American Aerospace Giant Boeing appointed a new CEO in August 2024 Kelly Ortberg replacing Dave Calhoun in the aircraft manufacturer’s hot seat.
Ortberg is one of the most sought-after names in the aviation industry and brings over 35 years of experience to the table, which Boeing will hope to leverage as it hopes to bounce back from a troubled few years.
Boeing New CEO Salary
Boeing’s new CEO Kelly Ortberg has over three decades of experience in the aerospace industry. He earned a mechanical engineering degree from the University of Iowa and started as an engineer at Texas Instruments in 1983, a year after graduation.
Shortly thereafter, he joined Rockwell Collins (now known as Collins Aerospace), where he made his way up the ladder and was the CEO before resigning to join Boeing. Collins Aerospace is one of the world’s most reputed companies in its space and among other products and services, it manufactures flight management systems (FMS).
Now aged 64, Ortberg has taken up a role with the Seattle-based Boeing in what could be the biggest challenge of his career to date, succeeding a rather controversial figure in Dave Calhoun.
How much will Kelly Ortberg Earn?
Kelly Ortberg will be paid an annual base salary of $1.5 million. In December, he is due to receive a $1.25 million payment instead of a joining bonus as well as stock vesting worth $16 million over the next few years of his tenure.
Next year (FY2025), his first full calendar year at the job, Ortberg will make a guaranteed $1.5 million in basic compensation though there remains a possibility of a performance-related bonus of $3 million and an additional $17.5 million in stock award.
In comparison to his compensation at Collins Aerospace, Ortberg will be earning up to four times more with all stock awards and contingent payments added up. His reported overall salary in his previous role was approximately $5 million.
How do Ortberg’s numbers compare to his predecessor at Boeing?
Ortberg’s maximum compensation come the end of next year could hit $22 million. That still significantly falls short of the $33 million Dave Calhoun received in 2023 as well as noticeably lower than his $22.6 million packet from 2022.
At the time of parting with Boeing, Calhoun was expected to receive another $45 million through stock awards and options that were vested during his appointment in 2020.
Where Does Boeing’s CEO Stand in Industry?
For the last several years, Boeing has been a very controversial figure among aircraft manufacturers worldwide and the compensation of their CEOs is not an outlier by any means either. Calhoun’s $33 million pay from 2023 undoubtedly raised eyebrows and Ortberg’s case is no different in spite of his life at the company only recently getting underway.
Airbus, Boeing’s direct and biggest competitor has had Guillaume Fuary as its CEO since 2019. He was re-appointed in his role in 2022 after a three-year span. Despite the massive success that Airbus has enjoyed in recent years, his overall compensation including bonuses and stock awards amounted to slightly under $6.3 million – five times less than Calhoun and a bit over 25% of the maximum amount Ortberg could walk away with in 2025.
Bombardier, another very well-reputed aircraft manufacturer’s CEO Eric Martel, could take home a maximum of $6.5 million in 2024. Of that amount, just 13.4% is his basic salary and the remaining 86.6% is in stock awards and subject to the company’s performance.
What will be Ortberg’s first challenge as CEO?
As Kelly Ortberg settles into his role as the Boeing CEO, it is fair to say that in recent years, Airbus has usurped its American counterpart across several factors.
The safety issues surrounding the Boeing 737 MAX seem to finally be a thing of the past. After the groundings of airplanes by a majority of the airlines around the world, the aircraft are back in the air and there has been little to worry about since a resolution was sought.
The Dreamliner’s engine issues, however, do not seem to be reaching a standstill. Earlier this year, they continued with Japanese carrier All Nippon Airways (ANA) and have recently dragged on with the grounding of a few British Airways 787s. While it is more of Rolls Royce’s lookout than Boeing’s, it has still put somewhat of a stain on the manufacturer’s name.
The immediate priority will be to ensure that all the Dreamliner operators who have been forced to ground planes are provided with a resolution to get them back in the air to meet the increasing demand.
Almost ironically, the aircraft that was brought in to compete with the Airbus A330 and A330neo seems to be taking backward steps every now and then over a decade after its first flight.
Boeing 777X will Determine his Success
It remains to be seen if Kelly Ortberg has been appointed on a fixed period validity but regardless, the Boeing chief’s tenure will be determined by how successfully he manages to get the Boeing 777X delivered safely to numerous operators around the world.
The likes of Cathay Pacific, Emirates, and Singapore Airlines have all got outstanding orders for the aircraft and have displayed disgruntlement at Boeing’s continued delays in delivery. The date has now been pushed to 2026 owing to persistent teething issues that are being discovered during tests, in addition to the supply-chain problems caused by COVID-19.
Also Read When Air India Will Take Delivery of its First Boeing 777X?
With the Boeing 747 ceasing production and comfortably becoming a thing of the past, the 777X will be the company’s flagship project going forward and promises to be a long-term competitor to the Airbus A350. That said, airlines like Qantas have already preferred the latter keeping in mind Boeing’s recent track record not just with its orders, but safety as well.
In getting the 777 up and running, Ortberg simply cannot afford to be oblivious to safety, something which Boeing might have been guilty of doing with the 737 MAX. However, a new leadership promises a fresher start and everyone at Boeing will hope that the next few years are significantly better than the past few.
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