Magazine article Workforce

Boeing Announces Plans to Overhaul Exec Pay Structure

Magazine article Workforce

Boeing Announces Plans to Overhaul Exec Pay Structure

Article excerpt

THE BOEING CO., BASED IN SEATTLE, ANNOUNCED PLANS IN February to overhaul senior managers' pay by tying it more closely to the company's stock performance. The goal of the new compensation strategy is to make the firm's top execs more accountable for Boeing's financial performance.

Boeing, the world's largest aircraft company, has proposed a new stock-option plan that vests its executives' pay relative to the firm's stock-performance goals. The plan will replace the standard stock options that more than 1,500 top managers now receive, according to a report by The New York Times. The new plan was announced by the company's chairman and chief executive, Philip M. Condit.

Boeing's stock price must rise by at least a compounded 10 percent over five years for the first 25 percent of the options to vest under this proposed plan. Most stock options given to managers will be performance-based, replacing a system in which most options automatically vest over time.

For the first year of the plan, the company has four million shares in the pool for incentive options, according to a report by The Wall Street Journal. The newspaper's report further outlines the plan, explaining that it has a sliding scale for vesting. …

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