Shot, Chaser

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Shot …

Internal Boeing Documents Show Cavalier Attitude to Safety  [Wall Street Journal]

“Would you put your family on a MAX simulator trained aircraft? I wouldn’t.”

“I still haven’t been forgiven by god for the covering up I did last year. Can’t do it one more time. Pearly gates will be closed.”

“This airplane is designed by clowns, who in turn are supervised by monkeys.”

“I don’t know how to fix these things … it’s systemic.”

“This is a joke. This airplane is ridiculous.”

“I’ll be shocked if the FAA passes this turd.”


Ousted Boeing CEO exits with $80 million – but no severance  [CNN Business]

“Ousted Boeing CEO Dennis Muilenburg left the company with stock options and other assets worth about $80 million, but did not receive severance as part of his departure from the embattled company, Boeing disclosed late Friday.”

Both of these articles appeared last Friday, and of course it got me thinking about my most disliked ET note ever:

When Was I Radicalized? (Boeing edition)

I wonder how much money Muilenburg and his management team and his board of directors have pocketed since he took over as CEO in 2015 and Chairman in 2016? I wonder if executive compensation practices have changed over that span since … you know … Boeing started buying back nine billion dollars of stock every year? … Continue reading

Yep, I got more angry emails on this ET note than anything I’ve ever written, telling me what a fine plane the 737 MAX was and how the government (or at least the Obama/Deep State holdover part of the government) was just out to get Boeing and how incredibly flawed my compensation analysis was on Muilenburg and Boeing executives.

OK, Boomer.

But even this article about the Muilenburg severance seemed off to me. I mean … it’s from a Boeing press release, also from late last Friday after everyone has gone home for the weekend. And since basic forensic accounting is a skill they don’t teach in journalism school anymore, not as it conflicts with a masters degree in advocacy studies, at least, I decided to dig in a little bit myself.

So I downloaded and compiled every SEC Form 4 filing that Dennis Muilenburg has ever made.

He’s EDGAR CIK# 0001471763 if you want to check my work, btw, and I’m just trying to answer a simple question …

How much money did Dennis Muilenburg suck out of Boeing over the last ten years?

Tell you what … I’m not even going to count his salary and annual cash bonuses. Nope, you’ve gotta work hard to destroy a corporate culture as big as Boeing’s, so let’s not begrudge the man whatever tens of millions of dollars he’s been paid in cash comp. Besides, cash comp is for suckers. Just ask Jamie Dimon.

So here we go. Ready?

Over the past ten years, and prior to this past Friday’s Boeing announcement, Dennis Muilenburg has acquired or been granted more than 430,000 shares of Boeing stock (all of this information is publicly available in the SEC Form 4s). Most of this stock was given to him gratis, but he had to pay to exercise some of this as options. The total price paid for these shares by Muilenburg was $12.4 million, at an average price of $28.65 per share.

Muilenburg has sold about 70% of these shares over the years. Here’s the Bloomberg insider transaction chart showing the activity, with the green flags showing net share acquisition (albeit at cheap or no cost to Muilenburg), yellow flags for no net share change, and red flags for net share disposal (with shares sold at full market price, natch.)

Over his tenure at Boeing, Dennis Muilenburg sold about 290,000 shares of stock for a total of $54.5 million, at an average price of $189 per share. His last major sales were in late February 2019, when he pocketed about $10 million in a top-tick of the all-time high Boeing stock price of $422. For those of you keeping score at home, the first 737 MAX crash was in October 2018.

That leaves about 143,000 shares still in Muilenburg’s hands as of his last Form 4 filing, which have a current market value of $47.3 million.

So over the past ten years, Dennis Muilenburg has $54.5 million in realized stock gains and $47.3 million in unrealized gains, at a cost basis to him of $12.4 million. That’s $89.5 million.

Once you buy a prize, it’s yours to keep!

And now we come to the Boeing announcement last Friday, which you can also read in all its gory detail on the SEC site.

First there’s $29.4 million in “long-term incentive awards”. LOL. Amazing how there’s never a “long-term clawback”.

Then there’s $28.5 million in pension and deferred compensation benefits. Then there are options that Dennis can exercise on 73,000 shares at an average strike price of $76 … that’s worth another $18.5 million at the current stock price. And finally, there’s $4.3 million in still more stock that Boeing has decided to give him.

All told, that comes to $80.7 million as Dennis Muilenburg is shown the door.

But don’t call it severance.

All told, that’s more than $170 million that Dennis Muilenburg has pocketed from Boeing in stock-based comp and “incentive awards” and don’t-call-it-severance payments, not even counting his salary and bonuses.

