Boeing paid $513 million in annual bonuses to 64,000 Washington employees, much of it this week in paychecks, a substantial boost to the economies in King and Snohomish counties.
Company-wide, Boeing paid out $1.2 billion in pretax annual bonuses to just over 143,000 employees.
Members of the Machinists’ Union, who were paid their bonuses last month, saw them cut significantly compared to last year. White-collar workers, paid on Thursday and including engineers’ union members, fared better.
However, those of Boeing’s defense division received significantly lower bonuses than those of the other business units.
Separately, on Friday, an annual regulatory filing revealed the compensation given to Boeing’s top executives in 2022, a year in which Boeing lost $5.1 billion, its fourth straight year of losses.
The filing shows that Boeing’s board of directors was forced to cut a $7 million grant awarded to CEO Dave Calhoun when he took the job in 2020 provided he met certain performance goals. Important targets were missed.
Still, Calhoun did well. He received $22.5 million in total compensation last year, 154 times the $145,000 salary of the average Boeing employee.
In Friday’s filing, despite the need for that $7 million cut, the board expressed its continued confidence in Calhoun’s leadership.
Last month, it awarded him shares — not contingent on the company’s performance and worth $15 million at the current price — which will vest in installments over the next three years.
Stan Deal, CEO of the local Commercial Airplanes division received total compensation of $8.8 million last year.
Annual bonuses
The amount of Calhoun or Deal’s annual bonuses paid out this month will not be known until this time next year. Friday’s filing shows that their bonuses for 2022 were $3.4 million and $1.7 million, respectively.
For other employees, the company disclosed total amounts, and unions provided the average bonuses their members received.
For all white-collar employees, these annual bonuses are based on a combination of financial and operational performance measures for the previous year.
The main financial metric taken into account in the annual bonus calculation – free cash flow – was $2.3 billion in 2022, the first positive annual cash flow result since 2018.
In addition, operational performance is assessed against five metrics: product safety; worker safety; quality; reduction of energy consumption; and equity, diversity and inclusion.
The objectives in the field of safety and quality of the employees were not achieved in 2022, the other three objectives were.
Financial performance differed by business unit. As a result, employees of the Defense and Space division, who performed poorly last year, will receive 71% of their target bonus.
In contrast, Commercial Airplanes employees get 116%; those in the Services unit 148%; and own employees 111%.
For approximately 15,600 members of the Society of Professional Engineering Employees in Aerospace, the bonus for meeting the target was set at 5% of their salary for 2022. Depending on which business unit they are in, they will receive 71%, 116%, 148 % or 111% of that amount.
As a result, this week SPEEA engineers received an average pre-tax bonus of just $7,700, while SPEEA engineering personnel received an average of $5,900.
The bonuses of the 26,000 members of the International Association of Machinists Union at Boeing are calculated purely on the basis of safety, productivity and quality.
Last month they received an annual bonus equal to just 3.6% of their total salary in 2022, much lower than the 5.8% bonus awarded last year and well below the 6% maximum payout allowed in the union contract.
That gives operators an average bonus of about $2,700.
IAM spokesperson Deirdre Kaniewski said the disappointing bonus was because the machinists are “required to make improvements over previous years’ progress.”
“Our members are measured more rigorously than any other group, and they deserve recognition for their success on the factory floor,” Kaniewski said via email. “We will continue to look for ways to recognize our worth.”
The average bonus paid in Washington was more than $8,000 before tax, a figure boosted by higher payouts to managers and executives.
For them, the cash portion of their bonuses is based on similar scores to those of other employees, but with a much higher salary percentage as bonus for meeting the target.
Boeing leadership 2022 compensation
Calhoun’s total 2022 compensation of $22.5 million includes stock awards that will vest in the future. His actual net salary last year, consisting of base salary, annual bonus, and previously awarded shares that vested in 2022, was $7 million.
The much lower take-home pay figure is because most of the long-term executive bonus plan awarded three years earlier was contingent on the company’s financial performance. Due to the losses, it paid zero to all executives for the third year in a row.
The company’s board in the filing made it clear that it had no choice but to stop the $7 million grant awarded to Calhoun in 2020. That award was conditional on a series of targets to be “substantially achieved” by the end of this year.
Those include:
- Returning the 737 MAX to Service — Review.
- Completion of crewed Starliner spaceflight – Not yet.
- Bringing the 777X into passenger service — 2025 at the earliest.
The board wrote that it was “forced by the clear terms” set in 2020 to decide that Calhoun will not get the $7 million.
However, the board blamed that outcome for the effect of the pandemic more than Calhoun did, highlighting its confidence in his leadership.
“The Board recognizes and appreciates Mr. Calhoun’s leadership and many actions over the past three years to navigate an ever-changing environment,” the filing said.
Accordingly, the board of directors last month awarded Calhoun a special retention bonus of 25,000 shares, worth $5.4 million at the current share price, to remain for two more years — half in early 2024 and half in early 2025.
That was in addition to a same-day long-term incentive award of more than 44,600 shares, worth $9.6 million at current price, to be paid out in early 2026.
The 2022 compensation of the five highest-paid executives under Calhoun was also set out in Friday’s filing.
The Chief of Commercial Airplanes Deal’s total compensation package of $8.8 million made him the second highest paid executive. Deal’s actual net salary in 2022 was $3.3 million.
Total compensation for 2022 for the other executives listed was:
- Chief Financial Officer Brian West: $8.6 million
- Former Defense and Space CEO Leann Caret: $6.6 million
- New Defense and Space CEO Ted Colbert: $6.2 million
- Chief Legal Officer Brett Gerry: $6.2 million
But on Friday, a front-line Boeing employee blasted all those numbers.
Becky Bell, a 36-year-old Boeing employee who works in Auburn supply procurement, claimed a state lottery prize of $755 million.
In the announcement on Friday, a state lottery official said Bell bought the winning lottery ticket when she saw the jackpot hit $747 million just days after Boeing delivered its last 747 jumbo jet.
Bell chose to take the $404 million Powerball jackpot cash option, taking home about $310 million after tax.
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