Prior to the approaching annual shareholders meeting on April 18, 2023, the Board of Directors of Boeing released a proxy statement that included information about the company’s 2022 financial results, including the compensation given to its CEOs.
We continued to make great progress in 2022 in ensuring that our culture, procedures, and systems always match the highest standards, stated Lawrence Kellner, an independent chair of Boeing, in the opening sentence of the statement. Notwithstanding challenging macroeconomic conditions, we are overcoming recent obstacles, de-risking our company, and regaining the operational and financial strength you expect from Boeing.
Kellner emphasized that in 2022 the business attained a positive net cash flow for the first time.
“Safety remains important, and we have taken efforts across Boeing to further reinforce our safety culture and to meet our commitments to people who depend on the safety of our products,” added Kellner.
Calhoun was successful in guiding the factory toward the desired outcome, and this year was the first time since 2018 that the manufacturer had a positive net flow. Due to his failure to put the 777X into service by the end of 2023, the CEO did not get a supplemental reward.
Nevertheless, the statement stated that one of the objectives was the 777X’s successful entrance into service and production/delivery ramp-up by December 31, 2023. Although largely due to factors outside of Mr. Calhoun’s control, it is obvious that this objective will not be achieved.
“Despite this decision, which the Compensation Committee believes is necessitated by the supplemental award’s explicit terms, the Board acknowledges and greatly appreciates Mr. Calhoun’s leadership and numerous actions over the last three years to navigate through a constantly changing environment to best position the Company for the future, and without regard for the impact his decisions may have had on goals that were set before the widespread onset of COVID and the c
A crewed Starliner flight, the completion of the Boeing Global Services (BGS) long-term business plan, the safe return to service of the 737 MAX-7 and MAX-10 aircraft, the realignment of engineering functions, and other objectives related to the defense program are among the other objectives Calhoun must accomplish by the end of 2023.
Additionally, Calhoun was tasked with leading and meeting targets for a joint venture with the Embraer aircraft company of Brazil. However, Embraer’s failure to “satisfy the essential conditions” led to Boeing terminating the contract in April 2020.
When Calhoun was hired in 2020, these objectives were set, and these performance-based Restricted Stock Units (RSU), a type of stock-based remuneration given to employees of a corporation, had a grant date value of more than $7 million. His base salary of $1.4 million did not change in 2022, but Calhoun’s annual incentive target for that year, which was $2.8 million, increased to $3.4 million as a result of a decision made by the Compensation Committee in February 2023.
When former Boeing CEO Dennis Muilenburg failed to successfully reintroduce the company’s best-selling product, the 737 MAX, into service following the groundings in March 2019, Calhoun took over as CEO of Boeing in January 2020. December 2020 saw Muilenburg’s dismissal.
