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Over $60 Million In Departure Package For Boeing’s Ousted CEO Muilenburg


01/12/2020


Over $60 Million In Departure Package For Boeing’s Ousted CEO Muilenburg
The ousted Boeing CEO Dennis Muilenburg, who was fired by the board of the company for not being able to adequately handle the crisis after the grounding of the 7373 Max planes of the company, will walk away with a departure package of more than $60 million in pension benefits and stock, even though the ousted CEO was denied severance for his departure, the company announced this week.
 
The severe crisis that gripped the company following two fatal crashes within 5 months of each other involving the 737 Max plane in both the accidents and consequent global grounding of the planes, was not handled probably by Muilenburg and as such he was removed form his position by Boeing last month. A total of 346 passengers and crew were killed in the two crashes and despite attempts by the company to secure regulatory approval for allowing the 737 max planes to fly again, it was unable to un-ground the planes. This affected impacted the stocks of the company and Boeing was forced to halt production of the planes starting this month.
 
Muilenburg will be replaced on Monday by longtime board member Dave Calhoun.
 
Airline regulators, including the Federal Aviation Administration (FAA) of the United States, have repeatedly said that they do not have any definite timeline about when the 737 Max planes would be allowed to fly in the air again commercially. Airlines have been hit with more than $1 billion because of the grounding which is entering its 11th month. The grounding has also halted new sales of the jets.
 
The crashes and the grounding has also mad Boeing struggle to win back confidence of regulators and revamp its tarnished brand image.
 
A base salary of $1.4 million and a $7 million bonus payable on the “achievement of several key business milestones, including full safe return to service” of the planes would be given to Calhoun, Boeing said in the filing.
 
Muilenburg has spent most of his professional career at Boeing since he had joined the company as an intern. According to insiders of the company, the repeated issuing of forecasts about when the 737 Max planes would return to service by Muilenburg had exacerbated the crisis for Boeing because those forecasts had attracted rare public rebukes from the FAA.
 
“Mr. Muilenburg is not entitled to — and did not receive — any severance or separation payments in connection with his retirement after more than 30 years with the Company,” Boeing said in the filing. Muilenburg was also severely criticized by lawmakers for taking too long to accept blame in the crashes and for not being able to identify the safety risks of the planes that were the best sellers of the company sinece it was launched by Boeing in 2017.
 
Boeing said that stock worth $14.6 million will not be given to Muilenburg but will be awarded his entitlement to pension and stock benefits of about $62 million.
 
(Source:www.cnbc.com)