Connect with us

Politics

Boeing CEO to forgo equity pay and bonuses amid 737 Max scandal

Published

on

  • Boeing CEO Dennis Muilenburg will forgo most of his pay for 2020, the company’s chairman said Tuesday. 
  • Muilenburg was grilled by lawmakers last week about his nearly $15 million in 2018 pay amid the company’s ongoing 737 Max scandal. 
  • The plane has now been grounded around the world for nearly a year following two deadly crashes that have called into question how the plane was ever certified to fly. 
  • Visit Business Insider’s homepage for more stories.

Boeing’s chief executive will forgo a major portion of his compensation as the planemaker works to return its troubled 737 Max plane to the sky following two deadly crashes and a worldwide grounding.

The company’s chairman, Dave Calhoun, told CNBC Tuesday that CEO Dennis Muilenburg called him early Saturday morning following a busy week on Capitol Hill in which Muilenburg was grilled by lawmakers over his pay.

“It came in 2 fronts,” Calhoun told the network. “No short, no long-term bonus, and no consideration for equity grants until the Max in its entirety is back in the air and flying safely.”

That could mean no equity compensation — a majority of the executive’s nearly $15 million of pay in 2018 — until at least 2021, Calhoun said.

In 2018, Muilenburg ‘s pay rose 27% from the previous year, consisting of $1.7 million in salary and a $13 million bonus, according to regulatory filings.

Speaking to House and Senate lawmakers across two days of contentious hearings last week, Muilenburg was grilled on his pay, and urged to take a pay cut by some.

“These families lost their loved one’s lives,” Rep. Steve Cohen of Tennessee heatedly told Muilenburg, gesturing to the family members in the gallery, “and you won’t take a pay cut?”

Dennis was very uncomfortable in that situation,” Calhoun said of the exchange. “Dennis, more than anything, walked out of the evening in between the two hearings, where he listened for several hours to every story that the victims families presented to him, changed him for life. Now he’s got it in his core, and in his bones. It’s had a tremendous impact.”

The appearances before the two committees were Muilenburg ‘s first public testimonies since the two jets crashed in October 2018 and in March. Each flight crashed within minutes of taking off. A combined 346 people were killed. Both crashes have been attributed to an automated system known as MCAS, or Maneuvering Characteristics Augmentation System.

The company is now focused on rectifying the 737 Max for flight, after which it will have to work with customers to return their grounded planes and deliver finished planes to waiting customers.

Despite the now full year of crisis, Boeing’s board remains completely in support of Muilenburg, who started at the company as an intern, Calhoun said.

From the vantage point of our board,” he said, “Dennis has done everything right.”

Continue Reading
Advertisement Find your dream job

Trending