Boeing CEO Dave Calhoun is looking forward to collecting a huge $7million bonus if he can finally get the 737 Max jetliner off the ground and back in the sky. However, the CEO must also resolve several other issues before the company is going to part with the cash.
Calhoun's current to-do list includes resolving the production woes around the KC-46 tanker which has caused problems between the plane-maker and the Pentagon, as well as making sure the Boeing Starliner spacecraft can take its first manned flight.
These are pretty challenging issues but sadly not the only things on the long list of the CEO's must-fixes. Boeing now has another new jetliner, the 777X, which needs to get through the regulators and out onto the market.
There is also a pressing need to reach safety targets by restructuring the engineering corps and looking at achieving some other long-range targets including a joint venture with Embraer SA, the Brazilian plane manufacturer.
Boeing revealed in a filing that as part of the terms of his contract, signed in January, Calhoun must meet all these targets by December 2023 if he wants to receive the payout. That said, even if he fails Calhoun will not be on the breadline anytime soon. The 62-year-old CEO will be compensated annually to the tune of $10.9million and receive an additional $10million in stock.
Despite all the stipulations, the size of the bonus was still heavily criticized when Calhoun replaced Dennis Muilenburg as CEO after he failed to reach his target and get the Max back in the air. The aircraft was involved in 2 fatal accidents and remains grounded. On February 4th lawmakers asked Boeing to cancel the bonus completely to remove any incentive to rush the plane back into service. However, Boeing stipulates that the bonus will be recouped should any misconduct or safety breaches occur during the recommissioning of the craft.
In other areas of the business new directors have been selected for the Boeing board. These include Steve Mollenkopt, 51, who has been the head of Qualcomm since 2014 and enabled the organization to develop 5G technology. He is also the former CFO of United Technologies.
Also joining the team is Akhil Johri, 58. who spent four years as the CFO at United Technologies chief financial officer before stepping down in November.
The pair are bringing more technical know-how to the board; Mollenkopt with his electrical engineering background and Johri having worked for one of the company's main suppliers for the past 25 years.
The appointments come partly in response to criticisms that the company responded slowly to 2019's crisis because of an increasing focus on the financial sector.
The board has also overhauled the leadership as it looks towards improving its reputation in engineering.
At a time when Boeing is facing some challenges and vital decisions must be taken about the company's strategy and product quality, Muilenburg's resignation left the board with only 2 directors with any aviation experience – Calhoun, and Kellner.
Current chairman Kellner is the former Head of Continental Airlines. He has taken over from Calhoun who brings a wealth of experience from his time working in the aircraft engine division of the General Electric Company.