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14 January, 2020

Boeing’s new boss outlines primary focus, as former CEO denied severance payments

Los Angeles, United States - March 9, 2015: Boeing manufactuing facility. Boeing manufactures and sells aircraft, rotorcraft, rockets and satellites. It is the second-largest defense contractor in the world.

By Christian Fleetwood

The Boeing Company’s new president and chief executive officer says his primary focus is getting the 737 MAX back to service.

In an email to employees, David Calhoun – who began his tenure at the helm of Boeing on Monday – said returning the jet to service and rebuilding trust are his initial priorities for 2020, among others.

“This must be our primary focus. This includes following the lead of our regulators and working with them to ensure they’re satisfied completely with the airplane and our work, so that we can continue to meet our customer commitments,” he said of the 737 MAX.

Boeing president and CEO David Calhoun

“We’ll get it done, and we’ll get it done right.”

Boeing’s best-selling model has been grounded globally since March following the crashes of Lion Air Flight 610 and Ethiopian Airlines Flight 302, which killed a combined 346 people.

Calhoun replaces exiting president and CEO Dennis Muilenburg, who the board said resigned last month in a bid to restore confidence in the aircraft manufacturer.

“Many of our stakeholders are rightly disappointed in us, and it’s our job to repair these vital relationships,” Calhoun said.

“We’ll do so through a recommitment to transparency and by meeting and exceeding their expectations. We will listen, seek feedback, and respond — appropriately, urgently and respectfully.”

Calhoun enters the dual-role of president and CEO after more than a decade on Boeing’s board, and has been granted approximately $15.8 million ($US10.9 million) in annual target compensation.

Furthermore, Calhoun has also been granted two awards worth a combined $17 million, with one of them tied to operational milestones, such as a “full safe return to service of the 737 MAX,” according to a recent regulatory filing.

“I’m honored to lead the talented people of Boeing as we face our challenges,” he said.

“Working together, we will strengthen our safety culture, improve transparency and rebuild trust with our customers, regulators, suppliers and the flying public.

“With the strength of our team, I’m confident in the future of Boeing, including the 737 MAX.”

Meanwhile, former president and CEO Dennis Muilenburg will not receive severance or separation payments in connection to his “retirement” from the company, or a bonus for 2019.

According to Boeing’s recent regulatory filing, the forfeited awards would have been valued at approximately $21.14 million (US$14.6 million), while the vested long-term incentive awards would be valued at approximately $42.6 million (US$29.4 million).

This comes after Muilenburg’s exit from the company in December amid an ongoing battle to return the 737 MAX to service.

However, according to the regulatory filing, Boeing said he will receive distributions of pension and nonqualified deferred compensation benefits earned during his tenure.

These, including contributions made by Muilenburg, were valued at approximately $41.3 million (US$28.5 million) as of 31 December 2019, and vested in certain stock unit awards earned prior to his service as CEO.

Based on the closing stock price on 9 January 2020, these awards are valued at approximately $6.2 million (US$4.3 million).

Furthermore, Muilenburg also holds options to purchase “72,969 shares” of company common stock. These options, according to Boeing, have an exercise price of $75.97 and were vested in full in 2013, prior to Muilenburg’s service as president and CEO of the company.

To read more of Travel Weekly’s ongoing coverage of Boeing’s pursuit of a return to service for the 737 MAX, click here.

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737 Max boeing David Calhoun Dennis Muilenburg