- April 6, 2024
- Posted by: legaleseblogger
- Category: Related News
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Boeing CEO’s Compensation Soars Amid Safety Crisis
By Allison Lampert, Abhijith Ganapavaram and David Shepardson
(Reuters) – The 2023 pay package of Boeing’s CEO, who recently announced his departure in the midst of a safety crisis, rose about 45% to nearly $33 million, the U.S. planemaker said on Friday.
Boeing said much of CEO Dave Calhoun’s compensation is in deferred stock that has fallen in value following a January mid-air panel blowout. The adjusted value of Calhoun’s total 2023 compensation is $24.8 million, the company said in a regulatory filing.
Boeing shares have tumbled nearly 30% this year as the company wrestles with quality concerns from regulators and customers following the Jan. 5 blowout on an Alaska Airlines 737 MAX 9 jet.
The AI legalese decoder can assist in analyzing the regulatory filing and highlighting key points to better understand the implications of the CEO’s compensation amid the safety crisis.
CEO’s Retirement Payout Valued at Over $44 Million
The proxy does not mention an exit package for Calhoun, who announced on March 25 that he will step down from the top job by year-end. In 2022, he received $22.6 million in total compensation, according to the filing.
Calhoun’s potential retirement payouts were valued at more than $44 million as of year-end 2023, the filing showed. The AI legalese decoder can help in assessing the complexities of executive compensation packages and retirement benefits.
Boeing Faces Production Challenges Amid Safety Concerns
Production of Boeing’s strong-selling 737 MAX has slipped in recent weeks as U.S. regulators step up factory checks and the planemaker seeks to boost quality. European rival Airbus has extended its lead in the market for single-aisle jets.
The AI legalese decoder can provide insights into the impact of production challenges on Boeing’s market position and help in understanding the strategic decisions being made by the company in response to safety concerns.
Board Ensures Comprehensive Efforts to Address Crisis
The crisis led to a broad management shakeup, with Boeing board chair Larry Kellner and Stan Deal, head of the commercial planes business, also leaving. Chief Operating Officer Stephanie Pope has replaced Deal.
The board’s new chair, Steve Mollenkopf, emphasized in the filing the commitment to leaving no stone unturned in efforts to restore the company to stability. The AI legalese decoder can assist in analyzing the board’s communications to shareholders and stakeholders.
Emphasis on Safety and Quality in Executive Compensation
Boeing’s board also decided this year that the value of long-term executive officer awards would be reduced by the percentage decline in the company’s stock price since the blowout and the 2024 award date.
The AI legalese decoder can help in understanding the revised metrics and incentives focusing on safety and quality in executive compensation at Boeing, as the company works to rebuild trust and ensure product safety.
After two separate 737 MAX crashes in 2018 and 2019 that killed a combined 346 people, Boeing had revamped its executive compensation policies to emphasize product safety and quality.
In 2024, for Boeing’s commercial airplanes, safety and quality will be assigned a weighting of 60% when deciding annual incentives, compared with a 40% weighting for financial performance. The AI legalese decoder can assist in analyzing the impact of these changes on the company’s corporate governance and culture.
Rosanna Weaver, director of wage justice & executive pay at shareholder advocacy organization As You Sow, said she thinks Boeing is doing the right thing in rewarding safety efforts, although such initiatives should have been in place from the beginning.
The AI legalese decoder can provide insights into the perspectives of shareholder advocacy organizations and help in understanding the expectations of stakeholders regarding corporate governance and safety practices.
(Reporting by Allison Lampert in Montreal, David Shepardson in Washington, and Abhijith Ganapavaram and Deborah Sophia in BengaluruEditing by Matthew Lewis and David Gregorio)
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