Boeing to give bonuses despite bad year
SEATTLE — Despite a horrendous year in which Boeing lost a record $12 billion, the company next month will pay out annual performance bonuses to most employees.
Boeing CEO Dave Calhoun told employees in a message last week that “during a time when many of our customers will not be in a position to offer the same incentive, our Board of Directors recognizes the important strides the team has made.”
Last year, after Boeing lost $636 million in 2019 after the grounding of the 737 Max, most employees received no annual bonuses.
Last February, knowing the grounding of the 737 Max likely would mean another year of very poor financial performance, Boeing’s board changed the structure of the company’s incentive plan. Instead of basing targets largely on profits, the financial goals were tied to the timing of the first delivery of a 737 Max after its un grounding by the Federal Aviation Administration.
The FAA ungrounded the Max in mid-November and Boeing duly delivered the first one in 21 months on Dec. 8. The delivery before yearend ensured there would be a bonus under the adjusted incentive plan.
Mike D’ Ambrose, Boeing’s human-resources chief, told employees that despite the challenging year, the “team demonstrated resilience.”
The bonuses will be distributed in cash next month and will vary according to the performance of each business unit.
The metrics in the adjusted incentive plan came out as 58% of target for the Commercial Airplanes division, 86% for the Defense and Space division, 49% for the aftermarket services division and 64% for Boeing’s corporate employees.
Employees also receive individual performance scores from their managers, which adjust the payout up or down.
The target payout is 10 days’ extra pay. So that means, with adjustments for individual performance, nonunion employees in Commercial Airplanes will get 5.8 extra days of pay, employees in the defense and space units are to get 8.6 days, and so on.
For managers, the annual bonus is a much more significant proportion of their income. Boeing declines to say exactly how the management incentive scheme is structured.
For unionized employees, bonuses are determined by the plans in their contracts.
For the engineers and technical staff members in the Society of Professional Engineering Employees in Aerospace union, their target is 5% of their gross annual pay, including overtime.
Boeing said the machinist union bonus payout for 2020, which is based on productivity, safety and quality metrics, has not yet been announced to employees.
Last year, when no other employees got an annual bonus, the machinists got one equal to 2.2% of their annual pay.
Separate figures released Monday show how much Boeing shrank in 2020, both overall and in Washington state.
During the year, 14,000 Boeing jobs disappeared in Washington state as total employment here fell to 56,908. With that, Amazon leapfrogged Boeing in 2020 as the largest private employer in the state.
Overall employment companywide fell to 141,014, a drop of just over 20,000 jobs.
Boeing has said it aims to cut further to 130,000 employees by the end of this year, so there are 11,000 jobs still to go.
Washington state was hit hardest because Boeing’s Commercial Airplanes unit here has suffered the biggest hit from both the Max grounding and the huge reduction in air travel due to the pandemic.
Just shy of 3,000 highly paid employees, represented by the Society of Professional Engineering Employees in Aerospace, left Boeing in the past year, bringing the union’s membership down to 14,170.