When it comes to building planes, Boeing CEO Dave Calhoun is all about streamlining costs. An accountant by training, Calhoun has prioritized fiscal discipline over his four years at the helm, tightening the belt to free up cash flow and put the company on better financial footing.
But when it comes to living the CEO lifestyle, that thriftiness goes right out the window.
See here: Boeing reported in a regulatory filing that four top executives, including Calhoun, got an extra half-million dollars worth of personal private jet travel on the company’s dime that had previously been improperly recorded as business travel, my colleague Chris Isidore writes.
That oopsie was discovered in an internal review, which was prompted by a Wall Street Journal investigation last year into Boeing executives’ private jet travel, the paper reported Thursday.
To be clear: Boeing requires Calhoun, who is stepping down later this year, to use its private jets for business and personal travel for security reasons. And that’s pretty standard.
If he’s flying from the company’s headquarters in Arlington, Virginia, to its production facility outside Seattle, that’s generally considered a perk of the job. But when a CEO uses the company jet for a family vacation, that usually counts as taxable income.
The IRS is a stickler about these things, and it recently announced it would be cracking down on executives who have been illegally writing off personal trips as business expenses. There is no evidence anyone from Boeing was doing that, but the crackdown signals that it’s happening with some regularity in Corporate America.
Over the last three years, Calhoun racked up $979,000 in personal air travel, according to the company. Boeing did not have any comment beyond the information in the filing.
Why it matters
In all the chatter about Boeing’s disastrous start to 2024, we’ve barely had time to talk about the crisis looming on the horizon: a potential strike by its largest labor union.
A 10-year contract covering 30,000 Seattle-area machinists expires September 12. Negotiations started last month — delayed to give the company some slack while dealing with multiple federal probes into the January 5 door-plug blowout.
The machinists are seeking a 40% pay bump over three years and a seat on the board of directors.
It’s going to be pretty awkward for Boeing leadership to try to nickel and dime the people who build the planes while lavishing Calhoun with a nearly $33 million payday last year (a 45% bump from 2022), and teeing up his $45 million retirement package, and batting down questions about the boss bouncing between his two homes, neither of which are located near the company’s headquarters.
“With what’s going on these days, we are oftentimes the last line of defense, and we have to save this company from itself,” the union’s president, Jon Holden, told the FT last week.
