Boeing paid out $513 million in annual bonuses to 64,000 employees in Washington, much of it in the form of paychecks this week, a substantial boost to the economies of King and Snohomish counties.
Company-wide, Boeing paid $1.2 billion before taxes in annual bonuses to just over 143,000 employees.
Machinists’ union members, who received their bonuses last month, have seen them severely reduced from a year ago. White-collar workers, paid on Thursday and notably members of the engineering union, fared better.
However, those in Boeing’s Defense Division received significantly lower bonuses than other business units.
Separately, on Friday, an annual regulatory filing revealed compensation awarded to Boeing’s top executives in 2022, a year in which Boeing lost $5.1 billion, the fourth consecutive year of losses.
The filing shows that Boeing’s board was forced to cut a $7 million grant given to CEO Dave Calhoun when he took office in 2020 conditional on meeting certain performance targets. Key targets were missed.
Nonetheless, Calhoun did well. He received $22.5 million in total compensation last year, or 154 times the $145,000 salary of the median Boeing employee.
In Friday’s filing, despite the need for that $7 million cut, the board expressed continued confidence in Calhoun’s leadership.
Last month, he awarded him shares — not contingent on company 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 aircraft division, received total compensation of $8.8 million last year.
Annual bonuses
We won’t know the amount of annual Calhoun or Deal 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 disclosed the total amounts and the unions provided the average bonuses received by their members.
For all white collar employees, these annual bonuses are based on a combination of financial and operational performance measures for the previous year.
The primary financial metric considered 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 considered on the basis of five parameters: product safety; employee safety; quality; reduction of energy consumption; and equity, diversity and inclusion.
Employee safety and quality targets were not met in 2022, while the other three targets were met.
Financial performance varied by business unit. Thus, the employees of the Defense and Space division, who performed poorly last year, will receive 71% of their target bonus.
In contrast, commercial aircraft employees will get 116%; those of the Services unit 148%; and company employees 111%.
For approximately 15,600 members of the Society of Professional Engineering Employees in Aerospace, the bonus for achieving the goal has been set at 5% of their 2022 salary. Depending on the business unit they are in, they will get 71% , 116%, 148% or 111% of this amount.
The result is that SPEEA engineers received an average pre-tax bonus this week of just under $7,700, while SPEEA technical staff received an average of $5,900.
The bonuses of the 26,000 members of the Boeing International Association of Machinists union are calculated solely on criteria of safety, productivity and quality.
Last month they received an annual bonus equal to just 3.6% of their total 2022 salary, well below the 5.8% bonus awarded last year and well below the maximum payout of 6% authorized in the collective agreement.
This will provide an average bonus of about $2,700 for machinists.
IAM spokeswoman Deirdre Kaniewski said the disappointing bonus was because machinists “are required to make improvements over the progress of previous years”.
“Our members are measured more rigorously than any other group, and they deserve to be recognized for their success in the factory,” 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 high figure by higher payouts to managers and executives.
For them, the cash portion of their bonuses is based on a similar score as other employees, but with a much higher salary percentage set as a bonus for reaching the goal.
Boeing leadership compensation in 2022
Calhoun’s total compensation in 2022 of $22.5 million includes equity awards that will vest in the future. His actual net salary last year, consisting of base salary, annual bonus and previously awarded shares vested in 2022, was $7 million.
The much lower take-home pay figure is because much of the executive long-term incentive plan awarded three years earlier depended on the company’s financial performance. Because of the losses, for the third consecutive year, which paid nothing to all the executives.
The company’s board of directors in the filing made it clear that it had no choice but to cut the $7 million grant awarded to Calhoun in 2020. That award was contingent on a set of objectives which were to be “substantially achieved” by the end of this year.
Those included:
- 737 MAX Return to Service — Check.
- Complete a crewed Starliner spaceflight – Not yet.
- Put the 777X into passenger service – 2025 at the earliest.
The board wrote that it was “constrained by the clear terms” set in 2020 to decide Calhoun would not get the $7 million.
However, the board blamed the result on the effect of the pandemic more than on Calhoun, and underscored confidence in his leadership.
“The Board greatly recognizes and appreciates Mr. Calhoun’s leadership and his many actions over the past three years in navigating an ever-changing environment,” the filing said.
As a result, last month the board awarded Calhoun a special retention bonus of 25,000 shares, worth $5.4 million at the current share price, to stay on for two years. additional – half of this acquisition in early 2024 and the other half in early 2025.
This was in addition to a same-day long-term incentive award of more than 44,600 shares, worth $9.6 million at today’s price, which will be paid out in early 2026.
The 2022 compensation of the five highest-paid executives below Calhoun was also presented in Friday’s filing.
Commercial Airplanes chief Deal’s total compensation of $8.8 million made him the second-highest paid executive. Deal’s actual net salary in 2022 was $3.3 million.
The total compensation for 2022 of the other NEOs was:
- Chief Financial Officer Brian West: $8.6 million
- Former CEO of Defense and Space Leann Caret: $6.6 million
- New CEO of Defense and Space, Ted Colbert: $6.2 million
- General Counsel Brett Gerry: $6.2 million
On Friday, however, a frontline Boeing employee blew all those numbers.
Becky Bell, a Boeing employee of 36 years who works in Auburn in procurement, claimed a state lottery prize of $755 million.
Making the announcement on Friday, a state lottery official said Bell bought the winning ticket when it saw the jackpot hit $747 million just days after Boeing delivered its last 747 jumbo jet.
Bell elected to take the cash option of the $404 million Powerball jackpot and, after tax, won approximately $310 million.