Boeing CEO Muilenburg earned total compensation of just under US$23.4 million for 2018. He also cashed in delayed stock payouts from previous years, bringing his total actual compensation for the year to US$30 million. Credit: CNN.

Boeing CEO Dennis Muilenburg has stepped down after a tumultuous period in which the company faced a series of setbacks, including two fatal crashes, delays and numerous issues with its 737 MAX airplane, CNN reported. Boeing continues to struggle to get its most important product back in the air.

Chairman David Calhoun will take over as CEO, effective January 13, 2020.

Boeing (BA) said in a press release that its board of directors decided to part ways with Muilenberg.

“A change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders,” the company said.

Muilenburg, 55, became CEO of the world’s largest aerospace company in July 2015. He previously held the chairman role as well but relinquished that seat in October. He has worked at Boeing in a number of different roles since 1985, the report said.

Boeing’s 737 MAX, which was the company’s bestselling commercial jet, was grounded worldwide in March 2019 after two fatal crashes killed 346 people. It still hasn’t returned to flight, despite Boeing’s efforts to clear a software fix with regulators.

The company said earlier this month that it would halt production of the 737 MAX starting in January. Boeing has continued to make the 737 MAX during its grounding, but uncertainty about when the federal regulators will clear the planes for flight has made its continued production untenable.

The Starliner spacecraft the company is building to ferry NASA astronauts to the International Space Station also malfunctioned last week during its first-ever trip to space. The uncrewed test flight, which came after years of delays and setbacks, was intended to be the final major test before it was finally ready to fly humans.

The company has also been roundly criticized by federal oversight officials over billion-dollar cost overruns and missed deadlines with another NASA contract: to build the Space Launch System, a massive rocket that the space agency wants to use to return humans to the moon.

On March 10, Ethiopian Airlines Flight 302 crashed minutes after takeoff from Addis Ababa, killing all 157 passengers and crew. Credit: India Today.

Boeing still has a strong balance sheet, and its stock is up marginally this year despite all of its setbacks. But questions about the company’s leadership grew louder as the company’s missteps added up.

“Under the company’s new leadership, Boeing will operate with a renewed commitment to full transparency, including effective and proactive communication with the FAA, other global regulators and its customers,” the company said in a statement.

Incoming CEO Calhoun has served on Boeing’s board since 2009. He has also served as a senior managing director at Blackstone Group and he previously was the chairman and CEO of Nielsen Holdings.

According to USA Today, Boeing appeared confident last month that the FAA would certify its software fixes for the troubled plane this year and that it could resume deliveries of new Max planes to airlines in December, with the plane returning to commercial service in January.

Calhoun even gave Muilenburg a vote of confidence in November, saying the board believed Muilenburg “has done everything right” during the MAX crisis.

The FAA, however, has repeatedly said there is no timetable for bringing the planes back into service. Last week, United took the Max out of its schedule until early June, longer than any airline since the timetable for the plane’s return remains murky. American and Southwest currently have it scheduled to return in early April.

The planes were fast becoming the most popular in the world when Indonesia’s Lion Air Flight 610 plunged into the Java Sea on October 29, 2018, killing all 189 aboard. Less than five months later, on March 10, Ethiopian Airlines Flight 302 crashed minutes after takeoff from Addis Ababa, killing all 157 passengers and crew.

Muilenburg was grilled about his salary at congressional hearings in October.

In a heated exchange, Rep. Steve Cohen, D-Tenn., questioned whether Muilenburg was taking responsibility for the fallout from the crashes. Cohen asked if anyone at the company had taken a pay cut amid the grounding of the 737 MAX.

“You’re saying you’re not giving up any compensation at all,” Cohen asked Muilenburg. “You’re continuing to work and make $30 million a year after this horrific two accidents that caused all these people’s relatives to go, to disappear, to die.”

Muilenburg earned total compensation of just under US$23.4 million for 2018, according to a Securities and Exchange Commission filing. He also cashed in delayed stock payouts from previous years, bringing his total actual compensation for the year to US$30 million.

When Muilenburg was asked directly if he would take a cut in pay, he ducked the question by saying the company’s board makes those decisions.

“You’re not accountable then,” Cohen said. “You’re saying the board’s accountable.”

Asia Times Financial is now live. Linking accurate news, insightful analysis and local knowledge with the ATF China Bond 50 Index, the world's first benchmark cross sector Chinese Bond Indices. Read ATF now. 

Join the Conversation

7 Comments

  1. Hi! I’ve been following your site for a long time now and finally got the bravery to go ahead and give you a shout out from Lubbock Texas! Just wanted to tell you keep up the great work!

Leave a comment

Your email address will not be published. Required fields are marked *