Howard McKenzie
About Howard McKenzie
Howard E. McKenzie is Chief Engineer and Executive Vice President, Engineering, Test & Technology (ET&T) at Boeing, a role he has held since March 2023; he joined Boeing in 1987 and is 58 years old as of February 3, 2025 . During his tenure, Boeing’s pay-versus-performance disclosure shows 2024 company TSR value of 54.66 vs 80.49 in 2023, net income of $(11,817) million in 2024, and free cash flow of $(14,310) million in 2024, highlighting a challenging operating environment following the 737-9 door plug accident and production slowdowns . Boeing’s incentive programs emphasize free cash flow and operational performance, with PRSUs tied to cumulative free cash flow and completion of two safety milestones certified in December 2024, reinforcing the salience of safety-led execution for senior leaders like McKenzie .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Boeing Commercial Airplanes | Vice President and Chief Engineer | Aug 2021 – Mar 2023 | Led engineering oversight for BCA during safety and quality rebuilding, aligning design practices and SMS governance |
| Boeing Global Services | Vice President and Chief Engineer | Jun 2020 – Aug 2021 | Drove services engineering standards, supporting fleet reliability and safety |
| Boeing Test & Evaluation | Vice President | Jun 2019 – Jun 2020 | Oversaw test regimes across programs, strengthening verification and validation |
| 777 Program | Vice President and Chief Project Engineer | Oct 2017 – Jun 2019 | Program engineering leadership for widebody platform; design integration and risk controls |
| The Boeing Company | Chief Engineer and EVP, ET&T | Mar 2023 – present | Enterprise engineering accountability, SMS integration, safety governance and design practices across 58k engineers |
External Roles
No external public company directorships or outside board roles are disclosed for McKenzie in Boeing’s executive officer listings .
Fixed Compensation
Specific base salary and target bonus percentages for McKenzie are not disclosed in the 2025 Proxy’s NEO tables (he is not a named executive officer). Boeing notes it emphasizes performance-contingent, stock-heavy pay design, robust stock ownership requirements, and prohibits hedging/pledging for executive officers .
Performance Compensation
Boeing’s executive long-term incentives comprise RSUs and PRSUs with three-year service requirements and performance-based payout for PRSUs; 2024 PRSUs are tied to cumulative free cash flow for 2024–2026 and two product safety milestones (completion certified in December 2024) with payout reductions if milestones slip, cementing safety and cash generation as primary levers .
| Metric | Weighting | Target | Actual | Payout Impact | Vesting |
|---|---|---|---|---|---|
| Cumulative Free Cash Flow (2024–2026) | Not disclosed | Internal PRSU performance grid | 2024 FCF $(14,310)mm (company-wide) | PRSU payout scales 0–200% based on cumulative FCF; 2024 FCF headwind reduces trajectory vs targets | |
| 2024 Safety Milestone: SMS Culture Survey | Qualitative gate | Complete in 2024 | Completed (certified Dec 2024) | Avoided 25% reduction (or 0% if not completed) | PRSUs vest on 3rd anniversary of grant |
| 2024 Safety Milestone: Operational Control Limits (incl. 737) | Qualitative gate | Implement in 2024 | Completed (certified Dec 2024) | Avoided payout reduction | PRSUs vest on 3rd anniversary of grant |
Annual incentive program uses free cash flow and operational metrics; 2024 payouts were depressed across NEOs given safety-driven production slowdowns and work stoppages; McKenzie’s specific annual incentive data is not disclosed .
Equity Ownership & Alignment
Ownership, vesting schedules, and derivative awards reported on McKenzie’s Form 3s indicate meaningful unvested RSUs with upcoming vest events and a single underwater stock option, aligning him to long-term stock value while limiting near-term selling pressure.
| Category | Detail | Amount/Terms | As-of | Notes |
|---|---|---|---|---|
| RSUs outstanding (Form 3) | RSUs vesting schedule | 4,635.333 vest 2/18/2025; 6,833.636 vest 7/29/2025; 2,099.419 vest 2/17/2026 | 03/10/2023 | Prior tranches (12/14/2023 and 2/19/2024) already vested; RSUs settle 1:1 into common shares |
| Non-derivative holdings | Common stock (direct) | 17,593.01 (includes RSUs) | 05/03/2023 | Amended to include 412 directly owned shares omitted originally |
| Qualified plan | 401(k) Boeing stock fund units | 1,192.697 units | 03/10/2023 | Counted toward ownership guidelines per policy |
| Nonqualified plan | Executive Supplemental Savings Plan units | 2,384.718 units | 03/10/2023 | ESSP stock fund units; included in ownership guidelines |
| Stock option | Right to buy | 6,000 @ $220.54; vested 9/24/2024; expires 9/24/2031 | 03/10/2023 | Underwater vs $177.00 closing price on 12/31/2024 → $0 intrinsic value |
| Hedging/pledging | Policy | Hedging and pledging prohibited for executive officers | 03/07/2025 Proxy | Mitigates alignment risk; trades pre-cleared and within windows |
| Ownership guidelines | Requirement | Significant multiples of salary; hold newly vested stock until compliant | Program overview | Committee reviews ownership annually; counts RSUs, plan units; excludes options/PRSUs |
Vested vs unvested: Upcoming vest dates in 2025/2026 indicate forced tax-related selling around vesting could occur (standard for RSUs), but underwater options reduce option-exercise-driven selling pressure; hedging/pledging bans remove misalignment risk .
