Boeing Co.'s ousted chief executive, Harry C. Stonecipher, earned $3.6 million in salary and bonus pay for 2004, but will lose the potential to make millions more in grants of stock, the company said in a securities filing yesterday.
Stonecipher, 68, was forced to resign last weekend after the board of directors learned that he was having an affair with a female executive. The board brought him out of retirement in late 2003 to help repair the aerospace giant's reputation after military procurement scandals led to the resignation of his predecessor.
Stonecipher's 2004 pay package is composed of a $1.5 million salary and $2.1 million bonus. The bonus was $600,000 more than targeted because of Stonecipher's "ability to focus the company to achieve excellent financial results and strong stock performance in 2004," the filing said. The bonus could increase by $525,000 because Stonecipher chose to defer the entire amount until his official retirement date of April 1, when it will earn a 25 percent company match.
The company beat earnings expectations, raised its revenue and profit forecasts and saw its stock price increase more than 50 percent during the time Stonecipher served as chief executive, company spokeswoman Anne Eisle said. Boeing stock closed up 23 cents yesterday at $57.98 a share. On Dec. 1, 2003, the day Stonecipher took over, it closed at $38.02.
Boeing's board did not approve Stonecipher's 2005 performance grant, which would have made him eligible for millions of dollars more over the next five years if the company's stock price reached target levels.
Stonecipher will continue to have access to a company car until April 1, but he will need the permission of Lewis E. Platt, Boeing's non-executive chairman, to use the company plane.
As of Boeing's latest proxy statement, filed in March 2004, Stonecipher owned or held options on 1.76 million shares of the company's stock, and retains his pension worth $631,000 a year.
The company continues to review the conduct of the female employee involved in the affair. Boeing has refused to identify the woman, but sources who would speak only on the condition of anonymity identified her as Debra Peabody, a 25-year Boeing veteran who serves as vice president of commercial activities for Boeing's Arlington office.
The office of about 150 employees includes lobbyists and lawyers who work on a range of regulatory, international and trade issues. Peabody's duties are largely related to human resources, including managing the office's payroll and its day-to-day operations, one source said. She is not a registered lobbyist. She doesn't work on military programs and thus doesn't represent Boeing before Congress or the Pentagon, the source said.
Peabody, who has an electrical engineering degree, joined Boeing in 1980 as a specialist engineer. She also spent time in the company's London office as a sales director for the commercial aircraft business and in 2001 became international sales director for Boeing's Connexion, a broadband Internet service for commercial and business jets. Peabody did not return calls or respond to messages left at her home.
Researcher Richard Drezen contributed to this report.