Ousted Boeing CEO Dennis Muilenburg is poised to walk away with up to $52milllion after he resigned following two fatal plane crashes and the aborted Starliner spacecraft mission.
Muilenburg publicly announced his resignation on Monday just one day after the return of the Starliner flight that threatened to derail Boeing’s attempts to launch astronauts for NASA in 2020.
Minutes after the Starliner took off from Cape Canaveral, Florida, on Friday, a software glitch caused the spacecraft to launch into the wrong orbit, prompting officials to route it back to Earth instead of continuing on to the International Space Station.
Former Boeing CEO Dennis Muilenburg could walk away with up to $52million payoff after his resignation on Monday
The capsule did successfully land on the Army’s White Sands Missile Range in the predawn darkness on Sunday, ending a two-day demo that should have lasted more than a week.
Muilenburg has compensation benefits that range between $30million and $39million, according to company filings accessed by The Telegraph.
He also has an executive pension pot worth an additional $13million that will accompany him as he leaves his position.
Boeing landed its crew capsule in the New Mexico desert Sunday after an aborted flight to the International Space Station that threatened to derail the company’s effort to launch astronauts for NASA next year
That comes atop an approximate $70million that Muilenburg earned during his four-and-a-half years as Boeing’s top executive.
The complete payout is around the same size as the $50million financial assistant fund Boeing created for families of the 346 crash victims.
Previously, Muilenburg announced that he would give up around $20million in bonuses and stock grants following the two crashes.
Chairman David Calhoun publicly backed Muilenburg and insisted on the company’s faith in his ability in an interview with CNBC.
‘From the vantage point of our board, Dennis has done everything right. It was a set of engineering decisions that ended up being wrong,’ he said.
Calhoun: ‘Dennis didn’t create this problem, but from the beginning he knew that MCAS should and could be done better, and he has led a program to rewrite MCAS to alleviate all of those conditions that ultimately beset two unfortunate crews and the families and victims’
‘Dennis didn’t create this problem, but from the beginning he knew that MCAS should and could be done better, and he has led a program to rewrite MCAS to alleviate all of those conditions that ultimately beset two unfortunate crews and the families and victims.’
Muilenburg is currently under investigation by the Justice Department and Congress.
In Congress, members questioned Muilenburg’s compensation while challenging him to resign or at least give up pay.
Last year, Muilenburg was paid $23.4 million, including a $13.1 million bonus and $7.3 million in stock awards.
Stock awards from previous years reportedly pushed Muilenburg’s total to more than $30 million.
‘Mr. Muilenburg’s answers to our questions were consistent with a culture of concealment and opaqueness and reflected the immense pressure exerted on Boeing employees during the development and production of the 737 Max,’ said Peter DeFazio, D-Ore., chairman of the House Transportation Committee and Rick Larsen, D-Wash., chairman of the aviation subcommittee.
After the plane crash in Ethiopia, investigators and officials recovered objects from the crash site
Pictured: People in Ethiopia carry a coffin of one of the victim’s who died in the Boeing 737 Max plane crash this year
Following Muilenburg’s resignation, Calhoun will serve as CEO and president, effective January 13, the company said Monday.
‘The Board of Directors decided that 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 Monday.
The company’s shares, which have fallen more than 20% since March, rose more than 2% to $335.24 in early trading. Overall, the Dow was up on Monday on the back of news that China will cut import tariffs from January 1, but watchers also said Boeing’s share price was boosting the market
The decision to fire Muilenburg followed a recent announcement that Boeing would suspend production of its best-selling 737 MAX model from January. It is the plane maker’s biggest assembly-line halt in more than 20 years.
