Boeing offers Chief Executive $5.29M to stick with the company amid recovery
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On Friday, the Chief Executive of Boeing, Dave Calhoun, was awarded an incentive worth around $5.29 million. The company has given Calhoun this incentive to urge him to remain in the company as it goes through recovery.
Boeing offers $5.29M incentive to CEO
Boeing has been trying to recover from the effects of the COVID pandemic and the two 737 MAX crashes that led to the fleet being grounded by regulators in the United States. The grounding of these fleets led to Boeing losing a significant portion of its revenues. The crash started investigations into the automotive maker.
The company has, in recent years, tried navigating the waters to find ways to recover the revenues lost because of the pandemic and the crashes. On February 16, the board of directors at Boeing approved issuing 25,000 in restricted stock units to the Chief Executive.
The shares will be vested in two installments and will be issued to Calhoun during the grant’s first and second anniversaries. The incentive was revealed in a regulatory filing that the company filed.
This incentive shows that Boeing’s current board of directors might not be looking for a replacement for Chief Executive. His replacement is likely to happen in the mid of the current decade when the company is expected to go back to the production rates that were reported before the pandemic.
In the regulatory filing, Boeing said that the incentive showed that the board had confidence in the Chief Executive. The company also noted that Calhoun would continue leading as it sought to restore its financial strength.
“This retention grant reflects the Board’s continued confidence in Dave’s leadership and the direction of the company as we make important progress toward restoring our operational and financial strength, guided by our focus on safety, quality, and transparency,” the company said.
Boeing has witnessed a remarkable recovery in its share prices, up by almost 70% since early October. However, before the announcement, the company closed trading on Friday with a 55 cents drop in share price. The shares closed Friday at $211.66.
Calhoun’s tenure at Boeing
Calhoun was the chairman of Boeing before becoming the CEO in January 2020. In 2020 and 2021, he received a total compensation of $21.1 million. In 2021, the board agreed to award Calhoun a long-term incentive award target of $16 million.
In April 2021, Boeing increased the required retirement age from 65 to 70 so that Calhoun had more years at the top job. Calhoun is turning 66 in April this year. The award given to Calhoun by the Boeing board comes weeks after the company saw its first yearly positive cash flow since 2018.
Calhoun has prioritized having a fresh cash flow as a main financial target for the company. Boeing is looking to recover from the supply chain challenges created by the pandemic and to increase production. The company hopes the cash flow will increase from $2.3 billion in 2022 to between $3 billion and $5 billion in 2023.
