Boeing CEO David Calhoun Earned $33 Million But Declined Yearly Bonus In 2023

Less than two weeks after Boeing’s President and Chief Executive Dave Calhoun announced that he would step down at the end of this year, new details have emerged about the executive’s salary. In a securities filing on Friday, the planemaker reportedly said Calhoun would not be considered for an annual incentive bonus of nearly $3 million.

It comes after the CEO’s salary figures showed that he received around $33 million in compensation last year, which was reportedly an increase of nearly 50% from 2022. Despite an undoubtedly problematic year so far, Calhoun is expected to take home over $40 million from just stock awards and other related options.

Honoring the request

The CEO was slated to receive a $2.8 million bonus in addition to his salary of $32.8 million for 2023. However, Boeing stated in its filing that the executive “declined” the bonus, according to the Hindustan Times.

“Following the Alaska Airlines incident, Mr. Calhoun declined to be considered for an annual incentive payout, and the Board honoured that request. Throughout his tenure, he has demanded transparency within Boeing and with our customers, regulators, and the flying public.”

A rough four-year stint

Calhoun, 66, has experienced challenges ever since taking on responsibility as the head of the largest aircraft manufacturer in the US. He became President and CEO in January 2020 – two months before the COVID-19 pandemic shuttered the industry. Upon his appointment, he also inherited Boeing’s already-troubled reputation and safety concerns following two deadly 737 MAX 8 crashes in 2018 and 2019 that subsequently led to a 20-month grounding of the aircraft type.

Photo: Boeing

According to CNN, Boeing has lost money every year since 2019. But as the industry has recovered from the pandemic, the company reduced its losses by 60% in 2023 and reported an operating deficit of only $1.8 billion. Its stock grew by 37% last year while it had a record month in new commercial aircraft orders in December as airlines raced to meet the strong demand for travel.

The satisfactory results in 2023 were short-lived, as Calhoun would endure more hurdles. The Alaska Airlines 737 MAX 9 door plug blowout incident (AS1282) occurred just five days into 2024, and the high-profile and potentially deadly incident prompted the Federal Aviation Administration to ground more than 170 examples of the aircraft type. Boeing, plagued with the issues of its best-selling narrowbody aircraft, has since been placed under the spotlight for quality control issues and has suffered a severely tainted reputation.

Photo: NTSB

Despite intense scrutiny, the company defended Calhoun’s response to AS1282.

“Mr. Calhoun has responded to this event in the right way by taking responsibility for the accident, engaging transparently and proactively with regulators and customers and taking important steps to strengthen Boeing’s quality assurance,” the filing said.

Long-term incentives

On March 25th, Boeing announced that Calhoun would remain as CEO through the end of the year before stepping down. The next CEO has yet to be announced.

Calhoun turns 67 later this month. Boeing’s board reportedly pushed back the retirement age for its CEOs by five years to allow him to stay in place. However, since he is past the age, he will get the full value of his long-term incentive bonuses, according to The Seattle Times.

Despite being reduced by more than 22% due to AS1282, Calhoun’s long-term bonus target is reportedly set for $13.25 million and will be paid throughout a three-year vesting period. Boeing’s filing also shows that he is eligible for 116,000 of the planemaker’s shares, worth $21 million at today’s stock price.