Ted Colbert
President and CEO, Boeing Defense, Space & Security at BA
Executive
About Ted Colbert
Former Executive Vice President; President and CEO, Defense, Space & Security (DSS) at Boeing. He ceased serving as DSS President and CEO on September 20, 2024, remained in a transitional advisory capacity, and separated due to layoff on December 2, 2024 . 2024 incentive payout was $0 amid a year of significant operational and financial headwinds; in 2023 he earned a $600,000 annual incentive payout based on defense results and a 75% individual score . Company-level performance context is shown below.
Boeing performance context (annual)
| Metric | FY 2022 | FY 2023 | FY 2024 |
|---|---|---|---|
| Revenues (USD) | 66,608,000,000 | 77,794,000,000 | 66,517,000,000 |
| EBITDA (USD) | 1,162,000,000* | 3,154,000,000* | -8,183,000,000* |
*Values retrieved from S&P Global.
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Boeing Defense, Space & Security | President & CEO (elected officer) | – to Sep 20, 2024 | Led DSS; exited role amid broader leadership changes and operational resets . |
| The Boeing Company | Transitional advisory role | Sep 20–Dec 2, 2024 | Assisted transition prior to separation due to layoff . |
Fixed Compensation
Multi-year cash pay and reported equity values from the Summary Compensation Table.
| Year | Base Salary (USD) | Annual Incentive Paid (USD) | Stock Awards ($, grant-date fair value) |
|---|---|---|---|
| 2024 | 969,231 | 0 | 3,895,550 |
| 2023 | 1,000,000 | 600,000 | 7,023,000 |
| 2022 | 966,154 | 899,863 | 2,000,000 |
Notes:
- 2024 target base salary and bonus targets were unchanged at $1,000,000 each; 2024 AIP payout was $0 .
- 2023 AIP payout of $600,000 reflected defense business results and a 75% individual score .
Performance Compensation
Annual Incentive Plan (AIP) structure and outcomes
| Year | Metric framework | Weighting highlights | Target (USD) | Actual outcome |
|---|---|---|---|---|
| 2024 | Financial (free cash flow, operating earnings, revenue) and operational (safety/quality) metrics at business-unit level | For Commercial Airplanes, safety/quality = 60% of score; for Defense and Global Services, safety/quality = 25% of score | 1,000,000 | $0 payout |
| 2023 | Company/business unit score × individual performance score; safety metrics embedded in individual assessments | Not separately disclosed for Defense in proxy; individual score for Colbert = 75% | 1,000,000 | $600,000 paid |
Long-Term Incentives (grants and design)
- 2024 LTI target set at $5,000,000 (down from $6,000,000 in 2023) and then reduced by 22% at grant to reflect stock decline post-door plug accident; final 2024 grant-date value: $3,895,551 .
- 2024 grants included RSUs (9,086 units) and PRSUs (5,553 target units); grant-date fair values $1,753,007 and $2,142,543, respectively .
- 2024 PRSUs pay 0–200% based on 2024–2026 cumulative free cash flow; two 2024 product-safety milestones (culture survey and operational control limits) could reduce PRSU payout by 25% or to 0% if not achieved on schedule; the Compensation Committee certified completion in Dec 2024 .
| Grant year | Vehicle | Grant date | Quantity | Grant-date fair value (USD) | Key vesting/performance terms |
|---|---|---|---|---|---|
| 2024 | RSU | Mar 11, 2024 | 9,086 | 1,753,007 | Time-vest (3 yrs); pro-rata vesting upon certain separations per plan . |
| 2024 | PRSU (target) | Mar 11, 2024 | 5,553 | 2,142,543 | 3-year FCF; 2024 safety milestones; 0–200% payout; pro-rata rules apply . |
Vesting Schedules and Separation Effects (Insider Selling Pressure)
- Separation: layoff (not due to job elimination) on Dec 2, 2024; eligible for pro-rata vesting of outstanding awards per plan .
- Pro-rata eligibility at separation included: PPSO with respect to 22,746 shares (2022 grant), 18,004 RSUs (2022–2024 grants), and 12,185 PRSUs (2023–2024 grants, if earned) .
- Already-vested PPSOs remain exercisable for five years following separation .
