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Ousted Boeing CEO exits with $80 million - but no severance

Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of hi...

Posted: Jan 12, 2020 10:30 AM

Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of his departure from the embattled company, Boeing disclosed late Friday.

Muilenburg lost his job due to the ongoing Boeing 737 Max crisis. The company's board had stuck with Muilenburg through the first 10 months of the grounding of all 737 Max jets following two fatal crashes that killed 346 people. But on Dec. 23 the board announced that "a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders."

Muilenburg's holdings includes previous long-term compensation worth $29.4 million as of Thursday's closing price, according to the filing. He also keeps shares worth an additional $4.3 million, as well as distributions from pension and deferred compensation worth $28.5 million. And, finally, he has the right to exercise other stock options to purchase an additional 72,969 shares of Boeing stock that are worth $24 million. He will have to pay only $5.5 million to acquire those shares.

The filing said that Muilenburg will lose other shares and options, worth about $14.6 million, in which he was not yet vested.

The announcement comes a day after Boeing released internal communications in which unidentified employees mocked the design of the 737 Max and questioned the plane's safety. The documents were turned over to to the FAA in December, and given to congressional committees looking into the 737 Max crisis on Thursday. Among the comments in the communications were one which described the jet as "designed by clowns, who in turn are supervised by monkeys."

In a different communication two employees agreed that they would not let their families fly on the plane.

"We regret the content of these communications, and apologize to the [Federal Aviation Administration], Congress, our airline customers, and to the flying public for them," the company said when they were released Thursday.

Some of those who lost family members in the 737 max crashes lashed out at news of Muilenburg's exit package.

"It's so appalling that Boeing keeps shamelessly showing the world its culture of rewarding failures and 'clowns,' as the latest documents it released reveal, instead of investing and rewarding safety," said Paul Njoroge, who lost his wife, mother in law, and three small children in the Max crash in Ethiopia, in an emailed statement.

"Boeing executives should be walking away in handcuffs, not with millions of dollars," said Zipporah Kuria, who lost her father on the Ethiopian flight, in a statement. "Anguish fails to describe what we are feeling receiving this news. It is unraveling and bewildering for people taking part in atrocities to be rewarded. The payment he has received is payment that was made with our loved one's blood."

Muilenburg was stripped of his title as chairman of Boeing in October. At the end of that month he came under fire at a Congressional hearing for his 2018 pay package, worth $23.4 million. A few days after the hearing Boeing announced that Muilenburg requested that he not receive any stock or bonus money for 2019. That may have reduced his compensation for the year by about 90%.

Greg Smith, the company's chief financial officer, has been the interim CEO since Muilenburg's departure. On Monday Dave Calhoun, who had been serving as chairman of Boeing since October, will assume the position of CEO.

Boeing's filing said Calhoun's base pay will be $1.4 million annually. He also will be eligible for bonus awards and long-term compensation worth as much as $9.5 million, as well as additional awards totaling $17 million, for a compensation package that could reach nearly $28 million.

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