Boeing CEO Dave Calhoun is poised leave his post at the end of the year with a massive payout — despite a failed tenure capped by the Alaska Airlines door blowout that has devastated the company’s reputation.
The top executive at the embattled aerospace giant — which was already recovering from a pair of deadly 737 Max crashes when Calhoun took the top job in 2020 — will leave with $24 million in his pocket despite the fact that Boeing’s stock price is 43% lower compared to the day he took over as CEO.
If Calhoun’s successor manages to boost the firm’s share price by 37%, he would make an additional $45.5 million, according to a report.
An analysis of SEC filings showed that Calhoun holds 175,435 options whose exercise price is lower than the price of the company’s stock, according to Fortune.
Calhoun also holds 107,195 options that are priced at $258.83 a share and which expire in February 2031 and 68,240 options priced at $260.98 a share which expire in February 2032, according to Ben Silverman, vice president of research at Verity, a firm specializing in stock sales analysis.
As of Tuesday, Boeing’s stock price hovered around $188 a share.
That means Calhoun’s successor needs to turn the company’s fortunes around and get the stock price up by 37% so that he can cash out his options and walk away with $45.5 million.
If Calhoun’s exit is seen as a retirement, he would be entitled to a $5 million payout based on a portion of restricted stock that would vest, according to Silverman.
Boeing has declined to comment.
When Calhoun took over as CEO in January 2020, Boeing’s stock was priced at around $330 a share.
From 2020 through 2022, Calhoun earned $65 million in compensation, according to the company’s annual proxy statements filed with the Securities and Exchange Commission.
The company’s 2024 proxy statement hasn’t been made available as of Tuesday.
Calhoun’s compensation during his tenure is considered higher than companies that are considered Boeing’s competitors and peers, including Ford, 3M, Caterpillar and Microsoft.
According to Barron’s, CEOs of Boeing’s peer companies earned an average compensation of $25 million last year — this despite the fact that the stock prices of those companies have gained a little more than 13% a year over the course of the past five years.
In contrast, Boeing’s stock price has fallen by 50% during that five-year stretch, or around 12% on average.
Calhoun said Monday he will step down at the end of the year amid a wider shakeup that also includes the company’s chairman, Larry Kellner, and Stan Deal.
Kellner will step down from the board of directors in May while Deal, president and CEO of Boeing Commercial Airplanes, is resigning effective immediately.
Steve Mollenkopf, former CEO of tech giant Qualcomm, will be Boeing’s new board chairman, succeeding Kellner. He will oversee the search for Calhoun’s successor.
On Jan. 5, the rear door plug of a Boeing 737 Max 9 passenger plane operated by Alaska Airlines came loose in mid-flight – resulting in the FAA ordering the grounding of the same model of aircraft for weeks.
Calhoun — who fought back tears while “acknowledging our mistake” that caused the blowout at 16,000 feet and led to an emergency landing — reportedly encouraged airline CEOs to meet with the company’s board to air their frustrations over Boeing’s production problems.
