If you’re a corporate board member and you’re kicking out the guy whose decisions have endangered the company, the last thing you want to do is hand him a substantial leave-taking check. CNN reporting:
Boeing’s ousted CEO Dennis Muilenburg left behind a long list of problems at Boeing, but he’s walking away with a sizable golden parachute.
The exact amount of money that he will leave with isn’t yet clear. That will depend on his negotiations with Boeing (BA), including how the company labels his departure — for example, was it a retirement? A resignation? A layoff?
But public filings show Muilenburg could be entitled to a benefit plan worth more than $30 million and, potentially, a severance payment of about $7 million. Muilenburg also has another $20 million-plus worth of vested stock and a pension package totaling more than $11 million.
Muilenburg, 55, became CEO of Boeing, the world’s largest aerospace company, in 2015 after serving in several other executive roles, including chief operating officer and CEO of its defense space and security division, throughout his 34-year tenure at the company at Boeing.
For those who long to take on top-dog roles, it’s necessary that they be aware that failure to execute on basic responsibilities will be met with condemnation – object lessons, as we used to call it in an earlier generation. With Muilenburg, no such lesson is being delivered – his decisions to chase the money without respect to producing safe products will be rewarded with financial gifts beyond most folks’ dreams.
To be clear, I’m not talking about a failure to reach profit targets; I’m talking about basic errors made in the necessary safety culture. Make no mistake, the 737 MAX crashes, which appear to be traceable to a prioritization of profit over safety, endangers the very safety of Boeing. If the culture which engendered unsafe designs is not rebuilt to put safety first, Boeing could easily become a subsidiary of a better run company, or even an extinct failure[1].
And while the next CEO may understand that intellectually, they also may not. For some folks, the money, prestige, and power blind them to their responsibilities – think of former Wells Fargo CEO John Stumpf, or even more to the point, President Trump and his apparent violations of the Emoluments Clause. A visible lesson of the fruits of irresponsibility would be salutary, as they say.
Muilenburg should not have been rewarded with a ‘package.’ The board of directors of Boeing should be attempting to claw back all of his compensation, and his employment contract should have been worded to permit that. The Board of Director’s real-world actions are endangering their own company.
Combine this with the corruption under the Trump Administration, and extend that to another four year term. Can the FAA keep the skies safe? I’m not sure. Maybe I won’t fly so much, which would be good for our climate. Incidental positives are not a good pollution control strategy, unfortunately.
1 The needs of the airline industry might require the government to step in and at least ensure continuing maintenance, but the days of a high-flying Boeing – forgive the pun! – would be over.
