Boeing recorded record earning & reduces bonus 25%

[supernova72]

I might be preaching to the choir here but am wondering for those still working if you've experienced the same situation. Most folks at this Megacorp don't count on the employee incentive plan (EIP) payout each year but this year it had record earnings, record backlog, tons of cash, etc. etc.


Our incentive is based on the financial health of the company and our business unit (10 days max each). That's why it's confusing in regards to the result.


We've now been told that the targets were "adjusted" for this years pmt. Adjusted UP would be my guess. We don't know that those official targets are.

2014 Earnings Soar! Hear Boeing Co. Roar!

This is for white collar non mgmt. folks. Managers have a new incentive bonus plan this year which is more favorable (wonder if BA squeezed the balloon?).

1st level mgmt. can get 10%, 2nd level 15%, 3rd level 18%. The non-mgmt worked out to 5% (IT folks, engineers, facilities, office staff in general).

Execs have an entirely different comp plan.

Last year (2013 performance) it was strong and they received 17 days pay out of a possible 20 days max.

For 2014 the financial performance was 20% greater and the employees received 12.5 days pay out of 20 (hmm12.5 days vs. 17--what's up??).

Boeing bonuses disappoint white-collar staff | The Seattle Times

It's hard to make the math work out.

Maybe this is just a sign of the times. I've posted before that the pension will be frozen at year end as well.

Thanks for reading.

 

[gerntz]

Perhaps, "Boeing reduces bonuses to help create record earnings", would have been a better thread title. It makes sense.

 

[supernova72]

I see your point although the bonus is paid in Feb of 2015 vs. 2014

 

[stepford]

I just look at it as further encouragement to ditch big B and ER at the end of the year.

 

[samclem]

Labor compensation is set by supply/demand for labor. It's hard to see why it would be linked to earnings at a particular company. Some companies link them, some don't.
If people want to participate in the risks/rewards of company ownership, it would make sense for them to buy stock.

 

[Chuckanut]

Labor compensation is set by supply/demand for labor. It's hard to see why it would be linked to earnings at a particular company.

Sam, I agree with you but....

I can't tell you how many times I heard "We would love to give you a raise but the company's earnings were not good this past year."

It works two ways.

 

[supernova72]

Labor compensation is set by supply/demand for labor. It's hard to see why it would be linked to earnings at a particular company. Some companies link them, some don't.
If people want to participate in the risks/rewards of company ownership, it would make sense for them to buy stock.

Oh, shoot. I was not very clear. Our incentive is based on the financial health of the company and our business unit. That's why it's confusing in regards to the result.

We were told later that the "targets" had been adjusted. Ha. UPWARDS that is. Cheers.

 

[stepford]

As I understand it the EIP at Boeing most strongly depends on how the stock price does in the intervening year. When this year's EIP was calculated I think the growth in the stock price was only modest (though it has roared up in the last few weeks).

While we could get all conspiratorial and believe that the stock price was manipulated to shaft employees and reward management I'd rather just fantasize about how large next years EIP will be (after I am no longer around to receive it).

 

[supernova72]

I just look at it as further encouragement to ditch big B and ER at the end of the year.

Sort of feeling like their nudging us a bit in the direction of the retirement button. "Have you considered the accelerated income option for your pension?".

 

[supernova72]

As I understand it the EIP at Boeing most strongly depends on how the stock price does in the intervening year. When this year's EIP was calculated I think the growth in the stock price was only modest (though it has roared up in the last few weeks).

While we could get all conspiratorial and believe that the stock price was manipulated to shaft employees and reward management I'd rather just fantasize about how large next years EIP will be (after I am no longer around to receive it).

Good point. I was thinking for EPS, revenue growth etc vs. stock price. Someone reminded me that the stock was down 8% for 2014. Now it's up a lot like you say. $158 today after starting the yr at 130. Yippee!

 

[stepford]

Sort of feeling like their nudging us a bit in the direction of the retirement button. "Have you considered the accelerated income option for your pension?".

