Boeing CEO McNerney’s pay up 20% last year

Published 2:33 pm Friday, March 15, 2013

Boeing Co. Chief Executive Officer Jim McNerney’s compensation climbed 20 percent to $27.5 million last year, before the planemaker’s marquee 787 Dreamliner was grounded by overheating batteries.

McNerney, 63, received $10.8 million of incentive pay in addition to his $1.93 million salary and $840,775 in other compensation, Chicago-based Boeing said today in proxy materials filed with the Securities and Exchange Commission. He earned $23 million in 2011.

The 787 Dreamliner has been grounded since Jan. 16 as Boeing and regulators led by the U.S. Federal Aviation Administration probe the cause of the battery malfunctions. The plane entered service in 2011 after three years of delays caused by supply chain disruptions, assembly problems and a strike by its machinists’ union.

McNerney’s incentive pay included a $4.44 million annual bonus and $6.38 million from a long-term program as Boeing exceeded 2012 and three-year profit targets. The value of his pension increased $6.37 million, according to the filing, and he received $7.53 million in stock and option awards.

McNerney’s realized compensation, or income reported to the U.S. Internal Revenue Service for the period, was $20.1 million, compared with $12.4 million a year earlier.

Jim Albaugh, who served as head of Boeing’s commercial airplanes division until his retirement last year, earned $9.63 million in 2012, versus $8.49 million in 2011, according to the filing. Albaugh took a lump-sum payment of supplemental retirement benefits of $12.1 million as he left Boeing effective Oct. 1, according to the filing.

Boeing said he also was due to receive service-based equity and performance awards that had a value of $5.54 million as of Dec. 31. Under Internal Revenue Service rules, the final value of that package can’t be calculated until after April 1, six months following his retirement, Boeing said.