Boeing chief executive officer (CEO) Dennis Muilenburg will take a significant pay cut for 2019 and 2020 due to widespread criticism of the company after two fatal 737 Max crashes.
In an interview on CNBC, Boeing chairman Dave Calhoun said he was contacted by CEO Muilenburg on Saturday to suggest the pay cut for this year and 2020. Calhoun took the reins as chairman when the board decided to remove Muilenburg from the position.
According to Calhoun, the CEO will not take any stock or bonus money this year after the company received widespread criticism for the crashes that killed 346 people reportedly due to a faulty safety system on the plane.
The company has grounded the 737 Max aircraft since March, resulting to billions of dollars in losses for the company. Boeing has also expressed that it is prepared to compensate the victims $5 billion and reach settlements with the victims' families.
The aforementioned stock and bonus money composes a large majority of Muilenberg's pay. In 2018, he received $20.4 million in stock and bonuses out of the $23.4 million total compensation he got for the year.
Despite the Muilenburg's decision to take a pay cut and amidst the criticism the company has been receiving, Calhoun assured that the Boeing board believes the CEO has done everything right during this crisis and that he still has the board's confidence in continuing to lead the company. Calhoun said: "He has set us up for a return to service."
In hearings held by House and Senate committee members last week, Â Rep. Steve Cohen, a Democrat from Tennessee, asked Mulenburg: "You said you're accountable. What does accountability mean? Are you taking a cut in pay? Are you working for free from now on until you can cure this problem?"
"These people's relatives are not coming back. They're gone. Your salary is still on...You're continuing to work and make $30 million a year after...two accidents that caused all these people's relatives..to die," he continued.
