Boeing's Surprising Revelation: Extra $500,000 Unveiled for Top Executives' Private Jet Trips

Boeing recently revealed that it spent an additional $546,000 on personal air travel for four top executives, including CEO Dave Calhoun. Calhoun had previously announced his departure from the company by the end of the year.

The total cost for personal air travel for these executives since 2021 now stands at $1.9 million, as per the company's recent filing. The other executives who benefited from this spending are CFO Brian West, former commercial airplane unit CEO Stan Deal, and defense, space, and security business CEO Theodore Colbert.

The plane maker is currently under increased scrutiny due to a series of safety incidents, including a midair fuselage blowout in January. This has led to investigations, executive changes, and promises of improvement from the company.

As part of their perks, executives are granted air travel for personal trips, along with ground transportation, lodging, and meals.

When it comes to air travel, the reported costs only cover the additional expenses for Boeing, like fuel, crew travel, meals, landing fees, and parking. It doesn't factor in the expenses for corporate jets or the salaries of the flight crew, which Boeing stated they would be paying regardless of whether the executives took personal trips.

During that period, Calhoun's personal air travel expenses amounted to $979,000.

Boeing has faced financial challenges for the past five years due to various factors. This includes the grounding of its 737 Max after fatal crashes in late 2018 and early 2019, as well as the impact of the pandemic on air travel. The pandemic resulted in a significant decrease in air travel, leading to losses for airlines that purchase Boeing's planes.

An upward adjustment in personal air travel expenses for Boeing executives has been reported. In 2022, Boeing spent at least $734,000 and $306,000 in 2021 on personal air travel for these executives. The costs for 2023 amounted to $872,000. Some specific amounts for air travel for certain executives in earlier years were not disclosed, despite increased overall costs being reported for all executives.

Since the grounding in 2019, the company has reported adjusted losses exceeding $31 billion. Moving forward, losses are expected to persist.

The company's policy mandates that its CEO must travel on its private jets or leased aircraft for security reasons, even for personal trips. Other top executives are also allowed to do the same when aircraft are accessible.

An internal company review found that flights previously labeled as business travel should be classified as personal travel according to Securities and Exchange Commission rules. This led to an additional reported cost of $546,000 for personal travel in 2022 and 2021 compared to what was previously disclosed.

The review seems to have taken place following a September 2023 article in the Wall Street Journal that highlighted the privileges enjoyed by top Boeing executives. This included frequent use of company aircraft to travel from their homes located far from the company headquarters in Alexandria, Virginia.

Boeing did not provide any further details on the expenses related to the executives' personal air travel in the new filing issued on Friday evening.

In addition to this, the filing also revealed that Calhoun's total compensation for 2023 amounted to $32.8 million, showing a 45% increase from his 2022 compensation. However, he chose to forgo his annual incentive bonus of $2.8 million after an incident involving a Boeing 737 Max plane operated by Alaska Airlines on January 5.

The incident led to a number of federal investigations, a temporary halt in operations, changes in leadership, and raised concerns about the safety and quality of Boeing aircraft.

Recently, Calhoun revealed his decision to resign as CEO of the troubled company before the year ends. Simultaneously, Deal retired from his role as head of Boeing Commercial Airplanes, with immediate effect.

Editor's P/S:

The recent revelations about Boeing executives' lavish personal air travel expenses have sparked outrage among shareholders and the public alike. While it is understandable that top executives require secure transportation, the exorbitant costs incurred for personal trips raise serious questions about the company's priorities. Boeing's financial struggles in recent years, coupled with safety incidents and executive departures, further highlight the need for greater accountability and transparency within the organization.

The internal review that reclassified certain business travel as personal trips suggests a lack of oversight and potential abuse of privileges. The company's failure to disclose specific expenses for certain executives in earlier years also raises concerns about the accuracy of the reported costs. With the CEO set to resign and other executives retiring, it is crucial that Boeing implements rigorous controls and ethical guidelines to prevent such excessive spending in the future. The company must demonstrate that it values safety, financial prudence, and the interests of its stakeholders above the personal comforts of its top executives.