Boeing CEO makes $21 million on paper, pockets just $269,321

Boeing Co. Chief Executive Officer Dave Calhoun got total compensation of $21 million last year, but his take-home pay was a small fraction of that as the planemaker slogged through a deep crisis caused by the coronavirus pandemic.

When Covid-19 sent the aviation industry into the sharpest decline on record last March, Calhoun waived his salary for the rest of the year as well as a guaranteed bonus—thus forgoing pay of about $3.6 million. In the end, he pocketed $269,321 in salary and got a similar amount in perks, Boeing said Friday in a proxy statement.

The gap with Calhoun’s official pay reflects the potential gains he could reap if he stays in the job and Boeing achieves key milestones. The vast majority of his compensation came from grants he got when he took the CEO role at the start of the year. That includes $10 million of equity to replace deferred pay from his former employer, and $7 million tied to the return of the 737 Max and other goals. During the year, he also got a $3.5 million long-term stock award.

None of the awards has vested yet. The equity will be paid out in three equal installments over a three-year period, provided Calhoun, 63, remains at the company.

For him to get the performance award, Boeing must reach milestones that include a successful spaceflight with astronauts aboard the company’s much-delayed Starliner capsule. And the long-term grant pays out in 2023, based on certain conditions.

Aircraft Investment

The CEO reflected on one of the toughest years in Boeing’s history, addressing shareholders in the company’s annual report, which was also released Friday. The Chicago-based company went on a crash diet after burning through $20 billion in cash, while debt soared to $65 billion. Boeing is eliminating 30,000 jobs over two years, jettisoning real estate, taking a hard look at its investments and trying to reset its sometimes-tense relationships with suppliers.

Despite the turmoil, Calhoun vowed to continue investing in new aircraft. Airbus SE, already the leader in the crucial market for single-aisle planes, has been scoring sales of a new longer-range version of its popular A321neo jet.

“We cannot afford to be solely focused on the present,” Calhoun wrote. “We must dig even deeper to uncover new ideas and drive substantial innovation, because our customers have escalating performance expectations while our competitors will not sit still for a minute.”

Funds plowed into research and development will lead to “next-generation aircraft that will offer higher performance while being more efficient,” he said. “This prospect sits at the center of our long-term demand chain. It is upside opportunity for Boeing.”