I actually posted a thread about this a few months ago. Short answer is I've considered it and decided not to go for it (but will feel pretty stupid if inflation comes roaring back in the next 5 or so years).

The question I'm still struggling with is one posed in another post just yesterday - whether to delay taking the pension to allow for accelerated Roth conversions. Like a lot of Boeing folk I have a good fraction of my net worth in our 401K. If I take the Boeing pension when I ER at 55 then if I keep my AGI down to the 15% bracket I will only be able to convert a little bit of the (rolled over) 401K into a Roth. Since I'll start getting SS at 70 just around the same time as I start taking RMDs from my tIRA/401K this will likely push me into the 28% bracket from age 72 onward. The alternative has me delaying taking the pension, converting almost half of my 401K/tIRA before I turn 70 and staying comfortably within the 25% bracket in retirement (but at the expense of not taking Boeing provided retiree medical).

Here too I'm leaning toward the traditional approach of just taking the pension and medical plan subsidy. It gives me more flexibility during the first 16-17 years of retirement (when I think I'll need it most) and better health care options, but I suspect it will result in a slightly reduced NW by the time I'm in my 80s.

I know, I know - 1st world problems. The struggle is real!

 

[supernova72]

I actually posted a thread about this a few months ago. Short answer is I've considered it and decided not to go for it (but will feel pretty stupid if inflation comes roaring back in the next 5 or so years).

The question I'm still struggling with is one posed in another post just yesterday - whether to delay taking the pension to allow for accelerated Roth conversions. Like a lot of Boeing folk I have a good fraction of my net worth in our 401K. If I take the Boeing pension when I ER at 55 then if I keep my AGI down to the 15% bracket I will only be able to convert a little bit of the (rolled over) 401K into a Roth. Since I'll start getting SS at 70 just around the same time as I start taking RMDs from my tIRA/401K this will likely push me into the 28% bracket from age 72 onward. The alternative has me delaying taking the pension, converting almost half of my 401K/tIRA before I turn 70 and staying comfortably within the 25% bracket in retirement (but at the expense of not taking Boeing provided retiree medical).

Here too I'm leaning toward the traditional approach of just taking the pension and medical plan subsidy. It gives me more flexibility during the first 16-17 years of retirement (when I think I'll need it most) and better health care options, but I suspect it will result in a slightly reduced NW by the time I'm in my 80s.

I know, I know - 1st world problems. The struggle is real!

_____

Wow--congrats. After reading the other attached post it looks like you ER's two years "early" at 53. Pre-retirement LOA?

The accelerated is tempting and for me it's not a last resort but if things got ugly in the last 1-2 yrs here.

I want to go out on my own terms of course and would feel better about the straight line lifetime pension. I might be from another part of BA since no COLA for me.

I have not yet considered the ROTH rollover convert yet. I was hoping to keep some in our 401K (no penalty WD) and roll some too into investments that create an income stream from dividends.

I too would like to be in the 15% bracket!

 

[stepford]

I wasn't the OP on the 2nd attached post. So I'm afraid it's still 55 for me. No COLA for me either, but our monthly pension payouts do increase if we delay the start date. This aspect is more or less a wash (greater monthly payouts, but starting later), but the tax implications of keeping one's AGI super-low are the interesting part.

 

[Midpack]

Not unheard of. The Fortune 500 mega I once worked for changed goals every year to make sure they never paid anywhere near 100% bonus. Old timers told me 40% was the largest bonus they ever paid out, the most I ever received was about 33%.

Fortunately the middle corp I finished my career with never adjusted goals, so we all got truly exorbitant bonuses some years. Not all senior management is bad...

 

[bob boag]

Sounds like my pre-fire days at another aerospace megacorp. The top cheeses routinely got 10% or more bonuses and we peon engineers would typically get 2.5 - 3.0% "Employee Incentive Plan" payouts in a good year.

 

[ShortInSeattle]

Perhaps, "Boeing reduces bonuses to help create record earnings", would have been a better thread title. It makes sense.

They also laid off my mother's entire team this year. Right after the team finished training the contractors who replaced them, of course.

