What is the significance of the long-term incentive award for the new CEO, David L. Calhoun, that is tied to the 737 MAX return to service?

This award underscores the company's immediate priority to resolve the 737 MAX crisis. Tying a significant portion of the CEO's compensation to the safe return to service of the aircraft demonstrates the board's commitment to addressing this critical issue and aligning executive incentives with a key operational and financial recovery milestone.

Did the former CEO, Dennis A. Muilenburg, receive any severance package?

No, the filing explicitly states that Dennis A. Muilenburg is not entitled to and did not receive any severance or separation payments in connection with his retirement. He also forfeited a significant amount of unvested equity awards.

What was the total estimated value of compensation and benefits for former CEO Dennis A. Muilenburg?

Based on the closing stock price on January 9, 2020, and assuming target performance for certain awards, Mr. Muilenburg's vested long-term incentive awards were valued at approximately $29.4 million. He is also entitled to pension and nonqualified deferred compensation benefits valued at approximately $28.5 million as of December 31, 2019, and vested stock unit awards valued at approximately $4.3 million.

What was the compensation for Kevin G. McAllister upon his departure?

Kevin G. McAllister forfeited equity awards valued at approximately $52.9 million. In connection with his separation, he received a lump sum cash payment of $14.75 million, which was designed to approximate the value of a pension benefit he forfeited from a previous employer. He received no other compensation from Boeing.

BA/BA-PA 8-K: Leadership Changes

Summary

This 8-K filing by Boeing Co. (BA) on January 10, 2020, primarily details the compensation arrangements for its new President and Chief Executive Officer, David L. Calhoun, who officially took the helm on January 13, 2020. Investors should note the significant long-term incentive awards granted to Mr. Calhoun, including a $7 million award tied to key business milestones, notably the safe return to service of the 737 MAX. This highlights the company's immediate focus on resolving the 737 MAX issue and reinstating its operational and financial health. The filing also provides clarity on the compensation and benefits for former CEO Dennis A. Muilenburg and former EVP of Boeing Commercial Airplanes Kevin G. McAllister. Notably, Mr. Muilenburg received no severance pay and forfeited substantial unvested equity awards, while Mr. McAllister received a lump sum payment approximating a forfeited pension benefit. The compensation structure for the new CEO, particularly performance-based incentives linked to the 737 MAX, signals the board's priority in addressing the ongoing challenges and ensuring leadership alignment with shareholder interests.

Key Highlights

1David L. Calhoun appointed President and CEO, effective January 13, 2020, with approved compensation including a $1.4 million base salary.
2Mr. Calhoun's compensation package includes significant long-term incentive awards totaling 500% of base salary, plus an additional $7 million award contingent on continued employment and key milestones, including the 737 MAX safe return to service.
3A $10 million restricted stock unit award was granted to Mr. Calhoun to compensate for forfeited amounts from his prior employer.
4Former CEO Dennis A. Muilenburg received no severance payments and forfeited substantial unvested equity awards valued at approximately $14.6 million.
5Mr. Muilenburg is entitled to contractual retirement benefits and vested pro-rated portions of previously granted long-term incentive awards valued at approximately $29.4 million, plus pension and deferred compensation valued at approximately $28.5 million.
6Former EVP of Boeing Commercial Airplanes, Kevin G. McAllister, forfeited equity awards valued at approximately $52.9 million.
7Mr. McAllister received a $14.75 million lump sum payment to approximate a forfeited pension benefit from a previous employer, with no other separation compensation.
8Lawrence W. Kellner appointed Non-Executive Chairman with an annual cash retainer of $250,000.

BOEING CO 8-K Report, Executive Changes (Jan 10, 2020)

Summary

Key Highlights

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