chief operating officer and the likely successor to McNerney, received almost $12 million.
His annual bonus was $1.6 million, down 7 percent from the previous year, and his three-year performance bonus was $2.6 million.
The filing listing the executives’ compensation comes just weeks after both white- collar staff and production workers at Boeing received lower annual bonuses than last year.
Despite Boeing’s $5.4 billion net profit in 2014, the rank-and-file employees’ bonuses were down from the previous year because they failed to “far exceed” financial-performance targets set at the beginning of the year. Though the company exceeded those preset targets by 30 percent, that was not enough to trigger the maximum bonuses, equal to twice the target bonuses.
Unlike those workers, McNerney was granted the maximum bonus allowed under his annual compensation plan.
In addition, in the separate three-year performance bonus plan for executives, the filing states that Boeing’s 2012-2014 “cumulative economic profit” was $8.332 billion versus a target of $5.701 billion, resulting in a maximum award of twice the target amount for McNerney and other executives.
Last month, salaried nonmanagement staff, including engineers, in Washington state received annual bonuses averaging just over $4,500.
That was approximately 12.5 days of extra pay, down from 16.5 days of extra pay the previous year, or a 24 percent drop.
Also last month, members of the Machinists union in a separate annual bonus plan received an average payout of $2,294.
This was 3.1 percent of their total 2014 gross wages, short of the maximum 4 percent bonus the Machinists received the previous year, or a 23 percent drop.
This month, Boeing’s managers will get the payout from a new annual bonus plan that will pay out bonuses ranging from 12.5 percent of salary for first-level managers to 22.5 percent of salary for third-level managers.
These high percentages were in part designed to compensate for the fact that in 2014 Boeing changed the pay structure so that managers no longer get paid for overtime.
The executives’ reported compensation totals for 2014 include stock grants that cannot be turned into cash for several years, as well as increases in the value of the pensions they’ll receive upon retirement.
Actual compensation realized during last year — equivalent to “take-home” cash — omits those future amounts. It replaces those figures with stock vested in 2014 from grants in previous years, as well as stock options exercised during the year.
In these terms, Conner’s “take-home” cash is greatly reduced by the $8.5 million he received in stock that hasn’t yet vested and comes to just under $6 million.
McNerney’s “take-home” cash for the year, bolstered by the $14.5 million in bonuses that were paid immediately, is listed in the filing as $23.3 million.