I hope Boeing enjoys their tax breaks, courtesy of the WA state legislature.

Tax breaks.
Lowering Bonuses
Laying off entire teams of Boomers to hire cheap contractors.

Needless to say, I'm not a fan. Yet half of my customer base is Boeing-dependent. They've got us all by the short hairs.

SIS

 

[DAYDREAMER]

Was mandatory to listen to Ray Conner spew his rhetoric regarding the reasoning for the lower bonus. To me, he's just a condesending ahole who is working to the best interest of his own pocket book. Boeing corporate has been playing hard ball reducing work pay/pension liability to the bottom line. Oh well, DW and I will gladly help them reduce 2 worker postions in 5 years. I'm praying for a layoff, since we are already in the 6 year window to be able to qualify for ER at 55.

 

[frayne]

I always marveled at the way bonus metrics were put together, presented and then changed year after year. I fully comprehend the concept of continuous improvement but also understand the complexities of hitting a moving target.

 

[Chuckanut]

The hand writing has been on the wall for years.

Young people should ensure that their financial security is totally in their hands or as close to that as they can reasonably make it. Do not trust business, politicians or others with you financial future. Personally, I would take whatever bonus I received and invest all of it for the future.

Regions such as the Seattle area must realize that Boeing sent a strong message when it moved its headquarters to Chicago. There is no loyalty to employees or regions. Build a bridge and get over it.

 

[Hermit]

So what's this bonus stuff? I worked for a major defense/aerospace contractor and never got a bonus. I did have the opportunity to go for 4 or 5 years without a pay raise prior to RE. The alternative was to manage people and I did not want to go there.

 

[supernova72]

I wasn't the OP on the 2nd attached post. So I'm afraid it's still 55 for me. No COLA for me either, but our monthly pension payouts do increase if we delay the start date. This aspect is more or less a wash (greater monthly payouts, but starting later), but the tax implications of keeping one's AGI super-low are the interesting part.

Oops. Missed that you were not the OP on the other post. I'm keeping my fingers crossed our retiree medical is still there from 55-62.

 

[supernova72]

Sounds like my pre-fire days at another aerospace megacorp. The top cheeses routinely got 10% or more bonuses and we peon engineers would typically get 2.5 - 3.0% "Employee Incentive Plan" payouts in a good year.

Got it. That sounds consistent!

 

[supernova72]

Was mandatory to listen to Ray Conner spew his rhetoric regarding the reasoning for the lower bonus. To me, he's just a condesending ahole who is working to the best interest of his own pocket book. Boeing corporate has been playing hard ball reducing work pay/pension liability to the bottom line. Oh well, DW and I will gladly help them reduce 2 worker postions in 5 years. I'm praying for a layoff, since we are already in the 6 year window to be able to qualify for ER at 55.

The area I have worked in has had two rounds of voluntary layoffs (VLO). The pkg is up to 26 weeks pay for year of service and then unemployment insurance to 6 months.

I would guess that about 50% of those surplus skill codes have taken it.

I've read the material and noticed the "if you are within 6 years of ER at 55 then certain benefits are enhanced" or something like that.

I can't find out the specifics however. Have you seen the details around being over 49 years old? Thanks!

 

[supernova72]

I may have answered my own question. Managers get much more than us this year.
Boeing managers to get annual bonuses of 12.5% to 22.5% | The Seattle Times

 

[haha]

Regions such as the Seattle area must realize that Boeing sent a strong message when it moved its headquarters to Chicago. There is no loyalty to employees or regions. Build a bridge and get over it.

Jet city no more. IMO, Boeing's Puget Sound Operations are in run-off. A long run-off, but a run-off none the less.

The kind of pay and benefits that rank and file Boeing workers get present an attractive target for long term cost reduction. Plus, management seems to have had it with Puget Sound labor troubles and out of date attitudes.

I visited my hip surgeon in Renton yesterday. I asked myself, why are these high volume, award winning surgeons in Renton? Boeing benefits and the 737!

Ha