Boeing has fired its CEO Dennis Muilenburg, pictured, it was reported Monday
Muilenburg was fired following a year of intense scrutiny and industrial setbacks set off by twin fatal crashes of its 737 MAX jetliner, pictured in Moses Lake, Washington in September
Parts of an engine and landing gear can be seen lying in a pile during recovery efforts at the crash site of Ethiopian Airlines flight ET302 in March this year in Ethiopia. Global regulators ordered a halt to MAX flights following the deadly Lion Air crash of October 2018 in Indonesia and the Ethiopian Airlines disaster in March, which together killed 346 people
After the completion of a risk assessment following the first crash, when a Lion Air Max (wreckage pictured) plunged into the sea off the coast of Indonesia in October 2018, FAA leaders decided to allow the Max to fly
The departure comes as the world’s largest planemaker struggles to win regulatory approvals for its grounded best-selling jetliner while trying to repair trust with passengers and airline customers.
The 737 Max was banned from flying in March 2019 following two devastating overseas crashes that left 346 dead.
The decision to suspend production was made by Boeing’s board after a two-day meeting in Chicago, just one week after the Federal Aviation Administration (FAA) said it would not approve the plane’s return to service before 2020.
Calhoun says he strongly believes in the future of Boeing and the 737 Max.
The board’s current chairman David Calhoun will officially take over on January 13
The 737 MAX grounding was the biggest crisis of Muilenburg’s 34-year tenure at Boeing, where he started as an intern in 1985, rising through the company’s defense and services ranks to the top job in 2015.
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 title.
Board member Lawrence Kellner will become non-executive chairman of the board effective immediately, the company said. Chief Financial Officer Greg Smith will serve as interim CEO during the brief transition period.
United Airlines has previously said it would pull the Boeing 737 Max from its flight schedule until June.
Spirit AeroSystems, which makes fuselages, said it would end deliveries intended for the Max in January, and Boeing’s new Starliner capsule went off course on a planned trip to the International Space Station.
Crews are seen tending to the Starliner after its successful landing on Sunday morning
All three main parachutes opened and airbags inflated around the spacecraft to ease impact
Boeing CEO admits key mistakes in development of 737 MAX
In October then Boeing CEO Dennis Muilenburg, who was fired Monday, admitted key mistakes in the development of the 737 MAX.
He was repeatedly hammered by U.S. lawmakers at a hearing over flaws with the 737 MAX, which has been grounded in the wake of two deadly crashes.
Boeing’s development of a key flight control system, known as MCAS, took front and center at the hearing as Muilenburg acknowledged ‘we made some mistakes’ in its design.
The anti-stall system, which was at the center of twin crashes in Ethiopia and Indonesia that killed 346 people, automatically pushed the plane’s nose down in both crashes and left pilots fighting for control.
Family members hold photos of the victims of Boeing 737 MAX crashes as Boeing Chief Executive Dennis Muilenburg testifies before the House Transportation and Infrastructure Committee on Wednesday
Lawmakers released Boeing documents that showed the company had considered adding an MCAS failure alert on the flight control panel to the 737 MAX.
Another Boeing document warned that if a pilot failed to respond in more than 10 seconds to the software, activation could lead to a ‘catastrophic’ failure.
A newly released internal email from 2015 was also released in which a Boeing engineer had voiced concerns about whether the flight control system they were developing was unsafe because it relied on a single sensor.
‘Are we vulnerable to single AOA sensor failures with the MCAS implementation,’ the employee wrote.
The email, which was sent more than a year before the plane received final approval to fly, raised concerns about an issue that would go on to be the cause of the two fatal crashes.
Boeing’s shares have fallen more than 20% since March but rose more than 3% in early trading
Boeing’s shares have fallen more than 20% since March but rose more than 3% in early trading
Kellner, the new non-executive chairman of the board, said in a statement: ‘On behalf of the entire board of directors, I am pleased that Dave has agreed to lead Boeing at this critical juncture.
‘Dave has deep industry experience and a proven track record of strong leadership, and he recognizes the challenges we must confront.
‘The board and I look forward to working with him and the rest of the Boeing team to ensure that today marks a new way forward for our company.’