Boeing doles out bonuses to most employees despite $12bn loss

Boeing Co has said it will dole out annual performance bonuses next month to most employees despite losing $12bn over the last year during the coronavirus pandemic.

Most of the United States-based plane maker’s employees did not receive annual bonuses last year after it lost $636m in 2019 because of the grounding of its 737 MAX jet by the Federal Aviation Administration, The Seattle Times newspaper reported.

In response, the company in February changed the structure of its incentive plan, tying its financial goals to the timing of the first delivery of a 737 MAX after the flight ban was lifted. The company’s bonuses were previously paid out based on profits.

Boeing CEO Dave Calhoun told employees on Thursday that the company’s board of directors “recognises the important strides the team has made.”

The flight ban on the 737 MAX was lifted in mid-November and the company delivered the first one on December 8, ensuring there would be a bonus under the new incentive plan.

The bonuses are expected to be distributed next month and will vary depending on the department.

Employees also receive personalised performance scores from their managers, which adjust the payout.

For example, an employee in the commercial aircraft division with a high performance score of 6 percent, will receive a 2020 annual bonus equal to 58 percent of 6 percent, or 3.5 percent, of gross annual salary.

Executive Vice President of Human Resources Mike D’Ambrose told employees that despite the challenging year, the “team demonstrated resilience.”

The company declined to comment on how incentives at the management level are structured.

Separate figures made public on Monday showed that the company’s workforce shrank last year, overall and in Washington state.

Boeing’s operations in Washington state were hit hardest because its commercial aircraft unit suffered the biggest financial hit from the MAX grounding and the huge reduction in air travel due to the pandemic.

Boeing said it shed 14,000 company jobs in Washington state, leaving it with 56,908 jobs there.

Overall, the company cut about 20,000 jobs, dropping total employment to 141,014 positions, company officials said.