Boeing’s embattled chief executive, Dennis Muilenburg, has waived multi-million dollar bonuses and share awards, in a bid to restore confidence in his leadership after two fatal crashes involving the company’s newest jet, the 737 Max.
David Calhoun, who became chairman last month after Mr Muilenburg was stripped of the role, said the Boeing chief had offered to waive his performance awards at the weekend following meetings with families of the 346 victims who died in the crashes.
The gesture comes after members of Congress called on Mr Muilenburg to resign and fiercely criticised his pay in two days of intense questioning over Boeing’s responsibility for the crash of both Lion Air flight 610 in October last year and Ethiopian Airlines Flight 302 in March 2019. Investigators have pointed to the anti-stall system on the 737 Max as a significant factor in the incidents.
Despite the Lion Air crash, Mr Muilenburg was awarded the highest pay of his tenure at $23.4m in 2018, up from $18.5m the year before. The package included a $13m cash award reflecting short and long-term performance, and a grant of shares valued at $7m.
Mr Muilenburg will now only be entitled to his base salary for 2019, which was $1.7m last year.
Mr Calhoun told CNBC that Mr Muilenburg had also waived rights to any share award “until the 737 in its entirety is in the air and flying safely”. This could mean no equity payout before 2021, he said.
Boeing is under fire over its approach to safety in the production of the 737 Max, a variant of its best-selling single-aisle jet. Documents were produced by various members of the congressional committees interrogating the chief, which showed Boeing employees had raised concerns about the anti-stall system known as MCAS long before the aircraft went into service in 2017.
On several occasions during the congressional testimony, Mr Muilenburg struggled to respond to heated criticism of his remuneration.
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When called on by Angela Craig, a Democratic representative from Minnesota, to promise to give up all share awards for 2019, Mr Muilenburg refused to answer the question directly. Saying it was a decision for the board, Mr Muilenburg insisted: “It is not about the money for me?.?.?.?I anticipate this year’s bonus cycle will be zero.”
Mr Calhoun said the situation had clearly been “very uncomfortable” for Mr Muilenburg. However, a two-and-a-half hour meeting with victims’ families after the first day of testimony had “changed his life”, the chairman said.