By Doug Cameron 

Boeing Co. said Friday that its chief executive's total compensation rose 14% last year while the new head of its commercial jetliner unit received almost $21 million after moving from General Electric Co. in November.

Dennis Muilenburg secured $15.1 million in pay and benefits in his first full year as CEO compared with $13.2 million in 2015 after assuming the top job in July of that year, according to a regulatory filing, with most of the advance in the form of higher incentive, pension and perquisite payments.

New Commercial Airplanes unit CEO Kevin McAllister received total compensation of $20.9 million after joining from GE, where he headed the company's aviation-services business. Mr. McAllister received a $2 million cash signing bonus and $17.8 million in stock awards, the bulk of which replaced a GE retirement plan and unvested GE options.

Mr. Muilenburg's compensation boost following his elevation to CEO comes despite Boeing reporting another drop in profit last year, while its workforce was trimmed by almost 7%.

Boeing has targeted cost cuts as it fights competition for jet deals from rival Airbus SE that investors worry will hurt its operating margins. It shed more than 10,000 net jobs last year and more than 20,000 over the past five as its head count fell to 150,500 at the end of 2016, with cuts mostly at its jetliner arm. Its defense business, like that of peers, shrank to adapt to a smaller Pentagon procurement budget.

The Machinists' union said Boeing on Friday issued notice of an unspecified number of compulsory layoffs that would start in May, having already secured voluntary cuts of 1,800 staff following a round announced in December. Boeing declined to comment on how many workers may be affected.

The timing of the move could add to Boeing's already complex relationship with a new U.S. administration heavily focused on job creation.

Boeing is the largest U.S. exporter and the second-largest supplier to the Pentagon, and Mr. Muilenburg has held several meetings with President Donald Trump over the cost of defense equipment and broader manufacturing policy

Mr. Muilenburg's base salary increased to $1.65 million from $1.35 million, up from $1.14 million in 2014. Nonequity incentive payments rose to $6.4 million from $4.6 million.

Boeing reported a second-consecutive drop in profits last year with a 5.4% decline driven by charges on some commercial and military programs, though sales also dipped.

Its shares underperformed the sector for much of the year before a fourth- quarter surge helped them gain almost 8% during 2016 as Boeing also bought back $7 billion in stock. The shares are up almost 16% so far this year.

Mr. Muilenburg has revamped Boeing's senior staff with the recruitment of Mr. McAllister and the promotion of Leanne Caret to lead its defense and space arm, and is also establishing a stand-alone services arm to target an addressable market of $50 billion a year where it has only a small share.

Write to Doug Cameron at doug.cameron@wsj.com

 

(END) Dow Jones Newswires

March 17, 2017 17:15 ET (21:15 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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