Employment Terms
- Appointment and tenure: Chief Engineer & EVP, ET&T since March 2023; joined Boeing in 1987; age 58 .
- Agreements: Boeing states no employment agreements or change-in-control arrangements for executive officers (except where required by non-U.S. law) and no accelerated vesting on change-in-control; clawback applies for misconduct/negligent conduct, including safety compromises .
- Severance/Layoff Plan: Executive Layoff Benefits Plan provides one year base salary plus pro-rated annual incentive (actual score) upon qualifying layoff due to job elimination; clawback/forfeiture applies for five years post-termination if competition, certain criminal acts, solicitation, disparagement, or misuse of proprietary info; no tax gross-ups; benefits continue per award terms .
- Perquisites: Limited perquisites (relocation, tax prep, financial management services, annual executive physical, concierge health, charitable match, outplacement) reviewed annually for reasonableness; no related tax gross-ups; aircraft usage tightly controlled and personal use limited .
- Trading policy: Executives prohibited from trading while in possession of MNPI; puts/calls, short sales, hedging, pledging banned; pre-clearance required; ownership counted using average daily closing price over one year to reduce volatility effects .
Performance & Track Record
Company pay-versus-performance data across the last five years illustrates the operating backdrop under which McKenzie is leading engineering and safety:
| Year | Company TSR ($100 start) | S&P 500 A&D Index TSR ($100 start) | Net Income ($mm) | Free Cash Flow ($mm) |
|---|---|---|---|---|
| 2020 | 66.10 | 83.94 | (11,873) | (19,713) |
| 2021 | 62.17 | 95.03 | (4,202) | (4,396) |
| 2022 | 58.82 | 111.54 | (4,935) | 2,000 |
| 2023 | 80.49 | 119.09 | (2,222) | 4,433 |
| 2024 | 54.66 | 136.24 | (11,817) | (14,310) |
Context: After the January 2024 737‑9 door plug accident, Boeing implemented a comprehensive Safety & Quality Plan, slowed production, elevated safety KPIs, and certified two safety milestones into the PRSU design, which materially affected financial outcomes and incentive payouts; the Aerospace Safety Committee doubled meetings, and safety governance intensified across engineering and manufacturing .
Compensation Structure Analysis
- Stock-heavy, performance-contingent mix; strong clawback for safety compromises; long-term incentives require three years of service; safety milestones embedded into PRSUs in 2024, increasing accountability and reducing discretion in payout design .
- No change-in-control accelerated vesting, no employment agreements, no pledging/hedging; robust ownership and holding requirements enhance alignment and reduce near-term liquidity-driven selling .
- Granting practices avoid MNPI timing and promote long-dated alignment; executives expected to accumulate and hold equity to meet guidelines .
Say‑on‑Pay & Shareholder Feedback
Boeing intensified outreach after the 737‑9 event, incorporated safety milestones into incentives, reduced NEO long-term award values by 22% from targets, and maintained a heavy weighting to stock-based pay; the Board and Compensation Committee engaged shareholders throughout 2024 on safety, quality, succession, and compensation program design .
Investment Implications
- Alignment: McKenzie’s equity is predominantly in RSUs with significant unvested tranches through 2026; underwater options at $220.54 strike vs $177 year-end price suggest low exercise-driven selling pressure, reinforcing longer-term alignment .
- Retention risk: Upcoming RSU vesting dates (Feb 2025, Jul 2025, Feb 2026) are retention anchors; Boeing’s Executive Layoff Benefits Plan includes five-year post-termination clawback/forfeiture provisions that deter competitive exits and misconduct .
- Trading signals: Expect tax-related selling near RSU vest dates; no pledging/hedging allowed; pre-clearance and windowed trading policy reduces opportunistic transactions .
- Performance linkage: Safety and cumulative free cash flow are central to PRSU payouts; sustained improvements in KPI framework and production health are key for value realization; adverse 2024 FCF and TSR level-set incentive trajectories but safety milestone completion avoided additional PRSU reductions .