Boeing paid out $513 million in annual bonuses to 64,000 Washington workers, much of it in paychecks, this week, a significant boost to the economies of King and Snohomish counties.
Company-wide, Boeing paid out $1.2 billion before taxes in annual bonuses to just over 143,000 employees.
Members of the Machinists’ Union, who were paid their bonuses last month, saw them cut sharply compared to last year. Officials, paid Thursday and including members of the engineering union, fared better.
However, those in Boeing’s defense division received significantly lower bonuses than those in the other business units.
Separately, an annual regulatory filing on Friday revealed the compensation paid to Boeing’s top executives in 2022, a year in which Boeing lost $5.1 billion, its fourth consecutive year of losses.
The filing shows Boeing’s board was forced to kill a $7 million stipend awarded to CEO Dave Calhoun when he took the job in 2020, contingent on meeting certain performance goals. Key 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, the board expressed continued confidence in Calhoun’s leadership, despite the necessity of that $7 million cut.
Last month, it gave him shares — not contingent on the company’s performance and worth $15 million at today’s prices — that 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.
We won’t know the size of Calhoun’s or Deal’s annual bonuses paid out this month until this time next year. Friday’s filing shows their bonuses for 2022 were $3.4 million and $1.7 million, respectively.
For other employees, the company published the total amounts, and the unions gave the average bonuses their members received.
For all salaried employees, these annual bonuses are based on a combination of financial and operational results for the previous year.
The most important financial target 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 based on five metrics: product safety; employee safety; quality; reduction in energy use; and equity, diversity and inclusion.
The employee safety and quality targets were not achieved in 2022, although the other three targets were achieved.
Financial results varied by business unit. As a result, employees in the Defense and Space Division, who performed poorly last year, will receive 71% of the target bonus.
In contrast, Commercial Airplanes employees will receive 116%; those in the service unit 148%; and company employees 111%.
For around 15,600 members of the Society of Professional Engineering Employees in Aerospace, the bonus for reaching the target was set at 5% of their salary for 2022. Depending on which business unit they are in, they will get either 71%, 116%, 148% or 111% of this amount.
As a result, SPEEA engineers received an average pre-tax bonus this week of just $7,700, while SPEEA technical staff received an average of $5,900.
The bonuses of the 26,000 members of the International Association of Machinists union at Boeing are calculated solely on safety, productivity and quality.
Last month, they were awarded an annual bonus equal to just 3.6% of their total pay for 2022, well down from the 5.8% bonus awarded last year and well below the maximum payout of 6% allowed in the union contract.
That would bring an average bonus of about $2,700 to machinists.
IAM spokeswoman Deirdre Kaniewski said the disappointing bonus was because the machinists “are required to make improvements on previous years’ progress.”
“Our members are measured more rigorously than any other group, and they deserve to be recognized for their success on the factory floor,” Kaniewski said via email. “We will continue to look for ways to recognize our value.”
The average bonus paid in Washington was more than $8,000 before taxes, a figure boosted by higher payouts to executives and managers.
For them, the cash part of their bonuses is based on a similar score to other employees – but with a much higher percentage of the salary set as a bonus for reaching the target.
Boeing leadership 2022 compensation
Calhoun’s total compensation in 2022 of $22.5 million includes awards of stock that will vest in the future. His actual take home pay last year, consisting of base salary, annual bonus and previously awarded stock that vested in 2022, was $7 million.
The much lower figure for take-home pay is due to the fact that the largest part of the long-term incentive plan for executives awarded three years earlier was contingent on the company’s financial performance. Because of the losses, for the third year in a row that paid out zero to all managers.
The company’s board of directors made clear in the filing that it had no choice but to kill the $7 million grant awarded to Calhoun in 2020. The award was contingent on a set of goals that had to be “substantially met” by the end of that year.
- Get the 737 MAX back into service — Check.
- Completing a crewed Starliner spaceflight — Not yet.
- Get the 777X into passenger service — 2025 at the earliest.
The board wrote that it was “compelled by the clear conditions” set in 2020 to decide that Calhoun will not receive the $7 million.
However, the board blamed this outcome on the effects of the pandemic more than Calhoun, emphasizing faith in his leadership.
“The board recognizes and greatly appreciates Mr. Calhoun’s leadership and many actions over the past three years to navigate an ever-changing environment,” the filing said.
Consequently, the board last month gave Calhoun a special retention bonus of 25,000 shares, worth $5.4 million at today’s share price, to stay on for two more years — half vesting in early 2024 and half in early 2025.
That was in addition to a long-term incentive award on the same day of more than 44,600 shares, worth $9.6 million at today’s price, which will be paid in early 2026.
The 2022 compensation of the five highest-paid executives under Calhoun was also laid out in Friday’s filing.
Commercial Airplanes CEO Deal’s total compensation package of $8.8 million made him the second-highest paid executive. Deal’s actual take home pay in 2022 was $3.3 million.
Total 2022 compensation for the other named executives was:
- CFO Brian West: $8.6 million
- Former defense and space chief Leann Caret: $6.6 million
- New defense and space chief Ted Colbert: $6.2 million
- Chief Legal Officer Brett Gerry: $6.2 million
On Friday, a front-line Boeing worker put all those numbers away.
Becky Bell, a 36-year-old Boeing employee who works in Auburn in supply procurement, claimed a $755 million state lottery prize.
With the announcement Friday, a state lottery official said Bell bought the winning ticket when she saw the jackpot reach $747 million just days after Boeing delivered its last 747 jumbo jet.
Bell chose to take the $404 million Powerball jackpot cash option and, after taxes, took home about $310 million.