Future RSU distribution schedule from 2024 vestings:
| Distribution date | RSUs scheduled |
|---|---|
| Feb 18, 2025 | 8,382 distributed |
| Feb 17, 2026 | 7,429 to be distributed |
| Mar 11, 2027 | 2,193 to be distributed |
Layoff-related incremental benefits (actuals shown in proxy):
| Category | Other Layoff (USD) |
|---|---|
| RSUs | 2,818,347 |
| PRSUs (threshold basis) | 953,642 |
| Tax preparation services | 8,300 |
| Financial management services | 3,350 |
| Outplacement/transition | 47,453 |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial ownership | 81,540 shares; each NEO, including Colbert, owned <1% of outstanding shares . |
| Stock units (deferred) | 9,622 stock units . |
| Options exercisable within 60 days | 47,410 shares underlying vested/near-vest options counted for beneficial ownership . |
| Option details | 23,449 (2021 grant) at $258.83; 22,746 (2022 grant) at $260.98; expiration reflected as 12/2/2029 in year-end table following separation . |
| In-the-money status (12/31/24) | Boeing closing price $177.00 vs option strikes $258.83 and $260.98 → out-of-the-money at year-end 2024, reducing near-term exercise pressure . |
| Ownership guidelines | Senior executives must attain/maintain significant Boeing equity; all NEOs serving as of 12/31/24 satisfied the requirement as of 9/30/24 . |
| Hedging/pledging | Prohibited for executive officers and directors . |
Employment Terms
- No employment agreements for executive officers (except where required by non-U.S. law) .
- Executive Layoff Benefits Plan (ELBP): provides cash severance only for qualifying layoff due to job elimination; not applicable to Colbert; ELBP includes 5-year forfeiture/clawback triggers (competition with significant business aspects, criminal acts, solicitation, disparagement, misuse of confidential information) .
- Change-in-control: no accelerated vesting of equity awards upon change in control .
- Clawback policy: Dodd-Frank compliant restatement recovery plus broader misconduct/safety-related recoupment even absent restatement; Board may disclose recoupments .
- Securities policy: executives prohibited from pledging/hedging; trades only in open windows with pre-clearance .
Performance, Track Record, and Execution Risk
- 2024: Company slowed production and re-focused on safety and quality after the January 2024 737-9 door plug accident; significant financial/operational pressures led to low enterprise incentive outcomes (e.g., enterprise score 19%, Global Services 56%, Commercial Airplanes 0%) and zero AIP payout for former DSS head in 2024 .
- 2023: DSS captured $29B in orders, +7% deliveries vs 2022, achieved key program milestones; individual performance score set at 75% with $600,000 AIP payout .
- LTI design increased safety alignment in 2024 via PRSU milestones and reduced LTI grant values by 22% to reflect stock performance following the accident .
Compensation Structure Analysis
- Mix shifts: 2024 LTI values reduced 22% for all senior execs; PRSUs incorporate 2024 product-safety milestones; AIP embeds safety/quality metrics more heavily, especially for Commercial Airplanes; continued multi-metric approach for financials .
- At-risk pay: Majority of NEO compensation is variable and performance-contingent; Company emphasizes long-term stock-based compensation and robust clawbacks .
- Governance guardrails: No employment agreements; no CIC acceleration; hedging/pledging prohibited; stringent ownership and holding requirements .
Risk Indicators & Red Flags
- 2024 incentive zero for former DSS head reflects alignment with underperformance; ELBP restrictions impose 5-year post-termination clawback/forfeiture if competitive or other prohibited conduct occurs .
- Options out-of-the-money as of year-end 2024 mitigate near-term exercise pressure; future scheduled RSU distributions may create supply windows (dates above) .
- Robust clawback and no CIC acceleration reduce pay-for-failure risk .
Equity and Option Detail (as of Dec 31, 2024)
| Instrument | Quantity/Status | Key Terms |
|---|---|---|
| 2021 PPSO | 23,449 unexercised | Exercise $258.83; expiration shown as 12/2/2029; OTM at $177 year-end price |
| 2022 PPSO | 22,746 unexercised | Exercise $260.98; expiration shown as 12/2/2029; OTM at $177 year-end price |
| 2024 RSU | 9,086 granted | Standard time vesting; subject to pro-rata per plan |
| 2024 PRSU (target) | 5,553 granted | 3-year FCF; 2024 safety milestones; 0–200% payout; pro-rata per plan |
| Deferred stock units | 9,622 | Nonqualified plan units (deferred) |
Perquisites and Deferred Compensation (Selected)
- 2023 perquisites totaled $109,488; included aircraft usage ($65,310), financial management services, concierge health, annual physical, and other permitted items .
- Executive Supplemental Savings Plan (Executive SSP) contributions and deferred RSUs for Colbert as of 2024 year-end: $255,324 (SSP) and $3,415,286 (Deferred RSUs) included within nonqualified plan disclosures .
Investment Implications
- Near-term selling pressure: Scheduled RSU distributions in 2026 (7,429) and 2027 (2,193) create identifiable potential liquidity events; a prior tranche (8,382) distributed in Feb 2025 .
- Option overhang: Two PPSO grants (2021/2022) were significantly out-of-the-money at 12/31/24 ($177 close vs $258.83/$260.98 strikes), limiting near-term exercise-driven supply; options remain exercisable for five years post-separation .
- Alignment: Strong clawback regime, no CIC acceleration, and pledging/hedging prohibitions support shareholder alignment, while 2024 program changes tie more pay to safety and long-term cash generation .
- Retention risk: Moot for Colbert post-separation; however, pro-rata vesting and scheduled distributions continue to link realized value to Boeing’s equity performance and plan terms .