Boeing Boosted CEO’s Pay 20% in Year Before 787 GroundingTim Catts
Boeing Co. boosted Chief Executive Officer Jim McNerney’s compensation 20 percent to $27.5 million last year, before the planemaker’s marquee 787 Dreamliner was grounded by overheating batteries.
McNerney, 63, received $10.8 million of incentive pay in addition to his $1.93 million salary and $840,775 in other compensation, Chicago-based Boeing said yesterday in proxy materials filed with the U.S. Securities and Exchange Commission. He earned $23 million in 2011.
While Dreamliner deliveries last year helped Boeing overtake Airbus SAS as the world’s largest planemaker for the first time since 2002, handing over more aircraft wasn’t enough to keep full-year profit from falling 2.9 percent to $3.9 billion. The stock’s 2.7 percent gain for 2012 lagged behind the 13 percent advance for the Standard & Poor’s 500 Index.
The 787, whose completion was among McNerney’s signature achievements, has been grounded since Jan. 16 as Boeing and regulators led by the U.S. Federal Aviation Administration probe the battery malfunctions.
Boeing climbed 2.1 percent to $86.43 yesterday, the highest close since May 2008, after executives said safety upgrades may allow commercial 787 flights to restart within weeks. The plane entered service in 2011 after three years of delays amid supply-chain disruptions, assembly problems and a Machinists’ strike.
McNerney’s incentive pay for last year, in which Boeing said it exceeded both 2012 and three-year profit targets, included a $4.44 million annual bonus and $6.38 million from a long-term program.
The value of his pension increased $6.37 million, according to the filing, and he received $7.53 million in stock and option awards.
McNerney’s realized compensation, or income reported to the U.S. Internal Revenue Service for the period, was $20.1 million, compared with $12.4 million a year earlier.
Jim Albaugh, who served as head of Boeing’s commercial airplanes division until his retirement last year, earned $9.63 million in 2012, versus $8.49 million in 2011, according to the filing.
Albaugh will receive $708,543 annually from Boeing’s supplemental executive retirement plan, according to the filing.
The planemaker said he also was due to receive service-based equity and performance awards that had a value of $5.54 million as of Dec. 31. Under Internal Revenue Service rules, the final value of that package can’t be calculated until after April 1, six months following his retirement, Boeing said.
Aircraft deliveries are important to planemakers because that’s when customers typically make large bulk payments on the purchase price of a jet. Boeing handed over 601 planes to buyers last year versus 516 for its Toulouse, France-based rival.