Outgoing Boeing CEO David Calhoun and other execs took $500k worth of personal private jet trips improperly recorded as business travel, review finds

Boeing CEO Dave Calhoun and other bosses at the scandal-plagued aviation firm spent $500,000 on company private jets for personal trips, a review found.  

The trips had been previously recorded as business travel. 

Boeing's internal review was prompted by a Wall Street Journal investigation into the executives' casual use of the company's fleet of private jets, which was published last year.

At the time of the investigation's release, CEO David Calhoun dismissed the article in a meeting as 'silly,' and insisted that his incessant travelling was part of his job.

Calhoun works from home at his $12 million New Hampshire mansion. He and other executives commute to Boeing's headquarters in Arlington, Virginia, when necessary. 

The CEO - who'll step down from his job by the end of 2024 - is made to fly privately by Boeing for security reasons - regardless of whether he's traveling for business or leisure, according to the WSJ. 

Boeing's updated internal review found that CEO David Calhoun (pictured amid a press of reporters) and other executives took over $500k-worth of personal trips on the company's private jets

Boeing had previously categorized the four executives' personal flights as business travel; pictured: a Boeing private jet

The updated numbers were part of an internal company review, launched in the aftermath of a WSJ investigation; pictured: a mock-up of a bedroom in a Boeing private jet

Boeing's review concluded that some of the flights taken by executives in 2021 and 2022 'were not previously classified as perquisites by the company'.

In the company's proxy filing on April 5, Boeing said that these flights 'should have been classified as such in accordance with SEC rules and guidance'.

Boeing executives are permitted to jet between homes, company offices, and personal destinations like vacation residences, with parts of the trips being deemed as personal or business trips.

It is unclear if the planes taken were Boeing jets, or smaller aircraft from private jet manufacturers like Gulfstream.  

Taking a private jet to facilitate a commute might be regarded as a perquisite, which, in turn, would make it a taxable event. 

However, a flight between two company locations might not be considered a perquisite, and therefore would not be taxable. 

The pandemic and remote work have created further confusion, and make the distinction between personal and business even more ambiguous. During the pandemic, Boeing uprooted their Chicago headquarters and relocated to Arlington, Virginia. 

The aviation giant has been plagued by safety concerns over its 737 Max and 787 Dreamliner planes. 

Two 737 Maxes crashed in 2018 and 2019, killing more than 300, with a third bursting open in mid-air after taking off from Portland Airport in February. 

Boeing has admitted quality control has slipped in recent years, as executives prioritized profits over engineering excellence. 

Boeing executives often elected to take private jets to the Arlington office. Calhoun routinely flew out of his New Hampshire and South Carolina estates.

If a private jet is used for personal travel, it is usually considered taxable income. 

The IRS has announced that it will begin looking into potential abuses of personal jet use by corporate executives. 

This year, the IRS said that they would initiate audits of dozens of companies over executives' use of private jets.

Boeing's board of directors and its executive flight-operations unit act as in-house arbiters on personal use of company jets. They are entrusted with distinguishing between personal and business travel.

In its proxy, Boeing stated that flights to attend speaking engagements and outside board meetings might be considered perquisites, as per SEC rules.

Boeing has had to contend with a protracted onslaught of negative publicity, beginning with a blow-out on one of their planes at the end of last year

Pictured: The ripped open fuselage of an Alaskan Airlines plane that was made by Boeing 

Pictured: a mock-up of the fuselage of a Boeing private jet, probably similar to the one the four executives travelled in

Boeing recently announced that David Calhoun would be stepping down as CEO. Calhoun's departure is part of a broader company overhaul stemming from an Alaska Airlines blowout and production issues.

Boeing has also been saddled with congressional hearings and multiple federal investigations- including a criminal probe. 

The company's stock has foundered, falling almost 30% this year and reducing the company's market valuation by $50 billion.

Boeing has been unable to turn a profit in years.

But Boeing almost has a monopoly on the aircraft-manufacturing business. There are very few competitors, Airbus being one of them. The dearth of competition has allowed Boeing to weather some of their financial strain.

Ultimately, Boeing is at the mercy of the shareholders, who are undoubtedly displeased with company's sinking stock and reputation.

In Boeing's updated review, the aircraft-manufacturer stated that executives including finance chief Brian West, defense chief Ted Colbert, and Stan Deal (who recently left the company) are all allowed to avail themselves of Boeing's private jets for personal travel.

Last year, Boeing stated that they had professionals who helped them ensure that flights were properly designated as business or personal.

'As it relates to the tracking and categorization of flights, we have professionals and subject matter experts who help us strictly comply'.

Since the blowout and the allegations made by a whistleblower, Boeing stock has tumbled by 30%, reducing the company marked valuation by $50 billion

As a part of a broader company overhaul, Calhoun announced that he would be stepping down as CEO at the end of the year. When he retires, Calhoun will receive $45 million 

Boeing's proxy filing revealed that Calhoun had incurred $514,000-worth of personal flights in 2023, which was a part of his total compensation package for that year. 

The scope of the review was the past two years. The updated sum for Calhoun's personal airfare in 2022 was $332,000, an increase of $93,000 from the company's previous calculations. 

The 2021 sum was increased by $49,000.

Calhoun was paid $32.8 million last year. When he retires at the end of the year, the CEO of the beleaguered aircraft-manufacturer will pocket $45 million for his services.