CEO’s
compensation $29M, including $14M bonuses
after
white-collar workers bonuses
lowered
March
13, 2015
By
Dominic Gates
Seattle
Times aerospace reporter
Though most Boeing employees got a smaller
bonus this year than last, McNerney’s total included an annual bonus of $4.4
million, the same amount that he received in 2013.
His compensation also included a $10
million three-year performance bonus, double the target amount.
Boeing’s second highest paid executive,
Commercial Airplanes boss Ray Conner, received $16 million. Conner got an
annual bonus of $1.3 million and his three-year performance bonus was almost
$800,000, the filing shows.
Conner’s 2014 bonus was down 9 percent from
the previous year’s.
However, the filing also shows Conner was
given a supplemental grant
of 50,000 shares that will vest in three years “to acknowledge his many
significant contributions to our Commercial Airplanes business and to encourage
him to forgo an opportunity to retire in the near future.”
Dennis Muilenburg, Boeing’s chief operating
officer and the likely successor to McNerney, received almost $12 million.
His annual bonus was $1.6 million, down 7 percent from
the previous year, and his three-year performance bonus was $2.6 million.
The filing listing the executives’
compensation comes just weeks after both white- collar staff and production
workers at Boeing received lower annual bonuses than last year.
Despite Boeing’s $5.4 billion net profit in 2014,
the rank-and-file employees’ bonuses were down from the previous year because
they failed to “far exceed” financial-performance targets set at the beginning
of the year. Though the company exceeded those preset targets by 30 percent,
that was not enough to trigger the maximum bonuses, equal to twice the target
bonuses.
Unlike those workers, McNerney was granted
the maximum bonus allowed under his annual compensation plan.
In addition, in the separate three-year
performance bonus plan for executives, the filing states that Boeing’s
2012-2014 “cumulative economic profit” was $8.332 billion versus a target of $5.701 billion, resulting
in a maximum award of twice the target amount for McNerney and other
executives.
Last month, salaried non-management staff,
including engineers, in Washington state received annual bonuses averaging just over $4,500.
That was approximately 12.5 days of extra
pay, down from 16.5 days of extra pay the previous year, or a 24 percent drop.
Also last month, members of the Machinists
union in a separate annual bonus plan received an average payout of $2,294.
This was 3.1 percent of their total
2014 gross wages, short of the maximum 4 percent bonus the Machinists received
the previous year, or a 23 percent drop.
This month, Boeing’s managers will get the payout from a new annual bonus plan that
will pay out bonuses ranging from 12.5 percent of salary for first-level
managers to 22.5 percent of salary for third-level managers.
These
high percentages were in part designed to compensate for the fact that in 2014
Boeing changed the pay structure so that managers no longer get paid for
overtime.
The executives’ reported
compensation totals for 2014 include stock grants that cannot be turned
into cash for several years, as well as increases in the value of the pensions
they’ll receive upon retirement.
Actual compensation realized during last year
— equivalent to “take-home” cash — omits those future amounts. It replaces
those figures with stock vested in 2014 from grants in previous years, as well
as stock options exercised during the year.
In these terms, Conner’s “take-home” cash is
greatly reduced by the $8.5 million he received in stock that hasn’t yet vested
and comes to just under $6 million.
McNerney’s “take-home” cash for the year,
bolstered by the $14.5 million in bonuses that were paid immediately, is listed
in the filing as $23.3 million.
Dominic Gates: 206-464-2963 or dgates@seattletimes.com
For the long term blood-letting (destruction) of a company nothing works better than giving “Management” stock; this is the gift that keeps on destroying. Say the “Company” gives the CEO, COO and CFO a combined offering of 100,000 shares (not unheard of) and the “Company” has a quarterly dividend of $1.52 that gives these three individuals $152,000 to split every 3 months or $608,000 a year that is not being used to fund everyone else’s pension or health care or shore up the “Company”. If these three individuals receive 100,000 shares year after year for 5 or 10 years you have a very serious financial drain on the “Company” $1,824,000 by the second year, $9,120,000 paid by the end of year 5 and a whopping total of $33,440,000 paid out after 10 years. This blood-letting will continue year after year until the “Company” goes bankrupt.
|
Year |
Shares - Total |
Dividend Paid Yearly |
Total Paid Out |
|
1 |
100,000 |
$ 608,000 |
$ 608,000 |
|
2 |
200,000 |
$1,216,000 |
$ 1,824,000 |
|
3 |
300,000 |
$1,824,000 |
$ 3,648,000 |
|
4 |
400,000 |
$2,432,000 |
$ 6,080,000 |
|
5 |
500,000 |
$3,040,000 |
$ 9,120,000 |
|
6 |
500,000 |
$3,648,000 |
$12,768,000 |
|
7 |
700,000 |
$4,256,000 |
$17,024,000 |
|
8 |
800,000 |
$4,864,000 |
$21,888,000 |
|
9 |
900,000 |
$5,472,000 |
$27,360,000 |
|
10 |
1,000,000 |
$6,080,000 |
$33,440,000 |
For the “Working Class” this was not taught
in your “Economics” class, but that is how the worker becomes a liability to
the “Elite”. When the “Company” can no longer afford to feed the “Elite” their
dividend check; “Management” has to find a way to maximize profits, one simple
method is to off shore jobs. Foreign workers cost less, have little job
protection, little to no pension liability and little to no medical coverage so
they are not the “actuarial” problem to the dividend check that an American
worker is/was and until the American worker is reduced to a third world country
employee they will continue to be an accounting problem.