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Ousted Boeing CEO Dennis Muilenburg Will Leave Job With $62.6 Million

Dennis Muilenburg was fired from Boeing in December after the fallout from a pair of fatal crashes tarnished the company's reputation with airlines and regulators.
David Shepardson and Tracy Rucinski

Jan 10 (Reuters) - Boeing Co’s ousted chief executive officer, Dennis Muilenburg, stands to receive $62 million in long-term incentive, stock awards and pension benefits, but forfeited $14.6 million and will receive no severance, the plane maker said in a regulatory filing on Friday.

Muilenburg was fired from the job in December as the company failed to contain the fallout from a pair of fatal crashes that halted output of its bestselling 737 MAX jetliner and tarnished its reputation with airlines and regulators.

He was replaced by Boeing board chairman David Calhoun, 62,a turnaround veteran and former General Electric executive who has led several companies in crisis.

Calhoun, who starts as CEO on Monday, will receive a base salary at an annual rate of $1.4 million and is eligible for $26.5 million in long-term incentive compensation, Boeing said in a filing.

Boeing said in November Muilenburg had volunteered to give up his 2019 bonus and stock awards. For 2018, his bonus and equity awards amounted to some $20 million, according to filings.

“Upon his departure, Dennis received the benefits to which he was contractually entitled and he did not receive any severance pay or a 2019 annual bonus,” Boeing said in a statement.

The 737 MAX has been grounded since March. The deadly accidents in Indonesia and Ethiopia within five months killed 346 people.

The severance disclosure follows Boeing’s release late on Thursday of hundreds of internal messages that contained harshly critical comments about the development of the 737 MAX, including one that said the plane was “designed by clowns who in turn are supervised by monkeys.”

Speculation that Muilenburg would be fired had been circulating in the industry for months, intensifying in October when the board stripped him of his chairman’s title - although he had also twice won expressions of confidence from Calhoun.

Boeing also disclosed that Kevin McAllister, who was firedas CEO of Boeing Commercial Airlines in October, forfeited $52.9million in unvested equity awards and other compensation.

(Reporting by David Shepardson in Washington and Tracy Rucinskiin Chicago; Additional reporting by Ankit Ajmera in Bengaluru and Eric M. Johnson in SeattleEditing by Shounak Dasgupta and Matthew Lewis)

