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Mike Benbow, Business Editor benbow@heraldnet.com

Why everyone is watching Boeing's stock

By Michelle Dunlop
Herald Writer

EVERETT -- Have you ever wondered why you should care about the Boeing Co.'s stock even if you don't own shares?

With grocery and gas prices on the rise, Snohomish County's economy could get a nice little boost this summer, courtesy of Boeing. That's when a Boeing employee incentive plan pays out -- or not -- depending on the company's stock price as of June 30.

Unlike some Boeing bonus programs geared toward Machinists or engineers, the Share Value Trust, which distributes stock awards, applies to most Boeing employees. With an estimated 30,000 company workers in the county, the potential payout could have an impact on retailers and auto dealerships should Boeing employees decide to trade their shares for cash.

The roughly 74,000 Boeing workers in Washington won't receive the stock award this summer should Boeing's stock fail to exceed the $54 per share mark on June 30. The higher the company's shares trade, the more money business owners could see.

For instance, a stock price of $84 this summer means a potential award valued at $3,000 per person, infusing as much as $90 million into the county's economy, should Boeing employees opt to cash out. Statewide, the award could be worth $222 million.

The county could see an even greater economic boost -- approximately $156 million -- if Boeing's stock can make it to $94 per share in late June when the average employee payout would hit $5,200.

But where Boeing's stock will be this summer is anyone's guess. The past year has been a roller-coaster ride for Boeing investors.

Right after the company rolled out its 787 Dreamliner last July, Boeing workers could have taken home $6,500 if the trust paid out then. Its shares routinely traded above $100, hitting a 52-week high of $107.83 on July 25, 2007.

The company's stock dropped within weeks of the Dreamliner's premiere, trading in the mid $90 range until climbing back above $100 in late September. The upswing didn't last long. After Boeing revealed a six-month delay of the 787 in October, its stock has declined steadily, dropping as low as $71.59 in mid-March.

Boeing's recent loss of a ­multibillion-dollar Air Force refueling tanker contract, along with persistent rumors of another 787 delay, have kept the company's stock below $80.

Boeing has limited ability to track whether employees hold or trade the shares they receive from Share Value Trust, Todd Blecher, a company spokesman, said in an e-mail. Under Boeing's Share Value Trust program, employees who have worked at Boeing the full four years of the investment program receive the full stock distribution, he said. Those with only partial service in the last four years will receive a prorated payout.

In 2006, Boeing employees received $5,231 in stock grants through the Share Value Trust. The program, started in 1996, has hit the targeted stock price just one other time since its inception. Employees, in 2004, picked up stock awards worth $900.

Workers tend either to save bonuses or to spend them on large-ticket items like electronics or cars, said Linda Johannes, general manager at the Everett Mall.

Both the Machinists and the engineers have received payouts in recent months from Boeing. The Machinists received a negotiated payment of $3,000 each last November. Engineers and technical workers received a payout from a separate incentive plan last month. Leaders of both unions urged members to save the money in case contract negotiations with the company go awry later this year.

The next stock award takes place June 30, 2010, when Boeing's shares need to trade at $87 to meet the payout threshold.

Reporter Michelle Dunlop: 425-339-3454 or mdunlop@heraldnet.com.