Boeing Boosts Payouts to CEO and GE Recruit -- Update
March 17 2017 - 5:07PM
Dow Jones News
By Doug Cameron
Boeing Co. said Friday that its chief executive's total
compensation rose 14% last year while the new head of its
commercial jetliner unit received almost $21 million after moving
from General Electric Co. in November.
Dennis Muilenburg secured $15.1 million in pay and benefits in
his first full year as CEO compared with $13.2 million in 2015
after assuming the top job in July of that year, according to a
regulatory filing, with most of the advance in the form of higher
incentive, pension and perquisite payments.
New Commercial Airplanes unit CEO Kevin McAllister received
total compensation of $20.9 million after joining from GE, where he
headed the company's aviation-services business. Mr. McAllister
received a $2 million cash signing bonus and $17.8 million in stock
awards, the bulk of which replaced a GE retirement plan and
unvested GE options.
Mr. Muilenburg's compensation boost following his elevation to
CEO comes despite Boeing reporting another drop in profit last
year, while its workforce was trimmed by almost 7%.
Boeing has targeted cost cuts as it fights competition for jet
deals from rival Airbus SE that investors worry will hurt its
operating margins. It shed more than 10,000 net jobs last year and
more than 20,000 over the past five as its head count fell to
150,500 at the end of 2016, with cuts mostly at its jetliner arm.
Its defense business, like that of peers, shrank to adapt to a
smaller Pentagon procurement budget.
The Machinists' union said Boeing on Friday issued notice of an
unspecified number of compulsory layoffs that would start in May,
having already secured voluntary cuts of 1,800 staff following a
round announced in December. Boeing didn't immediately respond to a
request for comment.
The timing of the move could add to Boeing's already complex
relationship with a new U.S. administration heavily focused on job
creation.
Boeing is the largest U.S. exporter and the second-largest
supplier to the Pentagon, and Mr. Muilenburg has held several
meetings with President Donald Trump over the cost of defense
equipment and broader manufacturing policy
Mr. Muilenburg's base salary increased to $1.65 million from
$1.35 million, up from $1.14 million in 2014. Nonequity incentive
payments rose to $6.4 million from $4.6 million.
Boeing reported a second-consecutive drop in profits last year
with a 5.4% decline driven by charges on some commercial and
military programs, though sales also dipped.
Its shares underperformed the sector for much of the year before
a fourth- quarter surge helped them gain almost 8% during 2016 as
Boeing also bought back $7 billion in stock. The shares are up
almost 16% so far this year.
Mr. Muilenburg has revamped Boeing's senior staff with the
recruitment of Mr. McAllister and the promotion of Leanne Caret to
lead its defense and space arm, and is also establishing a
stand-alone services arm to target an addressable market of $50
billion a year where it has only a small share.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
March 17, 2017 16:52 ET (20:52 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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