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Before You Go

Overpaid CEOs
8. Kevin Sharer - Amgen Inc.(01 of08)
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Company: Amgen Inc.Total compensation: $21,138,133Change in stock price: -3.0 percentSales at the world's largest biotech company rose from $14.6 billion in 2009 to $15.1 billion in 2010. Net income was higher by 2% to $4.6 billion. Amgen has relied heavily on its anemia drugs, which have experience eroding sales over the past two years. The firm's flagship drugs, Epogen and Aranesp, fall into this red blood cell booster category. Largely because of worry over the future of these products, the stock has been flat for three years. Amgen's margins also likely will be hurt by the introduction of generic versions of some of its drugs. Sharer made an extraordinary $26 million over the two years that ended in 2010. During that time Amgen's shares were flat compared to a 65% increase in the Nasdaq.Read more at 24/7 Wall St. (credit:AP)
7. William Weldon - Johnson & Johnson(02 of08)
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Company: Johnson & JohnsonTotal compensation: $28,720,491Change in stock price: -4.0 percentJohnson & Johnson has been battered by product recalls that have hurt the company's sales and tarnished its brand -- one that was once among the most valuable in the world. In a period that ended last April, J&J had 22 product recalls in 19 months. Among the products recalled were widely sold Motrin and Children's Tylenol. Last year's damage has already spilled into this year's results. In January, J&J had forecast 2011 earnings per share of about $4.85, well below analysts' expectations of $4.99 a share for 2011. Weldon has spent a great deal of his time handling the recall scandal. He was grilled by a congressional committee last September and exchanged barbs with Food and Drug Administration officials over the recalls.Read more at 24/7 Wall St. (credit:AP)
6. Robert Stevens - Lockheed Martin Corporation(03 of08)
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Company: Lockheed Martin CorporationTotal compensation: $21,897,820Change in stock price: -7.2 percentThe drop in Lockheed Martin's share price did not just occur over the course of 2010. Its stock has underperformed the DJIA over the past five years as well. While revenue in 2010 was up to $45.8 billion from $44 billion the year before, net income fell to $2.9 billion -- lower than any of the previous three years. The anticipation of federal defense budget cuts may have hurt Lockheed's share price. But Wall St. expects sales overseas to be strong for the next several years. The blame for delays and test problems with Lockheed's huge F-35 program do belong with Stevens. And while Stevens still has a job, in June the company said it would cut 6,500 workers. Stevens did not even take a pay cut.Read more at 24/7 Wall St. (credit:AP)
5. William Swanson - Raytheon Co.(04 of08)
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Company: Raytheon Co.Total compensation: $18,787,343Change in stock price: -10.1 percentDefense contractor Raytheon had net income of $1.8 billion in 2010 down from $1.9 billion the year before. Revenue was nearly flat at $25 billion. Raytheon shares have probably suffered because of concerns about the government's defense budget. The firm's pension liabilities are nearly $5 billion. Swanson's compensation raises the question of whether a company in a troubled industry, even if relatively well run, should pay its CEO this much while shareholders do poorly. Swanson has made almost $58 million over the three years that ended in 2010. Based on how investors have done, that is excessive.Read more at 24/7 Wall St. (credit:Getty)
4. Miles White - Abbott Laboratories(05 of08)
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Company: Abbott LaboratoriesTotal compensation: $25,564,283Change in stock price: -11.3 percentAbbott Labs recently announced it would break itself into two companies. It was the best thing management has done for shareholders in years. Abbott has been criticized for its acquisition spree, and now it has decided to break the businesses it has acquired into parts. Abbott has also struggled with product development. The drug and medical device company has failed to develop any major pharmaceuticals out of its M&A operations in the past two years. Abbott's revenue rose from $30.8 billion in 2009 to $35.2 billion in 2010, but net income fell from $5.7 billion to $4.6 billion.Read more at 24/7 Wall St. (credit:Getty)
3. Laurence Fink - BlackRock Inc.(06 of08)
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Company: BlackRock Inc.Total compensation: $23,839,294Change in stock price: -17.9 percentLaurence Fink is considered the best money manager in the world. BlackRock is the largest money management firm in the U.S., with assets under management of $3.66 trillion. Fink is one of the few large financial firm CEOs who made it through the credit crisis and subsequent government investigations of Wall St. entirely unscathed. He continues to be well-regarded by the press. Fink was recently added to the Forbes "World's Most Powerful People." None of these accolades, nor the size of BlackRock, has done much to help investors. While EPS last year were up 53% to $10.94, the stock price dropped nearly 18%. One of the major concerns about BlackRock is that it is so large it cannot outperform the markets. Also, most money management firm stocks did poorly last year because of concerns about the economy and the debt situation. That may not be BlackRock's fault, but it cost investors. It should have cost Fink.Read more at 24/7 Wall St. (credit:AP)
2. Tom Ward - SandRidge Energy Inc.(07 of08)
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Company: SandRidge Energy Inc.Total compensation: $21,756,257Change in stock price: -22.4 percentSandRidge, an oil and natural gas company, has piled on debt as it has moved from gas to liquid energy assets. In the process, SandRidge spent $2.2 billion on assets in the Permian Basin and $1.8 billion for acreage on the Anadarko Shelf. Long-term debt reached $2.9 billion at the end of 2010. The debt is listed as one of the risk factors in the company's 10-K. SandRidge's prospects improved in 2010 as revenue rose to $932 million from $591 million in 2009. However, last year's sales were well below the $1.2 billion the company brought in during 2008. SandRidge lost $3.2 billion in 2008 and 2009 combined. This improved to net income of $153 million last year.Read more at 24/7 Wall St. (credit:Getty File)
1. John Chambers - Cisco Systems(08 of08)
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Company: Cisco SystemsTotal compensation: $18,871,875Change in stock price: -31.4 percent (FYE: 7/30/2011)Cisco was once considered the most well-run large company in Silicon Valley. That has changed in the last year as it has become clear that Chambers, a dean of Valley CEOs, diversified that company too far beyond its core router business. Margins in the new set-top box, WiFi, and video conference businesses do not match those of routers. Chambers has begun a retreat from his M&A strategy, trying to refocus the company. He has had only limited success so far. Cisco has also announced that its rapid growth will slow considerably in the next two years.Read more at 24/7 Wall St. (credit:AP)
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