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Boeing Co. is eliminating most of the pay raises next year and handing over stock in their place as the company prepares for a long recovery from the coronavirus pandemic.
The restricted stock units will be awarded to workers who stay with Boeing through Dec. 14, 2023, CEO Dave Calhoun said in a message to employees on Wednesday. Executives are excluded from the one-time grant, as are union members, whose annual compensation is set through collective bargaining.
Even with a vaccine, it may take Boeing another three years to fully recover, Calhoun warned. Boeing’s debt has soared to $ 61 billion and the company is losing about a third of its workforce as a collapse in demand for new airliners compounds the financial pressure of a 20-month grounding. of the 737 Max, the aircraft manufacturer’s best-selling model.
“We will continue to position our company for the long term and chart a course to the other side of the recovery by making smart bets and investments,” Calhoun told employees. “That starts with investing in our people, empowering them to make the changes that will transform our company, and sharing our successes together.”
While executives, managers and most employees will not receive raises next year, stock awards have the “potential to generate value significantly beyond a traditional merit increase,” Calhoun said. It is the first time that Boeing has widely distributed restricted stock units, which are normally reserved for senior leaders.
Since the end of October, Boeing soared 59% through Tuesday, the most on the Dow Jones Industrial Average, when US officials cleared the 737 Max to restart commercial flights and began distribution of coronavirus vaccines. Boeing had underperformed the Dow for the first 10 months of 2020 and is still down about 30% for the entire year.
