Boeing CEO could walk away with $24m compensation after quitting amid safety scandals

Boeing CEO Dave Calhoun could walk away with a $24m compensation package after quitting following a string of incidents that have sparked major safety concerns.

Mr Calhoun announced on Tuesday he would be resigning from his role as CEO at the end of the year following what he described as a “watershed moment” for Boeing after a panel on the side of an Alaska Airlines plane blew out mid-flight.

The shocking incident has resulted in investigations from the Federal Aviation Administration, the Department of Justice, and the National Transportation Safety Board.

“We must continue to respond to this accident with humility and complete transparency. We also must inculcate a total commitment to safety and quality at every level of our company,” Mr Calhoun wrote in a memo posted on Boeing’s website.

The incident led to the grounding of all Boeing 737 Max 9 aircraft, with a preliminary investigation finding that several critical bolts had been missing from the panel before take-off, calling into question Boeing’s manufacturing practices.

The company’s share price also fell by nine per cent following the incident.

Boeing CEO Dave Calhoun could get $24m compensation package after quitting (Getty Images)
Boeing CEO Dave Calhoun could get $24m compensation package after quitting (Getty Images)

But Boeing’s problems did not start or end with the Alaska Airlines incident. The company has been embroiled in previous safety concerns over the 737 Max 8 after two of the planes crashed in 2018 and 2019 resulting in the deaths of all passengers and crew.

But despite the company’s previous scandals, Mr Calhoun will likely leave his job with a sizeable payout, according to reports.

The Boeing CEO is reportedly guaranteed around $24m when he steps down, thanks to shares he owns and additional stock options.

Mr Calhoun holds nearly 70,000 Boeing shares outright, more than 25,000 phantom shares, and another 175,000 options, Ben Silverman, vice president of research at financial software company VerityData, told Fortune.

Based on the current stock price, Mr Calhoun could rake in $19.2m in payouts over the next ten years.

Meanwhile, if his departure is considered a retirement, he would be entitled to an additional $5m payout based on a portion of restricted stock.

Following the announcement of his resignation, in an interview with CNBC, Mr Calhoun partly blamed his departure on his age, but insisted his decision to step down was “100 per cent” his own.

“I’ve entered my fifth year,” he said, referring to his time at Boeing. “At the end of this year, I’ll be close to 68 years old.”

But it is still uncertain if his departure will be considered a retirement after Boeing’s board extended the CEO’s mandatory retirement age from 65 to 70 in 2021.

A Boeing spokesperson told The Independent that details of Mr Calhoun’s compensation package will be shared “in the coming weeks.”

Mr Calhoun was paid a base salary of $1.4m in 2022, according to an April regulatory filing. The same year, he made $22.5m overall, Business Insider reported, owing to his stock position.

However, the Boeing CEO missed out on a $7m bonus last year after failing to get Boeing’s new 777X aircraft into service by the end of 2023.