Inside Boeing CEO's Controversial $32.8 Million Pay Package | Entrepreneur - Latest Global News

Inside Boeing CEO’s Controversial $32.8 Million Pay Package | Entrepreneur

Opinions expressed by Entrepreneur contributors are their own.

Boeing CEO David Calhoun’s tenure has been marked by serious failures in quality control, poor leadership and poor performance. In the opinion of many, his announced departure at the end of 2024 cannot come soon enough. Amid these crises, the proposed $32.8 million pay package for Calhoun is not only unwarranted, but also an affront to all stakeholders demanding accountability and change.

Under Calhoun’s leadership, Boeing has faced a series of safety problems and lawsuits, including a mid-air door stopper burst on an Alaska Airlines flight that led to the temporary grounding of its 737 Max jets, and a Federal Aviation Administration investigation. These incidents highlight a broken safety culture that has sparked outrage among consumers, investors and lawmakers alike.

Related: Crisis management lessons from Boeing’s in-flight bankruptcy

Institutional Shareholder Services (ISS) and Glass Lewis & Co. are right to urge Boeing investors to vote against Calhoun’s excessive pay package. During Calhoun’s tenure so far, Boeing stock has fallen more than 45% (price as of May 13, 2024), yet he is expected to receive a 45% raise.

Rewarding leadership failures sends the wrong message and undermines efforts to hold the company accountable for its shortcomings. Glass Lewis’ call to reject the re-election of Calhoun and two other directors responsible for overseeing the company’s safety practices underscores the urgent need for leadership reform.

Employees who have suffered the consequences of these quality control problems and the resulting business interruptions would rightly be upset about Calhoun’s proposed pay increase. As the workforce faces uncertainty and stress, the fact that their boss receives a massive raise amid the unrest only increases their frustration and weakens morale. It shows a discrepancy between corporate management and the everyday reality of Boeing employees.

Related: Boeing was found to have violated a $2.5 billion settlement agreement

Rewarding Calhoun with a significant raise suggests Boeing is indifferent to the serious operational and safety deficiencies under his watch. Instead of rewarding failure, Boeing’s board should focus on leadership that prioritizes transparency, accountability, safety and excellence.

My opinion

Boeing leadership can benefit from adopting a proactive and honest communications strategy. Regular updates, direct engagement with employees, investors and the public, and a clear plan to address and resolve security issues are critical. This approach is not just about managing perceptions; It’s about rebuilding trust from within. If the CEO fails and gets paid, the same goes for the employees, right?

Seriously, how do you approach a workforce with this kind of information? This is not real leadership and the employees notice it. When voting against the raise, communicate not only with words but also with actions. With Calhoun’s resignation, Boeing has a chance to realign its leadership and restore its reputation. Investors are encouraged to reject the current compensation package proposal and instead invest in leadership that requires a commitment to excellence. Excellence is rewarded, not failure.

It’s okay to let Mr. Calhoun down, but would you do the same for your employees to get rich off poor performance?

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