- Boeing’s CEO, David Calhoun, will enjoy a massive payday when the Boeing 737 MAX returns to service.
- His compensation package includes bonuses that will activate when the plane is ungrounded.
- Is Boeing incentivizing Mr. Calhoun to rush the 737 MAX back into service and put profits over safety?
Despite criticism from U.S lawmakers, Boeing CEO David Calhoun stands to enjoy a massive payday when the grounded 737 MAX returns to service. That’s because of special clauses in the executive’s compensation agreement that give him multi-million dollar bonuses when he achieves several milestones.
Tying Calhoun’s pay to the Boeing 737 MAX could incentivize him to push the plane back into service, even before it is ready. Although the plane has been grounded since March 2019, regulators in the U.S and Europe are still finding problems with the embattled jet that has already killed 346 people in two fatal crashes.
Is Boeing incentivizing the sort of bad behavior that led to this mess in the first place? Several U.S lawmakers think the answer is yes.
David Calhoun Enjoys a Massive Salary
David Calhoun, who took over from Boeing’s (NYSE:BA) ousted CEO Dennis Muilenburg, enjoys a fat salary. The company gives Calhoun a base pay of $1.4 million on top of an incentive award potentially valued at 180% of his already large income. That’s on top of two additional long-term incentive awards targeted at 500% of base salary and $7 million flat.
Calhoun will earn the $7 million cash incentive award upon completion of what Boeing calls “several key business milestones.” These milestones include the “full safe return to service of the 737 MAX”.
But that’s not all.
In addition to the already massive list of bonuses,