Oh, did I mention that Dennis is on the board at Caterpillar, too? They’ve only given him $2 million in stock, plus a couple hundred grand a year in cash comp.

One day we will recognize the defining Zeitgeist of the Obama/Trump years as an unparalleled transfer of wealth to the managerial class.



  1. If you were one of those who criticized the previous post (especially if you have ever used the term “deep state” un-ironically, there is no place for you here. You worship what you think is capitalism, but you don’t understand the con despite Rusty and Ben’s best efforts. and you never will. Just go back to watching FOX 24-7. Better yet, go F-- yourselves.

  2. Whoa now pack mate… I think we have a problem in our definitions and our orientation. With clear eyes and full hearts, there is a ying to every yang. Extreme poverty rate for the globe in 1966 was 50% today it’s <9% (Factfullness, Hans Rosling). That didn’t occur without exporting some form of “capitalism”. All complex systems fail a “free market capitalist“ market should of failed in 2008. Taxpayers took the hit instead. Not “capitalism’s” fault. I think mark Kahn was on here last week talking about this, we all need to agree with a construct definition of what capitalism is, because the Madoff scheme that these insiders have created is not capitalism. Crony capitalism maybe, but don’t blame Adam Smith. We all need to have this discussion without getting emotional. MuH fOx nEWs doesn’t help anyone. Shits broke let’s fix it, but don’t forget how far we have come collectively together (Perhaps in a small part to The con), stats taken from Roslings book:

    80% of the world has access to electricity and doesn’t have to worry about burning down there houses with candles.
    14% of the globe is now protected reserves, 0.03% in 1900. (Thanks Teddy!)
    88% of world has access to water from a protected source up from 58% in 1980.
    Percent of children dying by 5 years old went from 44% in 1800 to 4%.
    28% were undernourished in 1970 11% today
    Child labor fell from 28% in 1950 to 10% in 2012

    Don’t throw the baby out with the bath water, the pack flies together!

  3. DG, I don’t think Mark is crossing swords with capitalism. He wrote: “…what you think is capitalism” which implies to me he understands the behavior described is not capitalism but something else. Now, you might take issue with the part where he tells deepstaters “there is no place for you here”… but that’s a different discussion.

  4. Ben, thank you for this. It’s good journalism. What would also be interesting would be to plot buyback announcements onto the acquisition/sales chart you created. As we know, these announcements tend to inflate stock prices (even if they never completely materialize), and insiders know this.

  5. Avatar for bhunt bhunt says:

    I liked John’s reply here, but figured I should do something more visible … like writing “I liked John’s reply”. There’s a meaningful distinction between capitalism and “Yay, Capitalism!”, a distinction I think DG would agree on and I think Mark’s note implies. Muilenburg embodies the latter to me, which is why I get so worked up about this, and I DO think that every MSM news corporation (certainly including, but certainly not only Fox) promotes the “Yay, Capitalism” narrative as a matter of course.

  6. I think there are plenty of people who view Ben’s disgust at mendacious behavior using the simulacrum of the “idea of capitalism” as a guise as “incorrect,” but that doesn’t mean they’re not acting in good faith. I think many people, especially those who would consider themselves conservatives or libertarians, are alarmed at what they see as an assault on the foundations of political and economic prosperity. I think they believe that any defense of ideas similar to, say, Elizabeth Warren’s views on share buybacks (though it should be noted that Ben’s views and Warren’s views spring from a different well and encompass different solutions) are dismaying.

    I think the whole “clear eyes”- thing would be of use here: just because the state is dangerous to your liberty does not mean that corporations automatically promote your liberty - and just because someone believes that there is a “deep state” or disagrees with Ben about Boeing does not mean that they are eschewing a hope for a more moral world.

    People can change their minds, and people can disagree on one aspect but respect another in someone’s critique of a system, ideology, or financial practice.

    I personally think it is best to not place your identity into your political views, especially short-term political views, on either side of the spectrum. I think we have to deal with the world in front of us, not one in which “capitalism” is perfect, and not one in which “conservatives” are all deluded - and certainly not one in which “my” ideological side is right and yours is wrong.

    The closer we can get to understanding the world in which we live and how it works, the further we can get from a tribalism which forces everyone into a narrow ideological wedge that restricts what we can do and who is allowed in our confidences and communities.

    With respect, thank you.

  7. Avatar for bhunt bhunt says:

    Well said!

Continue the discussion at the Epsilon Theory Forum


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