Dennis Muilenburg, the former CEO of Boeing who was removed from his post last week over the 737 Max grounding scandal will be leaving the company with a huge exit package even though the company itself will linger in the issues created under his tenure.
While reports did not specify the exact exit package that the company would provide Muilenburg, reports quoting sources said that the package will depend on the negotiations of Muilenburg and Boeing – which would also include the labeling of the type of exit for Muilenburg. For example, the company has to decide whether it is a retirement or a resignation or a layoff.
However reports quoted public filings of the company which indicate that the exit package for Muilenburg could be as high as more than $30 million along with a possible severance payment of about $7 million. Additionally, a pension package totaling more than $11 million and another $20 million-plus worth of vested stock also would be included for Muilenburg.
After remaining with Boeing for 34 years and fulfilling several roles in the company which included chief operating officer and CEO of its defense space and security division, Muilenburg, 55, was appointed the CEO of the largest aerospace company of the world in 2015.
The ouster of Muilenburg has been because of a number of setbacks and scandals of the company which includes two fatal crashes involving the 737 Max planes within a span of just 5 months which killed 346 people. The accidents, the latest one was that of an Ethiopian airlines in March, resulted in the grounding of all 737 Max planes – the cash cow of the company, worldwide. Since then, it has been very difficult for Boeing to convince regulators to allow the plane to commercially fly again. Boeing is also trying to find a fix for the software that is believed to have been instrumental in the both the crashes.
The company said that its board determined “a change in leadership was necessary to restore confidence in the company moving forward as it works to repair relationships with regulators, customers, and all other stakeholders.”
Starting in January next year, the production of its 737 Max planes would be suspended by Boeing, the company had announced earlier this month. The company had continued with production of the planes even though they were grounded in the hope that the ban would be lifted sooner than later and hence the company would be in a position to fulfill orders and deliveries as soon as that happens., However in recent week, there has been greater uncertainty about when the federal regulators would allow the planes to fly again commercially and when the planes would get a safety fit certificate.
Throughout the year and since the grounding, the expected timeline of return of the 737 Max planes have been changed on several occasions by Boeing as the company realized that it would not be possible to easily convince the regulators about the safety of the planes.
Boeing’s chief financial officer will act as interim CEO until David Calhoun, currently the board’s chairman, takes over as CEO on January 13, 2020.
(Adapted from CNN.com)