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Boeing CEO gives up bonus, stock grants

By SCOTT REEVES in New York | China Daily Global | Updated: 2019-11-07 00:15

Boeing CEO Dennis Muilenburg speaks at the New York Economic club luncheon in New York City, New York, US, October 2, 2019. [Photo/Agencies]

Boeing's CEO Dennis Muilenburg will give up his 2019 bonus and decline stock grants until the entire 737 MAX fleet is back in the air, company Chairman David Calhoun said Tuesday.

During Senate and House hearings last week in Washington, lawmakers criticized Muilenburg for his 2018 compensation package of $23.4 million, including a $13.1 million incentive bonus despite the crashes of two MAX jets that killed all 346 passengers and crew.

Investigators believe the MAX's automated anti-stall device, called Maneuvering Characteristics Augmentation System (MCAS), erroneously pointed the nose of the planes down to avoid a mid-air stall and into a fatal plunge.

"From the vantage point of our board, Dennis has done everything right," Calhoun said during an interview with CNBC. "Remember, Dennis didn't create this problem. From the beginning, he knew that MCAS could and should have been done better and he has led a program to rewrite MCAS to alleviate all of those conditions that ultimately beset two unfortunate crews and the families and victims."

Calhoun said Muilenburg telephoned him Saturday morning to suggest he forego bonuses this year — the biggest part of his compensation — until all MAX jets return to service, a process that could extend into 2021.

A Boeing spokesman confirmed that the board endorsed Muilenburg's proposal to reduce his compensation. The company will not ask Muilenburg to return a portion of his 2018 pay.

Muilenburg has worked at Boeing for three decades. Boeing's board of directors took away Muilenburg's chairmanship on Oct 11 but stressed that it had "full confidence" in him as CEO.

The board said ending Muilenburg's responsibilities as chairman would allow him to focus more sharply on resolving problems with the MAX's anti-stall system.

Muilenburg has been CEO since 2015. Calhoun declined to speculate how long Muilenburg might remain as CEO, but suggested his tenure could depend on how the company handles the MAX crisis. "To date, he has our confidence," Calhoun said.

Development of MCAS was based on flawed assumptions about how quickly and correctly pilots would respond to an apparent misfire by the anti-stall system, the chairman said.

"No one was hiding anything. It was a set of engineering decisions that ended up being wrong," Calhoun told CNBC.

After the first day of hearings last week, Muilenburg listened to families who lost a loved one in a crash.

"He listened for several hours to every story, every story the victims' families presented to him. Changed him for life," Calhoun told CNBC.

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