Boeing ex-CEO gives up bonus but still leaves with $84m

Mr Dennis Muilenburg, who had been Boeing's CEO since 2015, was fired from the job last month.
Mr Dennis Muilenburg, who had been Boeing's CEO since 2015, was fired from the job last month.

No severance pay for Muilenburg, who was fired last month, in wake of 737 Max crisis

WASHINGTON • Boeing's ousted chief executive officer Dennis Muilenburg is leaving the company with US$62 million (S$84 million) in compensation and pension benefits but he will not receive any severance pay in the wake of the 737 Max crisis.

Mr Muilenburg was fired from the job last month as Boeing failed to contain the fallout from two fatal crashes that halted output of the company's best-selling 737 Max jetliner and tarnished its reputation with airlines and regulators.

The compensation figures were disclosed in a regulatory filing late on Friday, during a difficult week for Boeing when it also released hundreds of internal critical messages - major issues hanging over the company before new CEO David Calhoun starts tomorrow.

The messages contained harshly critical comments about the development of the 737 Max, including one that said the plane was "designed by clowns who, in turn, are supervised by monkeys".

The 737 Max has been grounded since March following the second of two crashes that together killed 346 people within a span of five months.

"It is incredibly heart-wrenching to see the man at the heart of our loss walk away with a reward," said Ms Zipporah Kuria, whose 55-year-old father from Kenya died in the second crash.

Lawmakers also blasted Boeing.

"(A total of) 346 people died. And yet, Dennis Muilenburg pressured regulators and put profits ahead of the safety of passengers, pilots and flight attendants. He'll walk away with an additional US$62.2 million. This is corruption, plain and simple," US Senator Elizabeth Warren said on Twitter.

US Representative Peter DeFazio, who chairs the House Transportation Committee, said minutes of a June 2013 meeting showed that Boeing sought to avoid expensive training and simulator requirements by misleading regulators about an anti-stall system called MCAS that was later tied to the two crashes that killed nearly 350 people.

Speculation that Mr Muilenburg would be fired had been circulating in the industry for months, intensifying in October when the board stripped him of his chairman's title - although he had also twice won expressions of confidence from Mr Calhoun, who took over as Boeing's board chairman.

A turnaround veteran and former General Electric executive who has led several companies in crisis, Mr Calhoun will receive a base salary at an annual rate of US$1.4 million and is eligible for US$26.5 million in long-term incentive compensation, Boeing said in a filing.

 
 
 
 

In November, Boeing said Mr Muilenburg had volunteered to give up his 2019 bonus and stock awards. For 2018, his bonus and equity awards amounted to some US$20 million, according to filings.

In addition to the US$62 million in compensation and pension benefits, Mr Muilenburg holds stock options that vested in 2013, Boeing said. They would be worth US$18.5 million at Friday's closing price.

"Upon his departure, Dennis received the benefits to which he was contractually entitled and he did not receive any severance pay or a 2019 annual bonus," Boeing said in a statement.

Mr Muilenburg was named Boeing CEO in 2015 and presided over a rapid rise in the Chicago-based company's stock price.

The shares have dropped 26 per cent in the past 10 months, however, as the Max's recovery stalled.

Months before Mr Muilenburg's ouster, some lawmakers and relatives of passengers who died in the Max crashes had asked him to resign or take a cut in pay.

At a congressional hearing in October, Mr Muilenburg parried questions about his compensation by saying it was set by Boeing's board.

A few days after the hearing, he announced he would not take a bonus for last year - that he would walk away from "tens of millions" of dollars as a signal that he was taking responsibility for correcting problems with the Max.

REUTERS, ASSOCIATED PRESS

A version of this article appeared in the print edition of The Sunday Times on January 12, 2020, with the headline 'Boeing ex-CEO gives up bonus but still leaves with $84m'. Print Edition | Subscribe