Boeing CEO Jim McNerney's compensation jumped 34 percent last year as the board of the big airplane maker rewarded him for delivering the new 787 and winning a huge Air Force order for refueling tankers.
McNerney, 62, is also Boeing's chairman and president. His total compensation added up to $18.4 million, according to an Associated Press analysis of a company filing on Friday.
The main increase was in incentive pay, which nearly doubled to $8.7 million. That included almost $4.3 million for 2009-2011 performance, which was actually less than Boeing's target because that three-year period included the delays to the 787 and the revamped 747, among other issues. But the board also granted above-target 2011 incentive pay to Boeing managers for 2011, including $4.4 million for McNerney. The above-target rewards were in order because of "strong, integrated performance across the Company and better-than-expected mitigation of risks," Boeing said in its filing.
A year earlier, Boeing's board had held McNerney's incentive pay at $4.4 million for because the company didn't meet its profit goals for the 2008-2010 period. By last year, all was forgiven. Boeing delivered the new 787 three years late, but did deliver it. It's also delivering the 747-8, a revamped, larger version of its double-decker superjumbo jet. It won an important order to make F-15 fighters for Saudi Arabia and tankers for the U.S. Air Force.
Although the filing didn't mention labor issues, it's unlikely they went unnoticed. In December the National Labor Relations Board dropped its high-profile lawsuit over Boeing's addition of a 787 assembly line in union-unfriendly South Carolina. And Boeing signed a new, four-year contract with its biggest union a year early, ensuring labor peace.
Boeing revenue rose 6.9 percent last year, to $68.74 billion. Net income jumped 21.5 percent to $4.02 billion.
Boeing shares rose 12.4 percent for 2011, finishing the year at $73.35. On Friday they fell 23 cents to close at $75.20.
McNerney's base salary was unchanged at $1.9 million. Stock awards and options awards each rose 4 percent to just over $3.4 million, although their real value will depend on Boeing's share price when he exercises those options in future years.
Boeing also spent $324,504 so McNerney could use the company jet for personal travel, $80,633 so he could use a Boeing plane to fly to board meetings of other companies and $47,039 for personal use of ground transportation. It also paid for his home security and tax preparation, although those amounts were less than $25,000 each.
The company said that as of Jan. 1 it will no longer pay its executives' tax bills for their perks, except for moving expenses. And starting April 1 it will no longer provide company vehicles to its top five executives.
Boeing Co. plans to hold its annual shareholder meeting on April 30 at the Field Museum in Chicago.
The Associated Press formula is designed to isolate the value the company's board placed on the executive's total compensation package during the last fiscal year. It includes salary, performance-related bonuses, perks, and the estimated value of stock options and awards granted during the year. It also includes bonuses and above-market returns on deferred compensation, which McNerney did not receive.
The calculations don't include changes in the present value of pension benefits, and they sometimes differ from the totals companies list in the summary compensation table of proxy statements filed with the Securities and Exchange Commission, which reflect the size of the accounting charge taken for the executive's compensation in the previous fiscal year.
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