Democratic Senators Demand Boeing Scrap Bonus for New CEO
The senators pointed to the trove of incendiary internal messages and memos Boeing released last week.
(Bloomberg) -- David Calhoun’s first day leading Boeing Co. came with a blistering rebuke from Washington.
Three Democratic senators demanded the company scrap a $7 million potential bonus for the new chief executive officer, saying it shows the plane manufacturer still prioritizes profit over safety. The payment is linked to returning the 737 Max aircraft to service, ending a global flight ban that’s been in place since March in the wake of two deadly plane crashes.
“This payment represents a clear financial incentive for Mr. Calhoun to pressure regulators into ungrounding the 737 Max, as well as rush the investigations and reforms needed to guarantee public safety,” senators Edward Markey, Richard Blumenthal and Tammy Baldwin said Monday in a letter to Boeing’s board.
The lawmakers also said they’re “deeply disturbed” by former CEO Dennis Muilenburg’s exit package, which was disclosed on Friday only hours after a Boeing supplier said it plans to cut 2,800 employees because of lower levels of 737 Max production.
“These workers are suffering because of a situation created by Boeing’s decision-making,” making Muilenburg’s exit package seem “all the more obscene,” according to the letter.
Calhoun, who’s 62 and has been a Boeing director for more than a decade, was tapped as CEO after the board in December voted to dismiss Muilenburg. In addition to the potential $7 million bonus, he’s eligible for $10.9 million in annual compensation.
All Max jetliners have been under a global flight ban following crashes in Indonesia and Ethiopia that killed 346 people. Boeing’s deteriorating relationship with the Federal Aviation Administration has prolonged the grounding.
Top Priority
“The safe return to service of the Max is our top priority,” a Boeing spokesman said in an emailed statement. “The board and CEO are in full agreement that the safe return to service of the 737 Max must be done with full regulatory oversight. The FAA and global regulatory authorities will determine the timeline for certification.”
Not everyone’s convinced. The senators pointed to the trove of incendiary internal messages and memos Boeing released last week, showing that several employees expressed alarm about the design of the 737 Max and bragged about their ability to deceive regulators. It also referenced news reports detailing how the company rushed the design of the aircraft to avoid losing ground to rival Airbus SE.
Such behaviors led Boeing to produce a “dangerously flawed plane,” the senators said, adding that the company must “prioritize safety as its number one value.”
“We therefore urge you to cancel this incentive payment immediately and cease all efforts to rush the 737 Max back into the sky,” the politicians wrote.
--With assistance from Courtney Rozen and Julie Johnsson.
To contact the reporter on this story: Anders Melin in New York at amelin3@bloomberg.net
To contact the editors responsible for this story: Pierre Paulden at ppaulden@bloomberg.net, Steven Crabill
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